Insurance can be pretty confusing, so here are some common health insurance terms to help you understand more about what your plan has to offer.
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 a yearly amount so when the policy starts again, after about a year, the deductible resets. 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.
This is the percentage of treatment costs that is the insured individual’s responsibility. A common co-insurance split is 80/20. This means that the insurance company will pay 80% of the costs associated with treatment and the insured is required to pay the other 20%.
A co-payment is a fixed dollar amount that a patient is required to pay at the time of service. It is usually required for regular doctor visits and when purchasing prescription medications.
This is the maximum amount a patient would have pay toward covered services during a benefit period. Generally, this is comprised of your deductible, copayments, and coinsurance, but it can vary by plan. Once the out of pocket is met, the plan will pay 100% of costs for the remainder of the benefit period.
Services your insurance policy will not cover. These cannot be appealed or disputed as they are written into the plan.
A Health Maintenance Organization plan arranges care for patients. Coverage is limited to providers who are contracted within the network, and it is subject to referrals from a primary care provider. No benefits) will be offered for services outside the network (besides emergency).
A Preferred Provider Organization is a form of health plan offering more freedom to the patient. With this plan structure, you have the freedom to see the providers and facilities of your choice without referrals. However, this does not mean that your coverage will be the same at each location. There are still network restrictions on your benefits. An in-network provider will result in a higher benefit, whereas on out of network provider will mean a lower benefit.
A Point of Service plan is a hybrid of the PPO and HMO plans. Like the HMO plan, you must select a primary care provider who will become your “point of service”. This provider will make referrals for you within the network for higher benefits, but you still have access to out of network benefits as with a PPO plan.
Offered with high-deductible plans, a savings account is made available to deposit tax-free contributions that you can use to pay for qualified medical expenses. This money will roll over year after year if not spent. Expenses can be paid directly from the HSA account utilizing a healthcare debit card. You may also pay out of pocket and receive reimbursement from the HSA
Coordination of benefits occurs when a patient has more than one health insurance policy. When a patient has multiple plans, their claims must be processed in a specific order. For example, if you have a plan through your employer it will be considered the primary plan, but if your spouse also adds you to their health plan it will be your secondary.
Generally, patients with multiple insurance policies receive a greater amount of coverage on their medical services, but this does not mean benefits are doubled. Insurance companies coordinate with each other to be certain that their portions are paid correctly. If you fail to inform your insurance company of multiple policies, they can freeze all payment on claims until an order has been established.
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