Out-of-Pocket Expenses – What Are They?

Posted on Friday, January 31st, 2014 at 12:02 pm

Having medical insurance in the US is crucial to protect you from high expenses associated with healthcare in the US. Insurance pays a portion of your medical expenses for you. Contrary to popular belief, having medical insurance in the US does not mean that you won’t have to pay anything towards your medical expenses. The expenses that you will be expected to pay are called “out-of-pocket expenses.” Every medical insurance plan is different, but generally, you can use the following equation to figure out what you will be paying out of pocket.

Premium + Deductible + Co-insurance + Copayments = Out-of-Pocket Expenses

Each part of this equation is explained in full detail in our Insurance Explained article Understanding Out of Pocket Expenses, but here is a brief definition of each:

Premium – Your premium is the cost of buying your insurance policy.

Deductible – Your deductible is the amount that you are required to pay towards your medical expenses before the insurance company begins to pay towards your medical expenses.

Co-insurance – A co-insurance agreement stipulates the percentage of eligible medical expenses that the insurance company will pay versus the percentage that you will be required to pay.

Copayments – Your copay is an amount of money that you must pay to the doctor each time you seek medical treatment.

Luckily, most policies also include an out-of-pocket maximum limit. Once you’ve paid up to the out-of-pocket maximum limit, the insurance company begins paying 100% of your eligible medical expenses for the remainder of the year. This can protect you in case of a prolonged hospitalization or illness.

All of these things are important to know and understand when shopping for a good international student health insurance. Our Student Secure plans have been designed to offer a low premium, low deductibles, co-insurance 100% paid by the insurance (Select level, in-network), and no copays! Get a free quote and more information here.

Posted by Victoria Troupe

Victoria is currently a marketing specialist with Envisage International. She has had the opportunity to live and study around the world, including Germany, Poland, and China. A native of Wyoming, Victoria received her Bachelor's degree from the University of Wyoming, her MBA from the University of North Florida and her Master's of Intercultural Communication from Fachhochschule Köln, in Cologne, Germany.