The world of insurance can be confusing and sometimes scary. Many people even claim they do not have a good grasp on the benefits of their insurance plan.

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For families with special needs children, knowing the details of their insurance plan is important as it can help them determine what services are covered and accessible to their child. Luckily, all 50 U.S. states have taken action to ensure that ABA is covered under both private and state insurance plans. This coverage does not mean that insurance is not still tricky; it is.

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If you need help wrapping your head around the terms used by your insurance specialist or are trying to determine what you should expect to pay for ABA, we are here to help!

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This blog will define commonly used insurance terminology and provide examples of how these terms come into play in your plan. We hope to help you better understand what your insurance is actually paying for and, in turn, how to prepare for out-of-pocket costs. ‍

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Insurance Terminology

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• Deductible: The amount you pay for covered services before your health plan starts to pay.

For example, if your deductible is $1,000, you must pay the first $1,000 of covered services before your insurance begins to contribute. Be sure to check your plan details, as the deductible may not apply to all services, and some plans do not have a deductible. 

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Your BPI Benefit Letter notes if your deductible does not apply to ABA services.

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• Coinsurance: The percentage of the costs of a covered health care service you pay after you have paid your deductible.

Let's say your coinsurance is 20% after you meet your deductible. For a $100 charge, you would pay $20, or 20% of $100, and your insurance plan pays the remaining $80 or 80%.

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• Copay: A fixed dollar amount you pay for a covered health service.

Most plans have either a copay or a coinsurance. Insurance plans that cover ABA with a daily copay charge the patient a fixed amount, i.e., $30 per day of therapy, as their patient responsibility portion. 

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• Out-of-Pocket Maximum: The cap, or most, you have to pay for covered services within a plan year.

Once you have reached your out-of-pocket maximum, your insurance plan will pay 100% of the remaining service costs for the remainder of the plan year. Your OOP Max can include the money you paid towards deductibles, copays, and coinsurance. 

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Preparing for Out-of-Pocket Costs

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ABA therapy differs from other medical appointments and treatments in terms of intensity. You might think it a bit crazy to spend 40 hours per week in your primary care physician's office, but ABA is not like a doctor's appointment or procedure.

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In reality, children and adults receiving ABA services are typically scheduled for 10-40 hours of therapy per week. These hours aim to increase helpful, meaningful behavior and skills to promote greater independence in their daily lives.

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Due to the frequency of therapy, most families receiving ABA therapy can expect to pay their total out-of-pocket amount within the insurance benefit year. 

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Let's consider two scenarios to help you better understand how to calculate the out-of-pocket costs that may be necessary under your plan.

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Copay Scenario

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Imagine your plan benefits include a $25 copay per visit with a $5,000 out-of-pocket maximum. 

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With a schedule of five days of therapy per week, you can estimate your out-of-pocket costs to be around $125 per week or about $500 per month. A member with this insurance plan will have reached their $5,000 out-of-pocket amount after 200 days of therapy. In this case, ABA therapy for the remainder of the insurance benefit year would be 100% covered by the insurance provider.

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While your benefit plan may not be as straightforward as the example, and your recommended clinical hours may differ, this is one simple way to estimate your out-of-pocket costs for the year with a copay-based plan. It also gives you an idea of when you will reach your out-of-pocket maximum.

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Coinsurance Scenario

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Plans with coinsurance can be more challenging to anticipate when the out-of-pocket limit will be reached because the percentage the member pays will depend on the frequency and type of services received daily. 

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To help determine the average monthly cost for plans with coinsurance, divide your out-of-pocket maximum by the 12 months of the year. 

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For example, a plan with a $3,000 out-of-pocket maximum could average a monthly payment of around $250 over 12 months. This example assumes the member would have paid their entire $3,000 OOP Max within 12 months from the start date of services. 

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Again, this calculation does not include the percentage you would pay for services each day, which will vary by coinsurance plan. Nor does the calculation provide insight into when your plan's deductible will be met. 

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In some cases, you may reach your out-of-pocket maximum sooner with a coinsurance plan than with a copay plan. Once you know your deductible and coinsurance percentage, it will be easier to calculate the date you can expect to meet your out-of-pocket maximum. 

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At BPI, my goal is to help bridge the gap between your insurance provider and you so that you can make informed decisions about your care and coverage.

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If you have any questions regarding your specific plan coverage and benefits or are interested in learning about financial assistance opportunities that can help to cover out-of-pocket expenses, I would be happy to speak with you!

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Feel free to reach out to me at 888-308-3728 or via email at billing@bpiaba.com.