Can you describe what a health insurance deductible is? How about a premium or copay?
Understanding health insurance terminology is essential when shopping for a new plan or renewing your current plan. Here are just a few terms that are important for you to master before you make any health care decisions.
- Deductible – This is the amount you pay out-of-pocket for covered health care services before your health insurance provider begins to pay. It may take a few doctor’s visits before you meet your deductible.
- Premium – The amount that you pay in order to have health insurance. This is usually paid monthly, quarterly or yearly by you and/or your employer.
- Copayment – A fixed amount you pay for a covered health care service each time you receive it. The amount can vary depending on the type of service. You often may hear this referred to as a co-pay.
- Coinsurance – Sometimes the cost for your medical services is shared between you and the health insurance company. Coinsurance is calculated as a percentage of the total cost you must pay above and beyond your copay. For example, you may be responsible for 20 percent of the cost, while the insurer covers the remaining 80 percent.
- Provider network – A network of providers who are contracted to provide health care services to plan members. An in-network visit is often less expensive as the health insurance company and the provider have negotiated lower rates.
- Formulary – A list of prescription drugs covered by your insurance plan.
- Out-of-pocket limit – The maximum amount you pay out-of-pocket for covered services in a year.
Still have questions?
While these terms will get you started, there’s still a lot more to understand. These resources can help you find the answers to your questions and ultimately choose the best health insurance plan to meet your needs.
- Questions about your benefits? An insurance agent can be a helpful resource when evaluating your health insurance needs since they are not associated with one specific insurance carrier.
Find answers about your plan from your health insurance provider. They’ll be able to answer any questions you have about your current coverage.
- Want to test your knowledge? Kaiser Family Foundation created a quiz to test your health insurance literacy. Take the quiz here.
- There is a glossary of health care terms available through HealthCare.gov with every term you could think of.
- Visit Priority Health’s member page for videos reviewing how your health plan works hard for you.
- You can contact your state insurance department; they will have resources for you that are specific to your state.
Now that you have the basics down, you can move forward with confidence, and choose the best plan for you and your family.