Health Insurance Basics and Medical Expense Coverage
Cost-sharing chain
Premium (paid regardless of claims) → deductible → coinsurance (a percentage, commonly 80/20) → copay (a flat dollar amount) → out-of-pocket maximum, which excludes premiums. Questions routinely swap coinsurance with copay; coinsurance is always a percentage.
Plan types and markets
Indemnity/major medical, HMO, PPO, POS, and EPO; group versus individual. ACA marketplace plans use metal tiers keyed to actuarial value: bronze 60%, silver 70%, gold 80%, platinum 90%. High-deductible health plans paired with an HSA must meet statutory minimum deductibles and maximum out-of-pocket limits that are indexed annually - do not memorize a dollar figure, memorize the concept.
Public and employer coverage
Medicare Part A (hospital), Part B (medical), Part C (Advantage), Part D (drugs); Medicaid and Minnesota Medical Assistance for low income; MinnesotaCare. COBRA continuation lasts 18 months for termination or reduced hours, longer for disability or death. HIPAA provides portability and privacy protections.
Coordination of benefits
When two plans cover the same person, one is primary and pays first; the secondary plan pays the remainder. For dependent children of two covered parents, the birthday rule usually applies.
Rule of thumb
Benefits never exceed 100% of the covered expense. Coordination of benefits decides who pays first, not whether the bill is paid twice.
Traps
Medicare does not pay for custodial long-term care. A deductible is not the same as the out-of-pocket maximum. Premiums are never counted toward the out-of-pocket maximum.