How a Typical Healthcare Plan Works

Walk-in Dermatology > How Healthcare Plans Work

Here’s an explanation of the coverage and benefits under many common types of healthcare plans when you receive care from an in-network provider. Your plan may differ slightly, but this should give you a good idea of how most healthcare plans work. It is important that you contact your insurance company for information regarding your specific healthcare plan.

When a new plan year begins…

You are responsible for 100% of the cost of your covered health services until you reach the plan deductible.

With most visits to a healthcare provider…

You are usually required to pay a fixed fee (also called a copay) whenever you see a healthcare provider or fill a prescription. A typical copay for a routine visit to an in-network provider’s office ranges from $15 to $25; for a specialist, the copay averages $30 to $75. Copays for prescriptions depend on the medication and whether it’s a brand-name or a generic.

When you have met your deductible…

When you reach your deductible, a typical healthcare plan begins covering a percentage of the cost of covered healthcare services. This is known as co-insurance. You typically pay 20% of the cost and your healthcare plan typically pays 80%. This varies based on your specific healthcare plan.

Once you reach the out-of-pocket threshold…

The out-of-pocket limit is the most you pay for covered healthcare services during the plan year. This includes copays and co-insurance. Once this amount is reached, your healthcare plan typically pays 100% of the cost of covered services.


If your healthcare ID card states “referral required” then your primary care provider must send an electronic referral before you make an appointment with a specialist. Without this referral, you could end up responsible for the entire cost of the visit.

Prior authorization

If your healthcare plan requires prior authorization before certain services or prescriptions are covered, you or your in-network care provider may need to get approval in advance. Call the number on your ID card to contact a representative with your healthcare plan to determine if prior authorization is required for the services or medications you need. It is your responsibility to know if you require prior authorization for a particular service.