Healthcare Insurance Terms

I don’t know about you, but I find some of the terminology used in the insurance world pretty confusing. Imagine how difficult it is for those with low literacy.

Some of the common terms that are used in healthcare insurance are:

1.       Premium: The amount you pay to the insurance company to keep your policy in effect. You may pay this amount monthly, quarterly or annually.

2.       Deductible: The out-of-pocket cost you pay before your insurance company begins to pay.

3.       Co-pay: Your portion of a bill after the deductible has been met. It is a fixed rate, such as a $20 per office visit or $5 per prescription.

4.       Coinsurance: Your cost of a bill after the deductible has been met expressed in a percentage of the bill rather than a fixed rate, such as 20%.

5.       Maximum out-of-pocket spending: For plans sold on the Affordable Care Act Marketplace, the maximum is $6350 for an individual and $12,700 for a family. When these limits have been met, the insurance company pays 100% of all bills for providers in network. There may still be co-pays for care from providers outside the plans approved network.

6.       Provider Network: A network includes all the providers who have an agreement with the health insurance company to accept patients with their plans. Higher co-pays may be charged for out of network providers, or your insurance company may refuse to pay the bill.

7.       Covered Services: There are ten essential health benefits required under the ACA (see blog from August 28). Insurance companies may offer other benefits as well.

8.       Excluded Services: A list of services that are NOT included by an insurance plan, such as cosmetic surgery.

9.       Annual Limits on Services: There may be a limit on the number of visits or a dollar amount. Insurance companies are no longer allowed to put lifetime limits on insurance coverage.