There is nothing quite like the shrill headache you get trying to understand some of the jargon that comes with shopping for a health care plan. Lucky for you, we have just the antidote: – a no-frills glossary of everything you don’t understand about the innocent-looking words that send you reaching for your bottle of aspirin.
Use this list to unpack all the reading you’re doing while on the market for a health care plan. You’ll soon get the hang of which amounts will save you money in the long run and which you might not need. As you will see, most health insurance conditions and terms can broadly be divided into which payments you need to make and which your insurance covers. It will save you time, cut down the stress and give you the information you need to pick a plan that’s perfect for you.
Deductibles
This is the money you must pay before your insurance plan covers your health care costs. This amount is always specified or capped at a limit. High deductibles may take you through several doctor’s visits or medical tests to reach, but you could also have an accident that would make you reach the cap in one visit.
Deductibles are paid directly to the hospital, doctor or medical provider. After you reach the specified amount, your insurance provider starts picking up the medical expenses you incur. If you have some amount left on your deductible at the end of your policy period, it carries over to the new policy period.
Premiums
The amount that you pay your insurance provider every month. The price of your premium depends on how many people you add to your insurance plan. Some employers will cover a certain portion of the premium and then deduct the rest from your paycheck. If your employer offers you insurance but does not cover any portion of the costs of your premium, then the entire amount is deducted from your paycheck.
Co-Pay
The portion of a medical insurance claim that you are responsible for paying. In most cases, a doctor’s office will request the co-payment at the time of your appointment. Co-payments are usually fixed amounts.
Co-Insurance
The percent amount at which your insurance will stop covering your medical expenses, once your deductible is met. For instance, your insurance company may set this percentage at 80 percent in which case they will pay 80 percent of your medical expenses and you are responsible for covering the rest.
Out Of Pocket Maximum
The highest amount you will pay during a policy period including your deductibles, coinsurance and co-payments. Premiums are not counted as out-of-pocket maximums. As soon as you reach the out-of-pocket maximum, the insurance company starts covering 100 percent of your medical costs. This is why most out-of-pocket maximums are set very high. Your deductibles, co-payments or coinsurance are all factored into your out-of-pocket maximum.