When searching for a health insurance plan or after one has already signed up, the plan terms, or descriptions of provisions and coverage’s can be hard to understand. When one is reviewing the terms they often confusingly say, “What does that mean?”
Help is here! Below is a list of common health insurance coverage terms to help everyone understand more about what their health insurance plan has to offer.
Deductible
The deductible refers to the amount of money that the insured would need to pay before any benefits from the health insurance policy can be used. This is usually a yearly amount so when the policy starts again, usually after a year, the deductible would be in effect again. Some services, like doctor visits, may be available without meeting the deductible first. Usually there are separate individual deductible amounts and total family deductible amounts.
Co-insurance
This is usually a percentage amount that is the insured's responsibility. A common co-insurance split is 80/20. This means that the insurance company will pay 80% of the procedure and the insured is required to pay the other 20%.
Co-payments
The co-payment is a fixed amount that the insured is required to pay at the time of service. It is usually required for basic doctor visits and when purchasing prescription medications.
Out-of-Pocket
This is the cost one would pay out of their own pocket. An out of pocket expense can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, that is referring to how much the insured would have to pay for the whole year out of their pocket, excluding premiums.
Lifetime Maximum
This is the most amount of money the health insurance policy will pay for the entire life. Pay attention to individual lifetime maximums and family lifetime maximums as they can be different.
Exclusions
The exclusions are the things that the insurance policy will not cover.
Pre-existing Conditions
This is something someone had before obtaining the insurance policy. Some plans will cover pre-existing conditions while others may completely exclude them and, in addition, some health insurance plans will cover pre-existing conditions after a certain time period.
Waiting Period
This is the time one would have to wait until certain health insurance coverages are available.
Coordination of Benefits
If the insured has available two or more sources that would cover payment for certain conditions, such being under a spouse's insurance plan along with their own, the insurance company would not pay double benefits. In this case the health insurance company would coordinate benefits to make sure each plan pays a portion of the service.
Grace Period
This is the amount of time one has to pay their health insurance premium after the original due date and before insurance coverage would be cancelled.
