Allen, have you started recently with health insurance? No offense intended whatsoever, just trying to get a bearing on where your at.
The percentages are based on what is termed the "actuarial equivalent", this is NOT the same as saying that 70% of each bill is payed by the insurance company (that would be a straight 70% co-insurance). What it is saying is that of ALL the claims made in a given year for a specific block of business, 70% of the TOTAL of claims will be paid by the insurer (company).
This works out since most claims are small (under $5,000) so for those small claims, the insured (consumer) picks up most of the cost, but the insurance will kick in once the deductible and max out of pockets have been met.
Lets say I have 10 claims in my block of business and the plan has a $5,000 ded with 100% co-insurance after that so the $5,000 is the max out of pocket as
well.
Of these claims, I have
5 for $1000 each - total of $5000 - insureds pay all claims
4 for $5000 each - total of $20,000 - insureds pay all claims
1 for $75,000 - insured pays $5,000 and insurance company pays the other $70,000
In this case we have $100,000 in total claims, the insureds are picking up $30,000 and the insurance company is picking up $70,000, in this case, the plans benefits have worked out to be silver level or 70% actuarial equivalent because the company is picking up 70% of the TOTAL claims.
