Health insurance can be confusing, especially when it comes to understanding health insurance vocabulary and jargon. However, understanding health insurance terms is crucial, especially when selecting a health insurance plan. Whether it’s offered through your employer or you’re purchasing independent health insurance, it’s extremely important that you make the right choice for your specific healthcare needs. To help you make the best decision, let’s go over common health insurance terms and definitions.
Choosing a Plan: Health Insurance Terms You Should Know
You can’t make the right decision regarding an insurance plan if you don’t understand what it’s offering you. While the following terms don’t cover everything, here are some of the most important health insurance terms to know when choosing a plan:
- Deductible: The deductible refers to the amount of money you need to pay on an annual basis to cover your medical expenses. After you reach your deductible amount, your insurance policy will begin covering the full cost of your medical expenses.
- Copayment: The copayment, also known as a copay, refers to the flat fee you’ll pay for particular medical expenses. For example, you might pay a $20 copayment for a healthcare clinic or doctor’s office visit. It’s your responsibility to cover the copay; your insurance policy will pay for the rest of your visit. The copayment is one of the ways that you share your medical expenses with your health insurance company.
- Premium: The premium refers to the amount of money you pay on a monthly basis for your health insurance coverage.
- Rider: Riders refer to additional health insurance options you can add to your basic plan for an extra premium. Examples may include maternity coverage for expenses incurred during birth or personal accident riders for coverage if you suffer an injury from a serious accident.
- Underwriting: Underwriting refers to the process that health insurance companies use to determine whether they should give coverage to a specific applicant. Companies also use the underwriting process to set the premium for the policy.
- Waiting period: The waiting period refers to the amount of time an employer has a new employee wait before they are deemed eligible for health insurance coverage within the company plan. The typical waiting period ranges from approximately 30-90 days.
Health Insurance Terms Explained
Once you’ve selected and enrolled in your insurance plan, there’s a whole new set of health insurance terminology to tackle. Luckily, these are mostly straightforward and are often explained in your enrollment paperwork.
Health Insurance Glossary:
- Provider: The provider refers to a dentist, a nurse, a doctor, or any other person or institution, like a clinic or hospital, that offers healthcare services or medical care.
- Network: The network refers to the group or network of hospitals, doctors, healthcare clinics, and other providers that health insurance companies partner with to offer healthcare services at lower rates. Patients usually pay less for healthcare services that they get from providers that are considered in-network (see below).
- In-network provider: An in-network provider refers to a pharmacy, hospital, or healthcare professional that is considered part of a network of preferred providers for a specific health insurance plan. Patients usually pay less for services they get from in-network providers than for services they receive from out-of-network providers, as the providers offer a discount for their healthcare services in exchange for the company sending more patients to them.
- Out-of-network provider: An out-of-network provider refers to a pharmacy, hospital, or healthcare professional that is not considered within the network of providers for a specific healthcare plan. Patients typically pay significantly more for services they get from out-of-network providers than for services they receive from in-network providers.
Medical Insurance Terminology Guide
You did it: You enrolled in a plan and selected a provider. Now you need to familiarize yourself with medical insurance terminology, so you know what services are available to you through your plan.
- Rehabilitation: Rehabilitation, or rehabilitative services, refer to healthcare services that help you improve your functioning and daily living skills that you may have lost when you were disabled, hurt, or sick. Rehabilitative services can include psychiatric rehabilitation services, speech language pathology, physical therapy, and occupational therapy in a wide range of outpatient and inpatient settings.
- Inpatient care: Inpatient care refers to healthcare services you receive when you are an inpatient in a hospital, skilled nursing facility, or another healthcare facility.
- Outpatient surgery: Also known as same-day surgery, ambulatory surgery, or day surgery, outpatient surgery refers to surgery that takes place on the same day that you arrive and doesn’t require an overnight stay at a hospital or healthcare facility.
HealthCare Payment Terminology
Lastly, be sure you’re able to decipher the bill (or prevent a hefty one from coming your way). Here are quick definitions of common healthcare payment terms:
- Out-of-pocket maximum: The out-of-pocket maximum refers to the largest amount of money you might pay annually for health insurance coverage. The out-of-pocket maximum includes any coinsurance, copayments, and deductibles and is an extra amount of money on top of the premiums that you regularly pay throughout the year. Once you reach your out-of-pocket maximum, the health insurance company will pay for any and all expenses for the rest of the healthcare year.
- Allowable charge: Also known as the maximum allowable, the allowed amount, or the usual, customary, and reasonable (UCR) charge, the allowable charge refers to the amount of money considered to be a reasonable charge for medical supplies or services by the health insurance company, based on the healthcare rates in your region.
Taking care of your health and well-being is crucial. At Eden Health, we believe everyone should feel empowered to understand all aspects of their health insurance plan. As part of our collaborative care model, Eden Health members have access to our team of Healthcare Navigators who can help demystify complex medical bills, provide claims support, and more. Contact a member of our team today to learn more.