Whether you are choosing a health plan or trying to budget appropriately – being familiar with the terminology can help you make informed decisions. Here are the top five health insurance terms to commit to memory:
- Premium – The premium is the payment you provide to a health insurer, in exchange for health coverage. This fee is typically paid on a monthly basis.
Deductible – The deductible is the amount of out-of-pocket expenses you must pay before your health insurance begins to pay toward medical expenses. It may take a few doctor’s visits or medical services before the deductible is met.- Co-payment – Co-payment is a standard fee you must pay out-of-pocket for a doctor visit or service. The co-payment usually does not apply to the deductible and therefore, must be paid every time a service is used.
- Coinsurance – Coinsurance is the shared cost between you and the health plan for medical services. It is a percentage of the total cost you must pay above and beyond the co-pay. For example, you might be responsible for 20 percent of cost, while the health insurance company pays 80 percent.
- In-Network Provider – The health insurance company provides a list of health care providers that fall within its coverage network. If you use these providers, you receive a discounted rate and sometimes additional benefits.
In addition to knowing these health insurance terms, when choosing a health plan you also should consider:
If the plan has a low premium, it will likely have a high deductible.
- If the plan has a low premium, it will likely have a high deductible. It is important to find the right mix to meet your needs.
- Some of the more inexpensive plans often come with a limited network of providers – make sure your preferred doctor and facility are covered.
- Check out the plan’s policy on referrals and specialist visits, especially if existing medical conditions are present.
