Health insurance is its own little universe, with a unique language and ecosystem that laypeople are expected to understand when they begin their search for the right health insurance policy for them.
Understanding the health insurance landscape can be difficult, but CareCoverage is here to help demystify it and make health insurance more accessible for everyone.
1. Premium
This is the amount you pay regularly (usually monthly) to maintain your health insurance coverage. It's akin to a subscription fee for your insurance plan.
2. Deductible
The deductible is the amount you must pay out of pocket each year before your health insurance starts paying its share for covered services. It varies by plan and higher deductibles usually mean lower monthly premiums.
3. Co-payment (Co-pay)
A co-payment is a fixed amount you pay for a covered healthcare service, usually when you receive the service. The amount can vary by the type of service and your insurance plan.
4. Coinsurance
This is your share of the costs of a covered healthcare service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay coinsurance plus any deductibles you owe.
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5. Out-of-Pocket Maximum/Limit
This is the most you have to pay for covered services in a plan year. After you spend this amount on deductibles, co-payments, and coinsurance, your health plan pays 100% of the costs of covered benefits.
6. Network
A network refers to the facilities, providers, and suppliers your health insurer has contracted with to provide health care services. Staying within the network usually means lower costs.
7. Formulary
Also known as a drug list, this is the list of prescription drugs covered by your insurance plan. Drugs not listed may not be covered or could be more expensive.
8. Explanation of Benefits (EOB)
An EOB is a statement from your health insurance company detailing what costs it will cover for medical care or products you've received. It’s not a bill, but it shows how your benefits were applied to that medical event.
9. Prior Authorization
This is a requirement that your physician must obtain approval from your health insurance plan before a specific service is delivered to ensure the service is covered by your plan. Without prior authorization, you could be responsible for the full cost.
10. Claim
A claim is a request for payment that you or your healthcare provider submits to your insurer after you receive services. It’s how your doctor gets paid by the insurance company for the services provided.
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11. Annual Limit
This term refers to the maximum amount an insurance company will pay for covered healthcare services within a specific year. Many plans do not have annual limits due to regulations, but some still apply limits to certain services.
12. Dependent Coverage
Dependent coverage extends your health insurance benefits to your spouse, children, or other eligible dependents. The specific eligibility requirements can vary from one plan to another.
13. Essential Health Benefits
Under the Affordable Care Act, health insurance plans must cover a set of healthcare services called essential health benefits. These include services like emergency services, maternity and newborn care, and prescription drugs.
14. Network Types
These include HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), EPO (Exclusive Provider Organization), and POS (Point of Service) plans, each defining how you can access medical services and how you get referrals for
specialists.
15. Waiting Period
This is the time that must pass before your health insurance coverage becomes effective, especially in cases of pre-existing conditions. This term is also used for new employees waiting to become eligible for group health coverage.
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We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on getting the right health insurance for you!
If you're tangled up in the confusing world of health insurance, CareCoverage is the solution you've been looking for. We specialize in making health insurance simple and understandable, helping you find the plan that fits your needs perfectly. With a dedicated team that knows the ins and outs of everything in the health insurance space, CareCoverage has guided countless individuals and families to the coverage they need without the hassle.
Book a FREE consultation with our experts and let us help find your ideal and affordable health insurance plan today!