||Coinsurance is the amount you’re required to provide for a medical service or prescription. It’s calculated as a percentage of the final amount. Some insurance companies may require you to meet your deductible before coinsurance takes effect.
||Copay is a set number you’re required to pay for a medical service or prescription. Like coinsurance, it can take effect either before or after you’ve met your deductible.
||When you fail to repay a medical bill, it can be sent to collections. Many hospitals and private providers have their own collections process before it’s sold to an official company. Once this happens, your bill will be noted on your credit report and may reduce your score.
||A deductible is the amount you must meet in order for your copay or coinsurance to start. Many insurance companies offer high deductible plans and low deductible plans, and certain services like yearly wellness checkups are covered before you meet your deductible.
|Explanation of benefits (EOB)
||This is a document sent by your insurance company that explains what services were and were not paid for. It is not a bill. Your bill will be sent by your provider and may be different from your EOB.
|Flexible Savings Arrangement (FSA)
||FSAs are offered by some employers. The money you contribute isn’t taxed, and you choose how much you’ll be contributing during the year. However, if you don’t use everything in the account, it may not rollover. This makes estimating for emergencies. difficult.
|Health Savings Account (HSA)
||An HSA is attached to you, not a job, but you must have a high-deductible plan in order to qualify. You won’t pay taxes on the money you draw for medical expenses.
||This is the maximum amount you’ll be required to spend by your insurance company and often includes your deductible. For instance, if your out of pocket maximum is $7,000 and your procedure costs $8,000, you would only be required to pay that $7,000.