Health Insurance Glossary
Common terms you might see in your health insurance policy that aren't actually common knowledge
For most people, health insurance plans are extremely confusing, and the resources available to us online do not make them any easier.
The world of insurance is built with unique terminology that are unfamiliar to most people until they begin to choose a health care plan. Therefore even when we have health insurance coverage, we are easily confused when it comes down to the payment.
A little bit different that its name “premium” itself is not a premium service. Your premium on your health insurance is your monthly bill to have health insurance. This is your basic payment in order to have your health insurance.
An insurance deductible is what your health insurance provider may require you to pay towards your healthcare before their payments start to kick in. For example, if you have a deductible of $1,500, and you have not paid any of that towards your medical bills yet, when you have a medical bill that amounts to $1,500 or less, you will have to pay the total amount. However, the next time you have a bill your deductible will already be met.
A copayment, or co-pay, is the amount that you have to pay for a health service after your deductible has been met (if you have one). This is usually a fixed fee, meaning that is will always be the same price for the same or similar service. For example, if your co-pay to see your gynecologist is $30, it will always be $30. The only difference is if you have a different medical service performed, there may be a different value of co-pay required. For example, you may have blood taken at your gynecologist and sent to a lab, and your co-pay to the lab is $10.
Many people get a co-pay and co-insurance confused, and that’s because they are relatively similar. In the same way that a co-pay kicks in after your deductible is met, coinsurance is only applicable after your deductible is fully paid. Coinsurance is a percentage of the bill that you are required to pay after your deductible. For example, if you trip to the gynecologist is $130 and your coinsurance is 20%, you will have to pay 20% of $130, or $26, and your insurance will cover 80%, or $104.
Once your deductible is met, if you have one, you will have something called a maximum out of pocket that you will ever be required to pay in a year through your co-pay or your coinsurance. For example, if you have a maximum out of pocket of $6,000 and have had a year of many medical appointments, your co-pay or coinsurance may be adding up to quite a lot of money over the course of the year. If you have already spent $5,980 in copayments during the same year and you have a medical appointment that is $130. If your usual copay is $30, you will only need to spend $20 against your copay to reach $6,000. From there you will not owe any further copayments for the rest of the year as you have hit your maximum out of pocket.
A pre-existing condition is an illness that you already have before your health insurance coverage begins. Common examples of a pre-existing illness include diabetes, asthma, or an autoimmune disorder. Even if you have a pre-existing condition, your health insurance plan is obligated to cover it and also are not allowed to charge you more because of it.
Any service related to your health that is carried out without you having any known health issue or symptom is considered a preventative service. Really common examples of this might be cervical screenings or mammograms.
In-network hospitals and clinics are those that accept your health insurance plan. Out-of-network hospitals and clinics are those that do not accept your health insurance, and therefore will charge you the full price of the service. It is very important to check with the facility before you arrive for the appointment. These rules may not apply in emergency situations.
A specialist is a type of medical professional that focuses on a specific type of medicine or a specific group of patients. Examples of a specialist may be a dermatologist (skin doctor), a gynecologist (female reproductive doctor), or an oncologist (cancer doctor) who might work in a even more specific area.
This type of surgery means that you are having a surgery where you are not kept in the hospital overnight. These type or surgeries are those that are typically less invasive and don’t require the medical professionals to watch you overnight.
This is the term used to describe the products and services that are covered under your health insurance plan. An example of a benefit might be your insurance covering the cost of your prescription drug.
When you take a medication that doesn’t have a brand name, this is called a generic drug. This type of medication has the exact same make up of the brand name medication, including the same amount you’re meant to take, the same effectiveness, and the same safety, however it does not have the known brand name to be on the label. An example of this is Advil. You can buy medication that is the generic version of Advil, ibuprofen, and although it will have the same effect on your body, it will not be called ibuprofen.