how does health insurance work imagine you have a one hundred thousand dollar heart surgery which is the covered medical expenses under your health insurance plan and let's say this health insurance plan has a one thousand dollar annual deductible 20 percent coinsurance after deductible a two thousand dollar out-of-pocket limit and a two million dollar annual limit on your health insurance coverage in this video will explain how these different components of a health insurance policy work before we begin it's important to note that any health insurance policy purchased after September 23rd 2010 will not have a lifetime maximum limit on most to the plan benefits and any health insurance policy purchased after january first 2014 will not have an annual limit on most platinum the first thing we'll talk about in this video is a deductible what is a deductible typically a deductible is the amount of money you must pay each year before your health insurance plan starts to pay for covered medical expenses so with a one hundred thousand dollar heart surgery bill you are responsible for paying the first one thousand dollars after this one thousand dollar deductibles met the insurance company will pay percentage up the bill and you will pay the car insurance let's talk about coinsurance what is car insurance typically coinsurance is a cost-sharing requirements where you are responsible for paying a certain percentage and the insurance company will pay the remaining percentage up the covered medical expenses after your deductibles met for health insurance plan 20 percent coinsurance one-third deductibles met the insurance company will pay eighty percent of the covered expenses Mon you pay the remaining 20 percent until your out-of-pocket limit reached for the year what is in at a pocket limit typically the out-of-pocket limit is a maximum amount you will pay out of your own pocket for covered medical expenses in a given year for a plan with a two thousand dollar out-of-pocket limit you will pay a one thousand dollar deductible and one thousand dollar coinsurance while the insurance company covers the remaining ninety thousand dollars a heart surgery bill even if you're hospitalized again in the same here the insurance company will pay 100 percent be covered expenses until you reach your annual coverage limits what is an annual coverage limits some health insurance plans place dollar limits upon the claims and insurance company will pay over the course of a plan here so if you bought an insurance policy with an effective date of July 2011 your plan year was run from July 2011 until June 2012 if you have an annual coverage limits two million dollars and you have medical bills that cost more than two million dollars during your plan year you would be responsible for paying those bills at aviano pocket once your new plan your begins in July 2012 your deductible coinsurance out-of-pocket limit an annual coverage limits would all reset an insurance company would once again begin to pay your cover claims beginning September 23rd 2010 the Patient Protection and Affordable Care Act health care reform begins to phase out annual dollar limits starting on September 23rd 2012 annual limits on health insurance plans must be at least a two million dollars by 2014 no new health insurance plan will be permitted to have an annual dollar limits on most covered benefits some health insurance plans purchased before March 23rd 2010 have what is called grandfather status health insurance plans with grandfathered status are exempt from several changes required by health care reform including this phase out annual limit on health coverage here's one more concept you should be familiar with some health insurance plans offer co-payments what is the copayment typically a copayment for copay is a specific flat fee you pay for each medical service such as thirty dollars for an office visit after the thirty dollar copay the insurance company pays remainder the covered medical charges sometime subject to the deductible and coinsurance certain recommended preventive services immunizations and screens are covered with no cost-sharing copayment on health insurance plans purchased after March 23rd 2010 let's say you're not feeling well and went to see your doctor who charges two hundred dollars for the office visit if your insurance plan has an office visit copayment up thirty dollars the new only be responsible for the thirty dollars and the insurance company will cover the remaining one hundred and seventy dollars but if you purchased your health insurance policy after March 23rd 2010 and you're due for routine preventive care screening like a mammogram or a colonoscopy you may be able to receive that screen without making a copayment you can talk to your insurer or your license key health insurance agent if you need help determining whether or not you qualify for screening without a copay there are five important changes that occurred with individual and family health insurance policies on September 23rd 2010 those changes are added protection from rate increases insurance companies will need to publicly disclose any rate increases and provide justification before raising your monthly payments added protection from having insurance canceled an insurance company cannot cancel your policy except in cases of intentional misrepresentations or fraud coverage for preventive care certain recommended preventive services immunizations and screens will be covered with no cost-sharing requirements no lifetime maximums on health coverage no lifetime limits on the dollar value those health benefits deemed to be essential by the Department of Health and Human Services no pre-existing condition exclusions for children if you have children under the age of 19 with pre-existing medical conditions their application for health insurance cannot be defined due to pre-existing medical condition in some states a child may need to wait for the state open enrollment period before the application can be approved if you have questions that were not covered by this video please contact license key health insurance agent at one eight hundred 977 eighty six-year.