Health insurance can be confusing, but there are some definitions you should know. By knowing some of the terminology, it will help you in selecting the best coverage for you and your family.
The amount you or your employer pays to maintain your health insurance policy is the premium. Your employer may pay some, or all of the premium for your policy. There are various factors such as the type of coverage, age, gender and other items that determine what the monthly premium is. Most of the time you can get a better premium if you under a group policy. If you not covered by a group policy with your employer, then you may be able to get better premiums if you are able to get group coverage instead of an individual policy.
The deductible is the amount of health services you must pay for before the insurance coverage begins. Some policies provide limited services such as routine wellness exams and physician visits even if you have not met your deductible. Usually, the higher your deductible, the lower your premiums will be.
A pre-existing condition is a condition that a person experienced before the start date of the insurance policy. It may be more difficult to get accepted for health insurance if you have a pre-existing condition. If you are accepted you will likely pay higher premiums than other applicants. Even though you are paying higher premiums, it is worth having the insurance if you have ongoing health issues and expenses.
When you have met your deductible or if you don’t have a deductible, the insurance company may require you to pay a percentage of your health care costs, this is called co-insurance. Some policies cover 100 percent of costs after the deductible. Policies that have zero percent coinsurance, usually the insurance pays 70 percent, 80 percent or 90 percent and you pay the remainder. Policies may also include a maximum out-of-pocket that limits the amount you pay for co-insurance. After you reach the maximum, your policy will cover 100 percent of covered costs up to your annual or lifetime maximum.
For some services such as doctor’s office visits and prescriptions, your insurance will require a co-payment. Instead of applying your co-insurance percentage, you pay a set amount when you obtain a certain service or medication. You pay the service provider at the time of the service and the provide then bill the insurance company for the remainder.
Health insurance terminology can be confusing, but it will be helpful in selecting policies and make health decisions if you are familiar with some of the terminology.