Healthcare Terms You Should Know

1 out of 10 Americans know four basic health insurance terms health plan premium, health plan deductible, out-of-pocket maximum, and co-insurance. 

However, understanding healthcare terminology is actually essential to getting the best care possible. It also helps the insured to be mindful of how much money they will have to pay and when they have to pay it. 

Premium

A premium is the amount of money the insurance company is going to charge you for the insurance policy they are purchasing. The insurance premium is the cost of the insurance.

Insurance premiums typically have a base amount and by using your personal information, location, age, and other company determined information, discounts may apply to the base premium, in order to get preferred rates or more competitive or cheaper insurance premiums.
 

Deductible

A deductible is not the same as a co-pay. A deductible is a fixed amount you must pay each year before your health insurance benefits begin to cover the costs. For example, If the insurance policy indicates a "$300 deductible," the insurance company pays as agreed after you pay the first $300.

Once the deductible is paid, you would usually pay only a co-payment or coinsurance for covered services. The insurance company pays the rest. It‚s also important to note:

• For certain insurance plans, some have different deductibles, such as prescription drugs.
• Family plans also have both an individual deductible applicable to each person, and a family deductible applies to all family members.
• A lot of times, the plans with lower monthly premiums generally have higher deductibles. Plans with higher monthly premiums have generally lower deductibles.
   

Out of Pocket Maximum

An out-of-pocket maximum is the most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.

The out-of-pocket limit doesn't include:

• Your monthly premiums
• Anything you spend on services your plan doesn't cover
• Out-of-network care and services
• Costs above the allowed amount for a service that a provider may charge
• The out-of-pocket limit for Marketplace plans varies, but can‚t go over a set amount each year.
   

Co-Insurance

The percentage of costs of a covered health care service you pay (20%, for example) after your deductible has been met. 

For example, if you have a 20% coinsurance, you pay 20% of each medical bill, and your health insurance will cover 80%.

What's co-insurance?

Co-pay

The set or fixed-dollar amount you are required to pay each time a particular medical service is used. This amount is paid by the insured. Co-pay is short for co-payment, in which it is a fixed amount the insured pays for covered medical services. The remaining balance is covered by the person's insurance company.

A typical copay for a routine visit to a doctor's office, in-network, ranges from $15 to $25; for a specialist, $30-$50; for urgent care, $75-100; and for treatment in an emergency room, $200-$300.

Out of Network Care

Out of network care is when the doctor or facility providing care does not have a contract with the insured health insurance company. In contrast, in-network care means that the provider has negotiated a contracted rate with the health insurance company.

Many health plans will not reimburse you for out-of-network charges. Some other health plans do offer coverage for out-of-network providers, but in this case, there would be a greater patient responsibility compared to using an in-network provider. 
 

Out of network vs in network

Claim

This is a request made by you for payment from the insurance company of medical expenses that are covered under the insurance policy. 

There are typically two ways to file a claim:

1. One way and usually the easiest way is when the medical services provider can submit the claim directly to the insurance company through the network electronically.
2. The second way is by essentially sending in the paperwork on your own. If the health service provider is not in the network for the health insurance company and can not file the claim on the insured‚s behalf, then the insured will have to file a health insurance claim form to request payment for the medical services obtained.
   
    

Essential Health Benefits

A set of 10 categories of services health insurance plans must cover under the Affordable Care Act. These services include doctors‚ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more. Note that some plans cover more services.

All plans offered in the Marketplace cover these 10 essential health benefits:

1. Ambulatory patient services (outpatient care you get without being admitted to a hospital)
2. Emergency services
3. Hospitalization (like surgery and overnight stays)
4. Pregnancy, maternity, and newborn care (both before and after birth)
5. Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
6. Prescription drugs
7. Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care (but adult dental and vision coverage aren‚t essential health benefits)