We all know about health insurance as well as different health plans. Most of us along with our family get health coverage through a health insurance plan. While we apply for a health plan, we often hear some words or terms that are not clearly known to us. However, we must have clear idea about these health insurance terms, so that the health insurance companies can’t deprive us and we get the best and the highest value for our money. These terms are generally mentioned in the member contract form or the booklet named ‘Evidence of Coverage’.
- Medical benefits – medical benefits are the medical services for which the insurance company would pay either partially or in full.
- Premium – a premium is the amount the policyholder or his employer has to pay to the health insurance company for buying health coverage or medical benefits from it.
- Co-payment – this is the amount that the policyholder should pay from his pocket, prior to the health insurance company pays for any particular medical service. A co-payment should be paid every time a specific service is received.
- Co-insurance – this is the term used to describe the shared amount between the insured person and the insurer. This amount is normally described in percentage. For example, the insured person may have to pay 20% of the total covered costs, while the insurance company will bear 80% of the total costs.
- Capitation – this is the amount paid by the insurance company to the medical service providers every month for agreeing and providing services to all members of the insurance company.
- Coverage – this is what the insurance company will pay or won’t pay for.
- Coverage limit – some insurance plans only pay for medical services up to a particular dollar amount; they don’t pay anything beyond that amount. The insured person has to bear any amount that exceeds the coverage limit.
- Out-of-pocket maximum limit – to some extent, this is similar to the coverage limit, but in this instance, the insured individual’s payment obligation ends up after he reaches the out-of-pocket maximum limit. The insurance company pays the additional covered charges.
- Deductible - this is the amount should be paid by the person seeking for insurance coverage, before the insurance company starts paying its share. The amount or deductible is normally fixed for most of the health insurance plans and has to be paid by the insured person, every year.
- Pre-existing condition – pre-existing condition is the medical condition that existed or was treated prior to an individual applies for a particular health insurance plan or enroll in a new plan. However, the definition varies from company to company as well as plan to plan. Some insurance plans completely deny covering any pre-existing condition, while others implement a waiting period.
- Exclusions – these are the services not covered by the health insurance plan. The insured person has to pay for such non-covered medical services.
- In-network healthcare providers – in-network providers are the healthcare providers chosen by the health insurance company. The insurance company provides discounted co-payment, co-insurance along with other benefits, to the plan member to visit a healthcare provider within the network.