How to Calculate Statement Coverage
Statement coverage is sent to a health insurance policy holder to detail the coverage amounts that will be paid on behalf of the policy owner. The insurance company co-insures the coverage of the policy owner so that the policy owner is obligated to pay a percentage and the insurance company is obligated to pay a percentage as well. The only exception would be in the case of an insurance company paying one hundred percent of all coverage, which is rare. These percentages are pre-determined amounts based on the signed insurance policy and plan.
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Instructions
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Locate the co-insurance percentage in the insurance policy. Usually the percentages are either 80% paid by the insurance company with 20% being paid by the insurer or 90% being paid by the insurance company with10% being paid by the insurer. Whatever your percentage, it means that you are responsible to pay the exact percentage of the medical bill that is outlined in your insurance policy or plan.
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Familiarize yourself with your insurance policy by reading it completely. Specifically, locate the deductible amount in your insurance policy. The deductible amount is the total amount that you must pay before the insurance company is obligated to pay any amount. For example, if you have a $500 annual deductible, then this means that you pay a total of $500 for any procedure, and only after paying this amount does the co-insurance percentage being paid by the insurance company activate.
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Deduct the policy owners deductible amount, if it applies. If the policy owner still has a $500 deductible to be paid, then the total amount to be paid will have to include payment of this deductible first. For example, if the total health care costs are $1,200, use the following calculation: total healthcare costs-deductible=total co-insurance amount, or $1,200-$500=$700.
Use this $700 to then determine the amounts that should be paid by the insured and the insurance company. For example, at a 20% co-insurance amount to be paid by the insured, take 20% of $700 or $140, which is the total amount to be paid by the insured in this example.
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Use the following calculation to calculate the statement coverage if there is no deductible or if the deductible has already been met: total health care costs x policy owner percentage=total policy owner amount. For example, if you had a procedure done and the total health care cost is $1,200 and the policy owner payment amount is 20%, calculate $1,200 x 20%=$240.
To calculate the total that must be paid by the insurance company use the following calculation: total health care costs x total insurance percentage=total insurance co. amount. Using the above example, the calculation would be $1,200 x 80%=$960.
These two calculations should always add up to be one hundred percent of the total health care costs. If you have a policy that deducts the co-pay amount, then deduct that amount from the policy owner amount.
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Tips & Warnings
If you feel that your coverage amount is too expensive, request an alternative plan from your insurance company. Your policy can be changed on an annual basis.
If the statement coverage that you calculate is different from the statement coverage sent by the insurance company, call them right away to have them correct the amounts.
