Health Insurance Fundamentals

Health Insurance Fundamentals

Increase your knowledge and understanding of common health insurance terms:

(Only 4% of Americans can correctly define the health insurance terms in this glossary!)

  • Premium. The amount that you pay for your health insurance, usually monthly.
  • Deductible. The amount you pay before the insurance starts paying. Some policies pay a portion before reaching your deductible, like office visits and prescriptions.
  • Copay.  In some policies, the shared cost for an office visit, prescriptions, urgent care or emergency services.
  • Coinsurance. The amount the policyholder pays AFTER the deductible is reached, and is capped after a threshold (stop-loss) is reached, then the plan pays at 100%.
  • Out-of-pocket maximum. This is the total amount you pay for medical services in a calendar year and does not include premiums.

Various types of health insurance plans:

  • Major Medical. The most common, comprehensive and expensive health insurance plans available, include employer group plans, ACA Obamacare plans, and most short term medical plans. Once you reach your out-of-pocket maximum, the policy pays 100% of ALL medical expenses.
  • Hospital-Surgical. These plans were very popular before Obamacare and are seeing a comeback in the marketplace because they are relatively cost effective. They cover hospital, room, surgical and miscellaneous inpatient and outpatient expenses. Medical expenses are either paid using a schedule of payments or by paying reasonable and customary charges.
  • Accident. An insurance plan that pays for the most common claim, usually on a first dollar basis, and you can choose how much coverage you want. It is popular to combine this product with high deductible Major Medical plans.
  • Critical Illness. A plan that covers the most common illnesses, including cancer, strokes and heart attacks.
  • Hospital Indemnity. Plans that pay a certain amount for each day you are in the hospital.

Comments are closed