Understanding Your Health Insurance: What Patients Need to Know
About Cost Sharing
Navigating health insurance can feel overwhelming
Navigating health insurance can feel overwhelming, especially when trying to understand what you’ll actually pay for your care. At our behavioral health practice, we believe informed patients make empowered decisions. This guide will walk you through the basics of commercial insurance cost sharing—what it means, why it matters, and how to find out what your benefits are.
What Is Cost Sharing?
Cost sharing refers to the portion of healthcare expenses that you, the patient, are responsible for paying under your health insurance plan. It includes:
- Deductibles
- Copayments
- Coinsurance
- Out-of-pocket maximums
1. Deductible
Your deductible is the amount you must pay out of pocket for healthcare services before your insurance starts covering a portion of the costs.
- Example: If your deductible is $1,500, you’ll need to pay the first $1,500 of your medical expenses yourself each year before your insurance begins to pay.
- Deductibles typically reset annually, so this amount starts over at the beginning of each plan year.
2. Copay
A copay is a fixed fee you pay for a covered healthcare service, usually at the time of service.
- Example: You might pay a $25 copay for a primary care visit, $50 copay for a specialist, or $35 for a behavioral health visit (psychiatry or therapy appointment).
- As a behavioral health practice, it’s important to note that mental health services often have a separate copay amount—distinct from both the primary care and specialist copay tiers. Depending on your plan, your mental health visit may have a lower or higher copay than other types of care.
- Copays often do not count toward your deductible but usually count toward your out-of-pocket maximum.
- Your healthcare provider is contractually obligated to collect your copay if they are in-network.
3. Coinsurance
Coinsurance is the percentage of costs you share with your insurance company after you’ve met your deductible.
- Example: If your coinsurance is 20%, and a service costs $200, you would pay $40 while your insurance pays $160—after your deductible has been met.
- Coinsurance can add up quickly, especially for high-cost services, so it's important to know your percentage.
4. Out-of-Pocket Maximum
Your out-of-pocket maximum is the most you’ll have to pay in a plan year for covered services. Once you hit this limit, your insurance covers 100% of eligible costs.
- Example: If your out-of-pocket max is $7,000, once you’ve spent that much on deductibles, copays, and coinsurance, your insurance will cover the rest of the year’s services in full.
5. Contracted Rates and Why They Matter
A contracted rate is a discounted fee that an in-network provider agrees to accept as full payment for services, as negotiated with your insurance company. This rate is usually significantly lower than the provider’s standard (or "billed") rate.
Example: If a provider’s standard charge for a service is $200, but the contracted rate with your insurance company is $120, the provider is required to accept $120 as full payment—regardless of the higher standard rate.
This matters because:
Example: If a provider’s standard charge for a service is $200, but the contracted rate with your insurance company is $120, the provider is required to accept $120 as full payment—regardless of the higher standard rate.
This matters because:
- You only owe cost-sharing amounts (like copays, coinsurance, or deductible contributions) based on the contracted rate, not the full billed amount.
- The remainder beyond the contracted rate is not your responsibility and cannot be balance billed to you if the provider is in-network.
How to Find Out What Your Insurance Covers
Understanding your specific plan details is crucial—especially when it comes to mental health services, which often have different coverage terms. Here’s how to check your benefits:
- Check Your Insurance Card
Your card may list your copay amounts and deductible.
Look for the plan type (e.g., PPO, HMO, EPO), which affects provider access and referral requirements.
Many plans have separate copays for mental health services—distinct from primary care or general specialist visits. - Call Member Services
Use the phone number on the back of your insurance card.
Ask about:- Your annual deductible and out-of-pocket maximum
- Copays for mental health visits
- Coinsurance rates
- Whether your behavioral health provider is in-network using their National Provider Identifier (NPI) number.
- Visit Your Insurance Provider’s Website
Create or log into your member account.
Look for a section labeled “Benefits,” “Coverage Summary,” or “Explanation of Benefits (EOB).”
Many insurers provide downloadable PDFs with benefit details, including mental health coverage. - Use the NPI Lookup Tool
You can verify whether a provider is in-network or covered under your plan by using their National Provider Identifier (NPI). It's often handy to have this information when you call your insurance to check your benefits.
Visit the official NPI Registry at: https://npiregistry.cms.hhs.gov/
Enter your provider’s name or NPI number to confirm their credentials and specialty (e.g., Psychiatry, Clinical Social Work, Psychology).
Share this information with your insurance company if they ask for it during a benefits verification call. - Ask Your Employer’s HR Department (If Applicable)
They can provide a summary of benefits and help clarify plan options during open enrollment.
Final Tips
- Always confirm whether your provider is in-network, as out-of-network costs can be significantly higher.
- Ask for cost estimates ahead of time for non-emergency services.
- Review your Explanation of Benefits (EOB) after each appointment—it breaks down what was billed, what was paid, and what you owe.
- If there is a problem with your claim or insurance payment, contacting the insurance company yourself can often be the most efficient and effective way to determine your costs than relying on the provider’s office.
- Insurance companies are generally more responsive to the policyholder (the patient) than to the provider, AND when the provider calls the insurance company to check benefits, the insurance payor begins the call with a statement like, "Information provided is not a guarantee of benefits or coverage". If an issue arises, we are happy to supply you with the necessary information (such as service dates, procedure codes, modifier codes, or claim IDs) so you can call your insurance company directly. In many cases, patient-initiated inquiries lead to quicker resolutions and clearer answers.
If you're ever unsure about what your insurance will cover at our practice or want help understanding a bill, don’t hesitate to reach out.
We’re committed to transparency and patient advocacy.
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