Health Insurance Terms and Definitions
One of the biggest problems for most people is simply understanding the
Co-payment or Co-pay
A co-payment is a pre-determined amount that you must pay a medical provider for a particular type of service. For example, you may be required to pay a $15 co-payment when you visit your doctor. In this instance, you must pay $15 to the doctor’s office at the time of the visit. Normally, you are not required to pay any additional fees — your
A deductible is the amount of your medical expenses you must pay for before the
Coinsurance (or out-of-pocket expense) is the amount or percentage of each medical charge that you are required to pay. For example, you may have a $100 medical charge. Your
Coinsurance accrues throughout the year. If you have a large number of medical charges in one year, you may meet the coinsurance maximum requirement for your policy. At that point, any covered charges will be paid at 100% for the remainder of the calendar year.
Stop loss or out-of-pocket expense limit
Sometimes you will hear the out-of-pocket expense limit referred to as your stop loss or coinsurance amount. Basically, this is the amount you will need to pay out of your own pocket per calendar year before the
You will need to check your policy because many policies that require co-payments do not allow these co-payments to go toward the out-of-pocket amount. For example, you may have reached your out-of-pocket maximum for the year, so if you are admitted to the hospital you may pay nothing. However, since you have to pay a $15 co-payment every time you visit the doctor, you will still have to make this co-payment.
Lifetime maximum benefit
This is the maximum amount that the
Preferred Provider Organization
A Preferred Provider Organization (also known as a PPO) is a group of participating medical providers who have agreed to work with the
You will see this term in all
Routine treatment is generally defined as preventive services. For example, a yearly physical examination that you have on a regular basis is generally considered to be routine. Many of the immunizations that children and adults receive fall under this classification. Some insurance companies provide limited coverage for routine treatment; others provide no benefits at all.
A pre-existing condition is a condition that you acquired and/or received treatment for prior to the effective date of your current
Be sure that you are very clear on the pre-existing limitations of your policy so that you are not unpleasantly surprised when you visit your doctor.
Explanation of Benefits
Coordination of Benefits
If you are eligible for benefits under more than one
A nonparticipating provider is a medical provider who does not have a contract with a particular
Limited benefit plans
These are not considered to be comprehensive medical insurance plans. Instead, they provide very specific, limited benefits for different types of services. For example, they may provide a flat rate for each day you stay in the hospital or pay a limited amount for each surgical procedure that you have.
Typically, they are marketed toward people who cannot afford or are unable to obtain more comprehensive coverage due to pre-existing
If this is your only coverage, be aware that you will usually have to pay a large portion of any bill as these limited plans do not usually pay large amounts per day. For example, it may actually cost you $1000 a day to stay in the hospital. If your limited benefit plan pays you $200 a day for each day you spend in the hospital, you will be personally responsible for the remaining $800 per day.
Medicare supplement plans
People who have Medicare often choose to purchase a Medicare supplement plan as Medicare does not usually cover medical charges in full. Medicare continues to change and add new options but, in general, a supplemental plan pays the balance of the medical charges after Medicare pays its portion. For example, most Medicare supplements will pick up the Medicare deductible.
Some policies also pay for some of the charges that Medicare may not cover. There are many different policy variations. If you are not sure what you are purchasing, consider contacting a broker that assists senior citizens.
Source by S D Smith