Health insurance can be a confusing field to navigate even for those who work in the industry. With so many terms and acronyms, it can be difficult to understand what your policy covers and what you are paying for. In this article, we have compiled a glossary of terms commonly used in the health insurance industry.
Premium: The amount you pay each month to keep your health insurance policy active.
Deductible: The amount you pay out-of-pocket before your insurance coverage kicks in. For example, if you have a $1,000 deductible and you have a medical bill of $2,000, you will be responsible for paying the first $1,000, and then your insurance will pay the remaining $1,000.
Co-pay: A set amount you pay for medical services, like a doctor’s visit or a prescription, at the time of service. The amount of your co-pay may vary depending on the type of service and your insurance plan.
Co-insurance: A percentage of the cost of a medical service that you are responsible for paying after your deductible has been met. For example, if you have a 20% co-insurance and your medical bill is $1,000, you would be responsible for paying $200 and your insurance would pay the remaining $800.
Out-of-pocket maximum: The most you’ll pay for covered medical expenses each year. This amount includes your deductible, co-pays, and co-insurance. Once you reach your out-of-pocket maximum, your insurance will pay 100% of your covered expenses.
Pre-existing condition: A health condition that you had before your health insurance coverage began. Prior to the Affordable Care Act, pre-existing conditions were often excluded from health insurance coverage. However, now health insurance companies cannot deny coverage or charge more because of pre-existing conditions.
Network: The group of doctors, hospitals, and other healthcare providers that have agreed to provide services to members of a particular health insurance plan.
Open enrollment: A period of time each year when you can enroll in a health insurance plan or make changes to your existing plan. Open enrollment typically takes place from November through December, although some states have their own open enrollment periods.
Short-term insurance: A type of health insurance designed to provide temporary coverage for people who are between jobs or waiting for their employer’s coverage to begin. Short-term insurance policies are typically less expensive than traditional health insurance policies but offer more limited coverage.
These are just a few of the many terms used in the health insurance industry. By understanding the language, you can make more informed decisions about your health care coverage and make the most of your insurance benefits.