This content was written by LessAccounting.com for small businesses and individuals in the hope of sharing information to help others make informed decisions about health insurance.

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Hypothetical Medical Bill Breakdowns

Just a disclaimer: This article includes assumptions and guestimating of medical costs. The purpose of these examples is to simplify how insurance companies work and how insurance terminology translates into common medical situations.

These examples don't factor in many things like: out-of-network doctors, having different deductibles and coverages for out-of-network expenses, or various other uncovered bills. These are very rudimentary examples.

My Family of Wimps

Allan's Family of Wimps

Situation: Your wife and two children each go to the doctor for 1 sick visit and 1 general check-up each year. Of course you didn't get sick because you're a bad ass. Each visit costs $400. Times this by 3 people and 2 visits per year, for a total of $2,400. But that's not what you actually pay. Your plan has a doctor visit copay of $75, so you pay just $75 upfront for each of these 6 visits.

Your health insurance plan has a...
deducticble of $5,000
coinsurance of 20%
copay of in-network doctor of $75 for "routine care visits."
out-of-pocket maximum of $12,000
$0
Amount of Medical Bills
$2,400
You have a $5,000 deductible but your insurance plan carries a $75 copay for routine care visits at in-network doctors. Instead of paying the full doctor bill you only pay $75 per visit per person.
You Pay
$ 450
You pay $75 copay X 6 Doctor Visits = $450
$2,400 in medical bills would cost you $450
This is in addition to your monthly premiums and medication.

My Family of Wimps (Version #2)

Allan's Family of Wimps

Situation: Same situation as the previous example except your insurance plan doesn't have a copay. You pay the full amount for these visits.

Your health insurance plan has a...
deducticble of $5,000
coinsurance of 20%
copay of in-network doctor of n/a
out-of-pocket maximum of $12,000
$0
Amount of Medical Bills
$2,400
You have a $5,000 deductible and your insurance plan does not list a copay. So you pay 100% of your medical bills until you hit your deductible.
You Pay
$ 2,400
You pay $400 per visit X 6 Doctor Visits = $2,400
$2,400 in medical bills would cost you $2,400
This is in addition to your monthly premiums and medication.

SuperHero (You) Breaks Leg

Situation: You didn't get sick all year but you broke your leg. You were probably running a marathon or saving a family from a burning house. Medical bills for this emergency totalled at $7,000.

Your health insurance plan has a...
deducticble of $5,000
coinsurance of 20%
out-of-pocket maximum of $12,000
$0
Amount of Medical Bills
$7,000
You pay 100% of the costs before the $5,000 deductible.
+
You Pay
$ 5,000
After your deductible, you pay 20% of your bills until you've paid $12,000, which is your out-of-pocket max. This is called "Co-Insurance".
You Pay
$ 400 (20% of the remaining $2000 after you pay your deductible)
You pay $5,000 + $400
$7,000 in medical bills would cost you $5,400

In addition to your monthly premiums, other deductibles (surgical, etc) and any applicable copays, this example accident would cost you $5,400.

"Firework" Accident

Situation: You didn't get sick all year but you were in a serious accident with a firework. (We won't ask.) Surprisingly your medical expenses reached $50,000 the few days you were in the hospital.

Your health insurance plan has a...
deducticble of $5,000
coinsurance of 20%
out-of-pocket maximum of $12,000
$0
Amount of Medical Bills
$50,000
You pay 100% of the costs before the $5,000 deductible.
+
You Pay
$ 5,000
After your deductible you pay 20% of your bills until you've paid $12,000 which is your out-of-pocket max. This is called "Co-Insurance".
+
You Pay
$ 7,000 (20% of the remaining $45,000, reduced by $2000 because it exceeds your out-of-pocket max)
Insurance pays 100% of your bills after you reach your out of pocket max.
You Pay
$ 0
You pay $5,000 + $7,000
$50,000 in medical bills would cost you $12,000

In addition to your monthly premiums, other deductibles (surgerical, etc) and any applicable copays, this example accident would cost you $12,000 because you reached your annual out-of-pocket maximum.

Continue reading about Types of Insurance Plans