Confused about health insurance? Let us spell it out in PLAIN English.
Below is a list of the top 10 health insurance terms you need to know to understand your coverage.
- Allowed Limit: The maximum amount your insurance company will pay for medical services.
- Benefit: The amount your insurance company will pay for covered services (See #6 for definition of “covered services.”)
- Claim: A request from your provider (i.e. doctor, hospital, pharmacy, etc.) to your insurance company for payment toward medical services.
- Coinsurance: Coinsurance is the portion of payment for a covered health service that you, the insured, are responsible for. Coinsurance is calculated based on a percentage and usually comes into play after your deductible is met.
- Copay: This is usually collected by the provider (i.e. doctor, hospital, etc.) at the time of service and is a set dollar amount, or fee, paid by the insured for a covered service.
- Covered Services: “Covered services” is just that… health care services covered, or paid for by your health plan. Depending on your plan, the amount of coverage for service(s) may vary.
- Deductible: A fixed dollar amount paid by the insured prior to the insurance company paying for covered services.
- Exclusion: Services not covered by your health insurance plan or provider are known as exclusions. The cost of these services is paid for 100% out-of-pocket by the insured.
- Network: “In-network” facilities, providers and suppliers are contracted with your insurance company to provide medical services. By staying “in-network” you are likely to save more money. While you may be permitted to use an “out-of-network” provider, your health insurance company may provide less coverage, or none at all.
- Premium: The term “premium” refers to the cost of your health insurance plan for a set period of time, typically one year (unless you are purchasing a temporary plan).
We know health insurance can be confusing, which is why we have defined the industry terms listed above to help you better understand your health insurance coverage.