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Understanding cost sharing for HAP members in Michigan

Manage your healthcare finances with HAP's cost sharing

HAP is committed to helping you understand and manage the costs associated with your healthcare. Cost sharing is a fundamental aspect of health plans, where both you and your health plan share the expenses for covered services, medications and medical supplies. Here’s a guide to help you navigate cost sharing and make informed decisions about your healthcare finances.

Key highlights of cost sharing:

  • Copays:

    • Definition: A copay is a set amount you pay each time you receive certain covered healthcare services, medications or medical supplies.
    • Example: Ben pays a $35 copay for a doctor visit and a $20 copay for generic drugs.

  • Deductibles:

    • Definition: Deductibles are the amount you owe for certain covered healthcare services before your health plan begins to pay for them.
    • Example: Ben’s plan has a $2,000 per-person deductible, which he must meet before his health plan starts covering costs.

  • Coinsurance:

    • Definition: Coinsurance is the percentage of allowed amounts for certain covered services that you pay after your deductible has been met.
    • Example: After meeting his deductible, Ben pays 20% coinsurance for his shoulder surgery.

  • Out-of-pocket limit:

    • Definition: The out-of-pocket limit is the most you’ll pay for covered services during a benefit period, usually a calendar year, before your plan begins to pay 100% of the allowed amount.
    • Example: Ben’s plan has a $4,500 per-person out-of-pocket limit. Once he reaches this limit, his health plan covers all remaining costs for the year.

How cost sharing works:

  1. Copays:

    • You pay a copay each time you receive certain covered services. Copays do not count toward your deductible but do count toward your out-of-pocket limit.

  2. Deductibles:

    • You must pay the full deductible amount before your health plan starts covering costs. Deductibles can be per-person or family amounts.

  3. Coinsurance:

    • After meeting your deductible, you pay a percentage of the allowed amounts for covered services. Your health plan covers the remaining percentage.

  4. Out-of-pocket limit:

    • Once you reach your out-of-pocket limit, your health plan pays 100% of the allowed amount for covered services for the rest of the benefit period.

Example scenario:

  • Ben’s health plan:

    • Copays: $35 doctor visit, $20 generic drug, $35 physical therapy
    • Deductible: $2,000 per-person, $4,000 family
    • Coinsurance: 20%
    • Out-of-pocket limit: $4,500 per-person, $9,000 family

  • Ben’s costs:

    • Doctor visit: $35 copay
    • Generic drug: $20 copay
    • MRI: $1,000 deductible
    • Shoulder surgery: $1,000 deductible + $2,200 coinsurance
    • Physical therapy: $35 copay per visit

Important considerations:

  • Cost sharing reset: Your cost-sharing responsibilities reset at the beginning of each benefit period, usually January 1.
  • Family deductibles: A family can meet its full deductible without each person meeting their own amount. Once the family collectively meets the deductible, all members are considered to have met it.