Definitions of Health Insurance Terms
One of the most difficult issues for most people is simply understanding their health insurance benefits. Health insurance policies, for the most part, try to be user-friendly in their wording, but many people are simply unfamiliar with medical and insurance terminology. To read the Future Generali Health Insurance Review, click here
Most health insurance policies also include something resembling a cheat sheet that summarizes policy coverage and covers the most common medical services. However, you must ensure that you understand the various things that are not covered by your plan. Many health insurance plans offer only limited coverage for services like mental health, chiropractic care, and occupational health. Physical therapy and home health care are frequently restricted to a set number of visits per year.
Co-payment versus Co-pay
A co-payment is a set amount that you must pay to a medical provider for a specific type of service. When you visit your doctor, for example, you may be required to pay a $15 co-payment. In this case, you must pay the doctor's office $15 at the time of your visit. Typically, you will not be required to pay any additional fees; your health insurance company will cover the remainder. However, if your health insurance policy requires it, you may be responsible for a co-payment and then a percentage of the remaining balance in some cases.
A deductible is the amount of medical expenses that you must pay before your health insurance company will start paying benefits. Most health insurance plans have a calendar-year deductible, which means that the deductible requirement resets in January of each new year. So, if your deductible is $1500 for the calendar year, as long as your medical expenses for the current year do not exceed $1500, the insurance company pays nothing for that year. Once the new year begins, you must begin again to pay for $1500 of your own medical expenses.
Coinsurance (also known as out-of-pocket expense) is the amount or percentage of each medical charge that you must pay. For example, you could have a $100 medical bill. Your health insurance company will cover 80% of the cost, and you will be responsible for the remaining 20%. Your coinsurance amount is 20%.
Coinsurance accumulates over the course of the year. If you have a high number of medical charges in a single year, you may meet your policy's coinsurance maximum. After that, any covered charges will be paid in full for the rest of the calendar year.
Limit on out-of-pocket expenses or stop loss
Your out-of-pocket expense limit is also known as your stop loss or coinsurance amount. Essentially, this is the amount you must pay out of pocket each calendar year before the health insurance company pays everything in full.
You should check your policy because many policies that require co-payments do not allow these co-payments to be applied to your out-of-pocket expenses. For example, if you have exhausted your out-of-pocket maximum for the year, you may not have to pay anything if you are admitted to the hospital. However, because you must pay a $15 co-payment each time you visit the doctor, you must still pay this co-payment.
Maximum lifetime benefit
This is the most the health insurance company will pay for your medical expenses over the course of your policy. This sum is typically in the millions of dollars. This amount is unlikely to be depleted unless you have a severe condition.
Organization of Preferred Providers
A Preferred Provider Organization (also known as a PPO) is a group of participating medical providers who have agreed to work at a reduced rate with the health insurance company. It's a win-win situation for both parties. The insurance company must pay less money, and providers are automatically referred.
Depending on whether you visit a participating or nonparticipating provider, you will see different benefit levels in most health insurance policies. A PPO plan gives the insured person more flexibility because they can visit either a participating or nonparticipating provider. They simply get a better deal if they use a participating one.
Organization for Health Care Maintenance
A Health Maintenance Organization (HMO) is a type of health insurance plan that requires you to use only certain medical providers. Unless you are outside of their network, no benefits are payable if you visit a nonparticipating physician. Typically, you must choose one main doctor to serve as your Primary Care Physician. (PCP). You must see this doctor first whenever you have a health problem. If they believe you require it, they will direct you to another network provider. You cannot, however, choose to see a specialist on your own; you must first consult with your primary care physician.
This term appears in all health insurance policies and is a common reason for claim denials. Most insurance companies will not pay for any expenses that are not medically necessary. Your health insurance company may not consider something medically necessary just because you and/or your doctor do. As a result, you should always double-check that any costly procedures you are considering are covered.
Treatment on a regular basis
Routine treatment is commonly referred to as preventive services. A yearly physical examination, for example, that you have on a regular basis is generally considered routine. This category includes many of the immunizations given to children and adults. Some insurance companies offer limited coverage for routine treatment, while others offer no coverage at all.