Understanding some health insurance-related jargon is a great way to better educate oneself about the industry.
Benefit period: The benefit period refers to the duration of time services are covered under your plan. It is usually a calendar year from the point of start to end. It may begin each year on an anniversary date when you first received coverage.
Coinsurance: This is a percentage of the cost of services rendered in specific areas outlined by the health plan that you are responsible for after a deductible is met. For example, a plan may cover 85 percent of costs, with patients responsible for the remaining 15.
Copayment (copay): A copayment refers to the flat rate you pay to a provider at the time you receive services. Some plans do not have copays.
Deductible: The amount you pay for health services before the insurance company pays. You must meet a set limit, which varies by plan and provider, before insurance will kick in and cover the remaining costs during the benefit period. Many plans have a $2,000 per person deductible. This deductible renews with each calendar year.
HMO: A health maintenance organization offers services only with specific HMO providers. Referrals from a primary care doctor often are needed to see specialists.
HSA: A health savings account enables you to set aside pre-tax income up to a certain limit for certain medical expenses.
Long-term care insurance: A specific healthcare plan that can be used for in-home nursing care or to pay for the medical services and room and board for assisted living/nursing home facilities.
Network provider: This is a healthcare provider who is part of a plan’s network. Many insurance companies negotiate set rates with providers to keep costs low. They will only pay out a greater percentage to network providers.
Non-network provider: A healthcare provider who is not part of a plan’s network. Costs may be higher if you visit a non-network provider or if you are not covered at all.
PPO: A preferred provider organization is a type of insurance plan that offers more extensive coverage for in-network services, but offer additional coverage for out-of-network services.