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How Health Insurance Works

Knowing how health insurance works will help you choose the plan that's right for you.


Health insurance helps cover your medical expenses if you get sick or hurt and have to visit a doctor's office or hospital. Some health plans also cover health care services like annual physicals or immunizations. As an example, let's say you have a health plan with a:

How Your Plan Works

Example 1:

  • You visit a doctor in the network for a routine physical examination covered under your plan. The doctor charges $150 for the services you received.
  • Because Wellmark has negotiated certain rates with providers in the network, a network provider will cost less under your health plan. For example, the visit may cost $110 instead of $150.
  • You pay a $25 copay and your health plan pays the remaining portion.


Example 2:

  • You develop a hernia and need to have surgery.
  • You have surgery at a network hospital, which charges $14,500 for the surgery.
  • Because Wellmark has negotiated certain rates with providers in the network, you receive network savings - for example, $11,500 instead of $14,500.
  • You're responsible for the first $2,500 (your deductible).
  • After you reach your deductible, you're then responsible for your 20% coinsurance. You pay the next $1,500, up to your annual out-of-pocket maximum of $4,000, while your health plan pays $6,000.
  • Your health plan pays the remaining $1,500. Because you've reached your out-of-pocket maximum, you won't pay anything more for covered expenses the rest of the year.
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