Get familiar with common medical insurance terms and how to understand them. A Health & Medical guide to navigating the complexities of insurance coverage. Want to know the basics of health insurance? You may have found the right page because this seems to be the right place to start. This page aims to simplify the confusion surrounding the terms of medical -insurance and how one can make sense of all the technicalities associated with an insurance company. More specifically this page seeks to make cover holders understand the foreign language called insurance. It is one level of complexity to look for an insurance plan and a entirely another to be able to comprehend what you are seeing written in front of you.
What do you mean by Medical Terms in Healthcare?
Medical terms can be defined as the language or specialized vocabulary possessed by healthcare professionals that pertains to human anatomy, illness, treatment, and operations. When it comes to the health insurance coverage, it is important to learn medical basic words as words used in the health insurance plan detail what is in the plan and what some treatments, drugs or procedures are.
These words are very useful in a health insurance context:
âco-paymentâ, âco-insuranceâ, âcoinsuranceâ, âout of pocked limitâ,â premium âdeductibles which are equally common terms in health insurance. These are the cost-sharing responsibility which is placed upon the policyholder and the insurer for medical expenses.
Understanding medical terms is very essential as it helps you read the policy documents of your insurance company as well as help you with transferring from one health care center to another.
Health Insurance Explained with Healthy Tips: Some Basic Concepts
Health insurance as a contract is intended to reimburse for healthcare expenses incurred by the insured. A monthly fee is charged in the form of a premium and in return, the insured is able to avail coverage that pays for expenses such as attending the doctors, getting hospitalization, purchasing prescription drugs etc. However, different plans and types of coverage can be confusing. Let us demystify some terms associated with medical insurance and see how these terms help understand health insurance.
Key Health Insurance Terms You Need to Know
Premium: One of the fundamental types of expenses under health insurance, a premium is paid on a monthly basis, quarterly basis or an annual basis. This expense ensures that the health care plan covers general medical expenses on the policy holder.
Deductible: The question of what surgical deductibles are, surgical deductibles translate to money, the policy holder pays for healthcare practices that fall under insurance before the insurance starts to pay. Letâs say, for example, a person says that I have a medical plan where the deductible is $1000. This means that he or she has to pay out this amount on medical practice before insurance steps in.
Co-payment (Co-pay): Co-pay is the amount, or a fixed dollar amount earned for spending on the health service distributed out to the public and covers health service after the deductible has been paid. For instance, in a doctorâs visit, it is possible that a patient may be given samples for example which may cost twenty dollars, co-pay twenty dollars means the patient pays twenty dollars, the rest is met by the insurance.
Co-insurance: In contrast to the several co-payments, co-insurance is the percentage of the total price of certain medical services which one has to pay after fulfilling their deductible. For instance, one would have to pay 20 percent of the total amount of a service with the 20 percent co-insurance, the remaining 80 percent will be paid by the insurance company.
Out-of-pocket maximum: It is usually an annual figure, and the amount will not exceed the costs incurred by a person on mandatory medical insurance for provided treatments over the duration of that policy. Once the limit has been reached, all the covered services will be met with a 100 percent charge from the insurer for the remaining relevant period.
What Are the Two Most Popular Health Insurance Plans?
Health insurance has a number of subcategories, however two of the sub-categories are Health Maintenance Organization (HMO) plans and Preferred Provider Organization (PPO) plans. Below is confusion regarding every next quotation:
Health Maintenance Organization (HMO): HMO plans will most likely put emphasis on PCP assignment to members in order to manage their care. To seek specialist services, a referral from the PCP is mandatory and members typically have a specific network of physicians and hospitals. Premiums for HMOs are usually lower, but they are much more restrictive.
Preferred Provider Organization (PPO): The main advantage of a PPO plan is that it provides you greater freedom in choosing a healthcare provider since any provider can be chosen without needing a referral. However, if you go to a healthcare provider within the insurerâs network, your out-of-pocket expenses will be significantly lower. Because they include more healthcare specialists and allow patients to go out-of-network, grazing leaves relatives with higher costs than HMOs.
How Does Health Insurance Operate in the United States?
In the United States, health insurance works by sharing the burden of health care costs among many people. When you pay your premium, you collect a large amount with other individuals in the same insurance plan with the hope that the costs will be incurred when you or any of the members in the group needs medical attention.
Here is a step-by-step illustration of how health insurance operates in the United States:
You pay a premium: There is the recurring amount that goes into ensuring that your insurance remains in force.
