Explanations for Terms in Your Health Insurance Plans
Then you look at the option and gets confused with all the jargon. Certainly, a simple call to company’s representative will solve this problem. But it is quite bothersome. So what is the meaning of all that jargon, anyway?
Allowed Charges: The doctors, hospitals, or whoever provides health care services agree to receive discounted fees for full service. This only applies to the network of insurance. Outside of the network, there is no discount.
Allowed Maximum Benefit: The maximum benefit insurer pays for a year, though in some case can be more or less. If your care cost more, you need to pay it from your own pocket.
Benefits: Service covered by insurance in your health insurance plans, whether it is drugs, doctor, or other medical care. The covered services different from plan-to-plan.
Catastrophic Coverage: Coverage for especially costly service, like hospitalization. This requires actual payment up to a point before benefit can be granted. For example, if you care doesn’t cost more than $5,000, you won’t get the benefit. Have lower premium rates than usual.
Claim: Request that your doctor, hospital, or other institution submit to your insurer for the service they provide to you.
Coinsurance: A percentage of cost you need to cover for yourself. If your plan for a service is 10%, your insurer will pay the remainder 90%.
Copay: A flat amount of money that have to be paid when using a service. May be combined with co-insurance.
Cost Sharing: An arrangement between you and your provider how to pay the insured service. Coinsurance, copay, and deductible are a form of cost sharing. Premiums and service paid outside of provider network is not considered as cost sharing.
Deductible: The amount needed to be paid by yourself before the insurance kick in and cover it. If your deductible is $1000, you have to pay that much before your insurer covers your health care cost.
Denial: Refer to insurer’s ability to refuse any application for coverage, due to various reasons. Reason ranged from an unexpected medical condition or medical risk. Medical underwriting need to be done, which consisted of providing a medical history, going through physical examination, and submitting blood testing.
Exclusion: Items and services that are not covered in your health insurance plans. Specified in the contract.
Formulary: List of medications, prescriptions or generic, your insurance will pay. Includes the maximum price they’ll pay for the drug.
Health Saving Account: Allow setting aside money to cover health expenses if high deductible plans used. The funds roll over year from year if not all of them used.
High Deductible Plans: Type of plans that require significant amount money, up-front, before the benefits start, with the annual deductible starts around $2000. You will pay 100% cost of everything so long the amount not reached. Due to high deductible, have a lower premium. Great for healthy individuals with a healthy amount of pocket money that want lower premium while safeguarding from more serious health problems. Can be especially costly if said person not as healthy as they think. Can be combined with Health Saving Accounts.
Individual Health Insurance: Plans purchased by people outside of government and corporate insurance. Can be more expensive, pre-existing conditions are a known cause to be denied, can carry a higher deductible, depends on medical history and the result of medical underwriting.
Lifetime Maximum: The maximum amount insurance company will pay in your entire lifetime. It can be specific or general; for example, insurance might keep up to a million dollar for all benefit, or $100,000 for specified services. You won’t get covered after the maximum cap is reached.
Meets Proposed Out-of-Pocket Cap: Maximum amount that has to be paid by yourself in-network.
Out-of-Pockets Costs: The amount paid from your own pocket. In other words, the amount your insurance didn’t pay.
Out-of-Pockets Limit: The maximum amount you paid from your own pockets outside of network, with a catch. May or may not include deductible, coinsurance, copayments, and so on. Details differ between plans.
Plan Selectivity: Health Insurance does not have to cover everyone that applies. Some plans reject the majority of applicants, based on medical underwriting.
Premium: The amount paid to your provider each period of time for insurance service.
Preventive Care: Service that prevents or detects illness at an early stage. The plan brochure should list what kind of preventive care possible to get, so read or ask for it. Most are free.
Primary Care Visits: Primary care doctors perform routine medical exams and uncomplicated health services.
Specialist Visits: Some services require the care of specialist doctor, with deeper but narrower skill.
Urgent Care: Care for illness, injury, or condition serious enough to warrant immediate care but not severe enough to get in Emergency Care. Rarely covered in full, requires components.
And there you go! Hopefully this will help you select your health insurance plans.