Insurance Lingo
Know the Basics
*Disclaimer! There are a bazzillion insurance policies out there. Always contact your insurance company for the specifics. Below are basic definitions. Again, contact your insurance provider for clarity of these terms. Having somewhat of an understanding will benefit your communication to advocate for yourself & your loved one.
Insurance
A contract where you pay a premium in exchange for the insurance company to pay for some or all of your health care expenses
Premiums
The amount you pay, usually monthly, to maintain an insurance policy. Separate from the fees below.
Deductibles
The amount of money you pay before the insurance company starts paying. Usually resets at the beginning of the year.
Preventive services are usually covered 100% even before the deductible is met.
The next two are easily confused…
Coinsurance
What you pay per medical service after paying deductibles; usually a percentage %
Copayment
What you pay per medical service; usually a set amount $ vs a percentage
For the most part:
usually not applied towards deductible but applied towards your out of pocket maximum
continues after deductible is met
continues until out of pocket max is met
*This is for services like doctor office visits, ER/urgent care, specialists visits, prescriptions…
Out of pocket
Amount you pay for medical care/services
Maximum out of pocket
The max amount you pay for covered services within the year. After paying deductibles, copayments, coinsurance for in-network care, after you reach that max amount, then insurance usually covers 100%
FYI: usually out-of-network services and premiums do not count towards out of pocket maximum
In & Out of Network Providers
In: participates with your insurance plan
Out: does not participate with your plan
Know if the provider or service is covered under your plan beforehand
Check your policy to see coverage for both In & Out of network. There’s usually a big cost difference. This is one area where an HSA (health savings account) can come in handy.
Health Savings Account (HSA)
Pre-tax money that is deducted from your salary (into an account) to pay for healthcare costs. When you think about it, you come out cheaper using pre-tax money vs after tax money. There are certain criteria for this benefit. For example, you may only be eligible if your plan is a high deductible plan. That pre-taxed money can be used towards that deductible and some employers, annually give money towards that HSA account.
It’s worth the time and effort to know your stuff. And remember,
keep asking questions until it makes sense.