Health Care Lingo – Common Insurance Terms

The process of choosing the right health plan might seem a bit complicated and unnerving, especially when it comes to first-time insurance buyers or cost-consciousness. There is a lot to take in and consider, but first and foremost, it’s important to determine your necessities. Afterwards, understanding the key concepts that make up the insurance plan is the next step. Acquiring the correct information about the health insurance lingo should be the basis of your insurance policy shopping. This article will guide you through some of the most common terms and help you decode them properly.

  • Premium: This is one of those most common terms you’ll come across. To put it as simply as possible, a premium is the amount of money you or your employer have to pay on a monthly, quarterly or yearly basis. If you are enrolled in a certain medical plan, these are the costs that allow you to utilize the covered health care services.
  • Deductible: A deductible is the amount that can be owed during a coverage period, which is usually one year that includes covered health care services before the intended plan begins to pay. Another term you might bump into is an overall deductible, which applies to all or some covered services and items. A healthcare plan that includes an overall deductible may have some separate deductibles that are applicable to specific services or groups of services. 
  • Covered expenses: Covered services or expenses represent a fraction of a medical, vision or dental expenses that your health insurance plan agrees to pay for or reimburse when or after you use one of the named services.
  • Coinsurance: Coinsurance stands for your share of costs of a covered health care service, which is calculated in percentages of the allowed amount for the required service. If the health care plan you’ve chosen includes coinsurance for a specific health care service, you’re obliged to pay the coinsurance, plus all the deductibles you might owe.
  • Primary Care Provider (PCP): A primary care provider is a person who coordinates and helps you with accessing a range of health care services, as per the state law and in terms with the prearranged agreement you’ve made with the health care provider. PCP can be a physician, a M.D. (Medical Doctor) or a D.O. (Doctor of Osteopathic Medicine), clinical nurse specialist, nurse practitioner, physician assistant etc. 
  • Copayment: Copay is the fee you pay for a covered health care service once you’ve received it. This amount usually varies, depending on the type of the covered health care service or item. On a side note, after you have reached your out-of-pocket limit, the copayment fee is not charged. 
  • Annual Out-of-Pocket Limit: An out-of-pocket maximum is a limit on the amount of money you have to pay for covered health care services on a yearly basis. If that limit is met, your prearranged health plan will have to pay 100% of all covered health care costs for the rest of the plan year. A plan year represents the 12 months between the effective date of your coverage and the date it ends.
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