Benefit plans typically do not pay 100% of eligible expenses. You may be required to pay a portion of the eligible expenses under your benefit plan due to deductibles, co-insurance and plan maximums. Understanding how these work can help you plan for health care costs and avoid unexpected out-of-pocket expenses.

What is a deductible?

A deductible is a set dollar amount you must pay before the insurer begins making benefit payments. This is often referred to as “satisfying the deductible.” Simply put, you need to cover this amount before receiving reimbursements for benefits. For example, just as you might pay the first $500 in damages before your car insurance covers the rest, your health plan may require you to pay the first portion of the payment for your health insurance expenses.

Deductibles can apply to coverage for the entire plan, across certain benefits, or a combination of both. Be sure to consult your Member Profile for specific information related to your plan.

For example:

Natalie, a 63-year-old retiree, and her husband Frank have extended health and dental benefits through Pacific Blue Cross. Their plan includes a $50 per person annual deductible.

In January, Natalie visits a massage therapist who directly bills Pacific Blue Cross for $180. Since this is her first claim of the year, her $50 deductible is deducted from the claim amount, leaving $130 eligible for reimbursement.

After applying all other policy rules, Pacific Blue Cross covers 80% of the remaining amount ($104), and Natalie pays the remaining $76, which includes her deductible and coinsurance portion.

What is co-insurance?

Co-insurance is the percentage of the cost for health and dental services or products that you are required to pay after meeting your deductible. Unlike a deductible, which is a set dollar amount you must reach first, co-insurance applies to every eligible expense.

A typical co-insurance percentage is 20%, meaning your plan covers 80% of eligible expenses, while you cover the remaining 20%. However, co-insurance percentages may differ for certain benefits, such as major dental work or orthodontics.

For example:

Later the same day, Natalie fills a prescription and submits her $90 claim through the Pacific Blue Cross Member Profile. Since she already met her $50 annual deductible, the full $90 is evaluated for reimbursement. Under her plan’s 80% co-insurance rule, Pacific Blue Cross reimburses her $72 via direct deposit, leaving her responsible for the remaining $18.

Each benefit plan is unique, and not all have the same co-insurance percentage. It’s best to consult your Member Profile for specific information related to your plan.

What are plan maximums?

Benefit plans may place dollar limits, or maximums, on certain benefits and services within a specific time period. These maximums may apply to the total claims paid within a plan year or even over an individual’s lifetime. These limits help manage costs and ensure sustainable coverage for all plan members.

Maximums vary across every benefit plan. Check your Member Profile to review your benefit plan usage and eligibility, including details on any applicable maximums.

* This example is for illustration purposes only. Actual figures may vary depending on your plan details.