One of the easiest ways to get confused when you’re searching for health care is to misunderstand what words mean or to confuse two different types of plans or payments. It’s important that you understand what you’re looking at and what you’re buying. These are some of the most commonly used health insurance terms to know:
COBRA – Requires that employers cover employees for a limited time after they are terminated to avoid a lapse in coverage.
Coinsurance – The percentage you pay for your care each year.
Copayment – The dollar amount that you pay your doctor or provider in exchange for your service, after your coverage.
Deductible – The dollar amount that you are required to pay before your plan can begin covering you.
Ex – A $500 deductible means you will not be covered until you spend $500 on health care each year.
Dependents – Family members added to a plan (usually spouses and children)
HMO (Health Maintenance Organization) Plan – Out-of-network providers are generally not covered at all; you will usually pick one primary physician and go there for almost all of your health care needs.
HSA (Health Savings Account) – Available if you’re a taxpayer in a high-deductible plan. Allows you to set aside tax-free money to use for health care purposes.
Indemnity Plan – Based on a fee-for-service model. Usually, this requires that you pay out-of-pocket and get reimbursed later after filing a claim.
In-network – If a provider (doctor, pharmacy, etc.) is in-network, it means they have agreed to charge a set rate that your insurer agrees with. Your care will be much cheaper if you choose a provider that is in-network with your plan.
Out-Of-Pocket Limit – The maximum amount you will have to pay for your services (basically a cap on your total deductibles, coinsurance, and copayments).
Policyholder – The plan is in this person’s name. Your spouse or parent may be your policyholder.
POS (Point-Of-Service) Plan – Has a very specific doctor network but also allows you to visit other doctors (with an extra cost).
PPO (Preferred Provider Organization) Plan – Includes a very specific doctor network that will significantly lower your costs if you use them.
Premium – The cost you pay on a regular basis for your health care plan. Usually charged monthly.
If you still need help understanding a term or if you’d like help with your health insurance, give HealthTN a call at 615-541-4257.