Health Insurance Terms
The Urban Institute in Washington D.C. has published some good articles lately and their web site is well worth visiting for current information on the Affordable Care Act. WWW.URBAN.ORG
Nine common terms we all deal with everyday are listed below and easy to understand.
- Premium – the amount you pay to the health insurance company to keep your policy in effect. Premiums are often assessed on an annual basis but may be paid monthly, quarterly or biannually.
- Deductibles – A deductible is the annual out-of-pocket cost you pay before your health insurance coverage kicks in. So if your deductible is $1000, your insurance company will not pay for a dime of your care (other than some preventive services mandated by the health reform law) until you pay $1000 out-of-pocket in medical costs. Premium payment do not count toward the deductible.
- Copay – Your portion of the medical bill after the deductible has been met.
- Coinsurance – It’s your portion of a medical bill. The only difference is that coinsurance is a percentage while a co-pay is a fixed amount. You might see coinsurance referred to in terms of 80/20 or 70/30. Those numbers mean you pay for 20 percent of 30 percent of the bill, respectively. Then, your insurance company will pick up the tab for the rest of the approved amount.
- Maximum out-of-pocket annual spending – You want this number to be as low as possible. It means that once you have paid a certain amount for the year, your insurance company will begin paying 100 percent for all covered services. Your co-pay and coinsurance requirements essentially disappear at that point.
- Provider network – The network includes all the providers who have an agreement in place with the health insurande3 company to accept patient from their plans.
- Covered services – Just like it sounds, covered services are those your health insurance plan will pay. Under the Affordable Care Act, there are 10 essential health benefits all plans must cover. These range from mental health services to prescriptions drug coverage.
- Excluded services – The items your health insurance plans specifically says it will not cover. Examples of commonly excluded services may include cosmetic surgery or weight loss regimens.
- Annual limits on services – Number of visits or dollar amounts on some services (ie. Chiropractic visits) Once the limit is reached, the insurance company will stop paying for that service.