The world of healthcare can be confusing to navigate. Before the prevalence of health maintenance organizations and various other health and wellness insurance groups, obtaining medical assistance involved going to the doctor and then paying the bill. But today people must navigate copayments, coinsurance, deductibles, and savings plans, which can make it difficult to understand what’s going on with your insurance company.
Healthcare is standardized in some areas of the world and publicly financed with little to no out-of-pocket costs for participating citizens. Elsewhere, access to health insurance is provided through employers or government assistance programs or individually purchased.
Understanding some health insurance-related jargon is a great way to better educate oneself about the industry.
Benefit period: The benefit period refers to the duration of time services are covered under your plan. It is usually a calendar year from the point of start to end. It may begin each year on an anniversary date when you first received coverage.
Coinsurance: This is a percentage of the cost of services rendered in specific areas outlined by the health plan that you are responsible for after a deductible is met. For example, a plan may cover 85 percent of costs, with patients responsible for the remaining 15.
Copayment (copay): A copayment refers to the flat rate you pay to a provider at the time you receive services. Some plans do not have copays.
Deductible: The amount you pay for health services before the insurance company pays. You must meet a set limit, which varies by plan and provider, before insurance will kick in and cover the remaining costs during the benefit period. Many plans have a $2,000 per person deductible. This deductible renews with each calendar year.
HMO: A health maintenance organization offers services only with specific HMO providers. Referrals from a primary care doctor often are needed to see specialists.
HSA: A health savings account enables you to set aside pre-tax income up to a certain limit for certain medical expenses.
Long-term care insurance: A specific healthcare plan that can be used for in-home nursing care or to pay for the medical services and room and board for assisted living/nursing home facilities.
Network provider: This is a healthcare provider who is part of a plan’s network. Many insurance companies negotiate set rates with providers to keep costs low. They will only pay out a greater percentage to network providers.
Non-network provider: A healthcare provider who is not part of a plan’s network. Costs may be higher if you visit a non-network provider or if you are not covered at all.
PPO: A preferred provider organization is a type of insurance plan that offers more extensive coverage for in-network services, but offer additional coverage for out-of-network services.