You meet your deductible: You will pay an amount of certain health care outreaches before the health insurance starts paying for the specific services.
Co-pays and Co-insurance: After your deductible is reached, it is highly likely that you will make a co- payment or co-insurance which is the payment made for some of the services.
Insurance pays its share: And when you co-payment or co-insurance together with the deductible amounts are utilized, the remaining cost of the services is borne by the insurance company.
Out-of-pocket maximum: And once the out-of-pocket maximum is attained, then further charged for covered services will not apply for that particular calendar year.
For those in need of medical assistance, health insurance plays a role in mitigating the financial impacts incurred for the medical services enabling people and families to seek expensive medical help easily.
Making Sense of Health Coverage â Types & Plans
This kind of insurance can be appropriate for an immense array of services that encompass but are not exclusive to provider visits, emergency room visits, surgeries, mental services, and medications. But variations on plans may involve differences regarding what is covered or the scope of the plan itself. Letâs examine what the basic types of health coverage languages are:
Individual Health Coverage: Coverage of this kind is purchased directly by a single individual, as opposed to their employer. It is usually expensive because it is not party to a group.
Family Health Coverage: Covers an entire family including children under one coverage. The premium is higher than that of an individual coverage but offers coverage for several people.
Employer Health Coverage: Health coverage is among the great perks offered to employees by their employers which are many and very affordable when the employer usually subsidizes the monthly premiums.
Government Health Coverage: Programs like Medicare or Medicaid will offer health coverage that is targeted towards specific demographics, those being seniors and the economically challenged.
How Health Insurance Affects Your Access to Medical Care
The relation between health insurance and medical care is straightforward â health insurance determines the way you access care, the service you get, and the out-of-pocket expenses incurred. We donât ration our checkups, screenings, and necessary treatments when we are covered because we donât have to pay for everything out of pocket. Depending on the policy and its level, it is possible to have a large choice of doctors and hospitals, or even specialists or prescriptions for a small co-payment.
On the other hand, if you have no health insurance, your chances of healthcare are extremely expensive forcing many people to postpone or avoid work when ill â exposing them to more harm and more costs in the future.
Common Health Insurance Mistakes that Need to be Avoided
Understanding insurance terms is one thing but just as easy is making errors that are typical when it comes the time to choosing a plan for health insurance. Here are some mistakes to watch out for:
Not Thinking of Other Scenarios: This is a basic principle which many ignore making a plan. Shop around for other plans as well before making a decision that eliminates all competition.
Not Expecting Out-of-Pocket Spending: A plan with low premium may appear attractive in the eyes of the customer but may be one that is fraught with high deductibles or some co-pays. Always check expectations and expenditures for potential costs.
Neglecting the Benefits of Prescription Coverage: There are some plans which do not have any coverage of your prescriptions, therefore make sure you have checked the formulary before joining any of the plans.
Opting for a plan with restricted access to providers: It is important to look out for the network of doctors and hospitals provided under your plan. Choosing a plan with limited access will restrict your healthcare choices.
Frequently Asked Questions about Health Insurance
1. How do HMO and PPO health care plans differ from each other?
With HMO plans you are generally expected to select a primary care physician who you will usually need to refer to a specialist. These plans tend to have a lower premium but are not as flexible when it comes to provider selection.
PPO plans allow their members more freedom in terms of specialists without referrals requirements, although they will incur greater costs from out of network providers where in network doctors will be cheaper. PPOs are usually more expensive in terms of premiums but greater access to care is provided.
2. What are the benefits of having health insurance?
In general, health insurance is particularly known to cover many services such as:
Visiting the doctor or having a routine checkup
Admission into the ward
Targeted emergency treatment
Medications acquired through prescriptions
Counseling or therapy
Other forms of prevention e.g. vaccination or screening services
Child and maternal care
Other preventative treatments and diagnostic tests i.e. x rays or MRIs specialists without referrals nor prior authorization but it would be more cost-effective to go a network provider. HMO plans usually have lower premiums compared to PPOs however specialist and out of network provider access is much easier with PPO plans.
Summary
It can seem quite daunting to learn and remember the terms associated with health insurance. However, as in real life, with any new task, once you get the hang of the fundamentals, things will only become smoother. For those considering their very first health insurance policy or trying to upgrade the one they have, this guide should enable such users to make self-assured choices. Always remember to go through the terms and conditions comprehensively, find out which options are the best for you, and do not hesitate to voice your concerns. It’s quite evident really â getting health insurance is a significant purchase, and such a plan or coverage has to be well researched in order to get the most out of it.
