Health insurance can be a confusing topic for beginners, especially when it comes to understanding the different terminologies used in the industry. With the endless jargon used in health insurance policies, it’s easy for someone without a background in the field to get lost in translation. This article will help break down some of the most commonly used terminologies in health insurance to assist those who are just starting to navigate the world of health insurance.
A premium is the amount of money an individual pays each month or year to maintain their health insurance policy. The amount of the premium may vary depending on several factors, including the coverage level selected, the individual’s age, their lifestyle, and their medical history. Premiums can be paid by the individual, their employer, or both.
A deductible is a fixed amount of money the individual must pay out of their pocket before the insurance company starts paying for covered services. The deductible can vary from one health insurance policy to another, and it can vary depending on the services the policy covers.
A copayment, or copay, is a fixed amount of money the individual must pay each time they receive healthcare services. Copays can vary depending on the healthcare services received, and they may be different for in-network and out-of-network providers.
Coinsurance is the amount the individual must pay after their deductible has been met. It is usually a percentage of the total cost of healthcare services, and the insurance company covers the remaining balance.
The out-of-pocket maximum is the highest amount an individual will pay for covered services in a given year. Once the individual reaches this maximum, the insurance company covers all additional expenses for covered services for the remainder of the year.
An in-network provider is a healthcare professional or medical facility that has a contractual agreement with the insurance company to provide healthcare services at a lower cost. Choosing an in-network provider can help save the individual money on copays, coinsurance, and deductibles.
An out-of-network provider is a healthcare professional or medical facility that does not have a contractual agreement with the insurance company. If an individual receives healthcare services from an out-of-network provider, they may have to pay higher copays, coinsurance, and deductibles.
A pre-existing condition is any medical condition that an individual has before they enroll in their health insurance plan. Depending on the policy, pre-existing conditions may not be covered for the first few months after enrollment.
In conclusion, understanding health insurance terminology is essential for navigating the world of health insurance. Knowing what premiums, deductibles, copays, coinsurance, out-of-pocket maximums, in-network and out-of-network providers, and pre-existing conditions are is crucial for selecting the right health plan and avoiding unexpected healthcare expenses.