Using health insurance can be confusing, understanding the terms can be even more confusing. Here's a breakdown of the top 5 key terms used in health insurance, and what they mean to you.
1) Premium: The amount of your health insurance coverage. You and/or your employer pay premium monthly, quarterly or annually.
2) Deductible: The amount you owe for health care services before the plan begins to pay. For example, if you have a $500 deductible, you will pay $500 before the plan begins to pay anything. Deductibles do not always apply to all services, many plans have co pays and you will pay co pays instead of paying anything towards your deductible.
3) Co-Payment: A fixed amount you pay for covered services, usually due at the time of service. Co-pays vary based on service.
4) Co-Insurance: Co-insurance is your share of the cost of health care services, calculated as a percent of the allowed amount. For example, if you have met your deductible and you have a hospital bill with an allowed amount of $1,000 and your co-insurance is 20%, you owe $200.
5) Out of Pocket Maximum: The out of pocket maximum set for a plan is the maximum amount you will pay before the plan starts paying 100% for covered services. This limit includes deductibles, coinsurance and co pays.
The way your plan covers services is not something you want to find out when it's too late. Review your health coverage before you head to the doctor of hospital. You don't want any surprises!