If this is your first legitimate solo venture into health insurance, you might be a little shellshocked. It’s like healthcare has its own language that’s completely indecipherable to the outsider, and how can you choose a policy if you don’t know what exactly it’s talking about? How will you know how much you’re paying, and for what? It all starts with understanding exactly what you’re being offered. While insurance companies do have their own vocabulary, you just have to learn the basics, and you shouldn’t have any problem. That’s why we’ve put together this list of 12 important health insurance terms that you need to understand before you can make an educated decision on healthcare policies:
- Benefit: Essentially, what you’re getting from your health insurance plan. What the plan covers in terms of treatments, medical services, and supplies are all benefits. While these can vary depending on the person and plan, it’s generally summed up by the dollar amount or percentage your carrier is responsible for.
- Coinsurance: After you’ve met your deductible, this is the percentage you’re responsible for paying for any covered service. Say your insurance company is responsible for paying 80% of a service, and you go have lab work done that costs $100. While your insurance carrier would pay $80, you would be responsible for the remaining 20%, which would make your coinsurance payment $20.
- Copayment: Another way that you share your medical costs with your insurance provider, this is a standard flat fee. For certain medical expenses, you’ll pay a fee, regardless of if you’ve met your deductible or not. The most common example would be a copay for a doctor visit. You might pay a flat fee of $30 dollars each time you go, and your insurance carrier will cover the rest.
- Deductible: This is the amount you must pay for medical expenses before your insurance plan kicks in. Generally these are set up as a once-per-year requirement, which means you only have to meet that deductible amount once a year, although there are plans that are set up to function once per condition. In the latter case, you would have to meet the deductible each time you went to the doctor for a different condition before your health insurance would kick in. It’s important to note that the higher your deductible, the lower your premium tends to be.
- Dependent: Anyone, child or spouse, that is also covered under the insured’s health insurance policy. According to the Affordable Care Act, children may be covered under their parent’s policies until the age of 26.
- Effective Date: While this may seem self-explanatory, it’s really important to know your effective date, as that is the day that your health insurance policy officially begins. Any health costs incurred before this date won’t count to your deductible, and won’t be covered by your insurance policy.
- Guaranteed Issue: Under the Affordable Care Act, your application for a health insurance policy must be accepted, regardless of age, health history, or gender. According to this act, all major health insurance plans are guaranteed issue, so long as they’re not considered grandfathered plans. This means that everyone is guaranteed some level of health insurance.
- Network: This refers to the group of health care providers who accept your insurance policy or carrier. These are usually clinics, hospitals, and health care providers that agree to offer their services at discounted prices in exchange for increased referrals from your insurance carrier. In general, you will find more affordable prices from those providers in your network.
- Out-of-Pocket Limits: Once you have reached this number, called an out-of-pocket limit or maximum, your insurance provider will pay 100% of the allowed amount for the rest of your covered healthcare expenses for the year. While these maximums vary from plan to plan, they generally include costs incurred from copayments, deductibles, and coinsurance. They never include expenses from your premium, services your health policy doesn’t cover, or balanced-billed charges. This is another good number to look at when you’re choosing policies.
- Policy Length: Essentially the length of time that your policy is in effect. It’s important to know the exact length of your policy, because once it ends, if you don’t renew you will no longer be provided with benefits.
- Premium: This is the amount you pay to your insurance company for your health insurance plan outside of copayment and deductibles. Generally, the lower your premium, the higher your deductible will be. Premiums can be paid monthly, quarterly, or annually, depending on the options available to you, and your personal preference.
- Preventative Services: If you have an Affordable Care Act compliant policy, preventative services like mammogram screenings, blood pressure screenings, and vaccines are 100% covered. This means you won’t have to pay anything out of pocket for these procedures or services.
Hopefully this list has helped you make sense of some of the more confusing aspects of health insurance. If you have more questions about any of these terms, or which health insurance policy might be right for you, just give one of the insurance experts at Doyle & Ogden a call at 616-949-9000 or get your free quote online. We’ll help you figure out what you’re looking for from your health insurance policy, and we’ll find you better coverage for the best price!
