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Knowledge of Insurance Terminology Is Key

INSURANCE TERMINOLOGY YOU NEED TO KNOW:

Premium: this is the amount you pay to the insurance company each month to keep your coverage.

Co-payment: widely termed “co-pay,” this is the specific amount of money you are required to pay to the provider when you receive services. Many plans require a co-pay for office visits and prescription medications.

Deductible: this is the annual amount you will be obligated to pay out-of-pocket before your insurance company will begin to pay for any of your medical expenses. You typically need to meet your deductible for specialty care, hospital and emergency services. Once you’ve paid this amount, the insurance company will pay the balance at a set rate, often 80/20 (you are responsible for 20% of the charges above the deductible amount and the insurance company will pay the other 80%).

Co-insurance: you are obliged to pay this for medical services after you have satisfied any deductible or co-payments required by your insurance plan. Again, if you consider a plan that has 80/20 co-insurance, the insurance will pay 80%, you will pay the other 20%.

Maximum Out-of-Pocket Costs: this is in place to set a limit on your annual financial liability; once you have paid this maximum (the total of your deductibles, co-payments, and co-insurance costs combined), the insurance company will pay the full charges of your medical care rendered that year. Keep in mind, your monthly premium does not contribute to this amount.

Find out more about these terms and more at: ehealthinsurance.com