If you’re new to the idea of health insurance, it can be intimidating. The terms and jargon associated with it can feel like a foreign language to someone who’s unfamiliar with how it works. In this article, we’ll look at some common health insurance terms so that you can start understanding what your coverage entails.
Deductible: The amount of money you have to pay before your insurance kicks in. This is often the first thing people think about when they’re shopping for health insurance, but it’s important to look at all the other factors as well–like copayments, coinsurance and premiums (the latter two are explained below).
Deductibles can be high or low depending on the plan you choose; some plans have no deductible at all! You may also be able to choose between paying your deductible in one lump sum or monthly installments over time. If it’s too much money up front for you right now, consider choosing an option that allows monthly payments instead of just one big payment at once (and remember that this kind of flexibility should apply throughout the entire process).
Coinsurance is the percentage of the cost of a medical service that you’ll pay. It’s usually applied to each specific medical service, as opposed to being a flat amount for all services in a year or for all visits to one doctor. Coinsurance may be calculated based on the total cost of care or on the amount paid by an insurance company.
Coinsurance is also called copayment or cost sharing.
Copayment is the fixed amount you pay for a doctor visit or prescription. It can be a flat fee or a percentage of the cost of the service. Copayments are often used to encourage patients to use less expensive services, like visiting nurse practitioners instead of going straight to an emergency room when they have a cold.
If you have health insurance coverage through your employer (or another group), there will be rules about what kinds of copays are allowed for which kinds of services. For example, some plans may require members to pay more than $50 per year in out-of-pocket costs before their coverage kicks in; others might require them only pay $15 per year; still others might not allow any out-of-pocket charges whatsoever!
An exclusionary rider is a provision in a health insurance policy that excludes coverage for some services. The rider is usually optional and can be added to the policy for a fee. It’s often used to exclude coverage of certain types of treatment, such as experimental treatments or mental health services.
You may have heard the term “exclusionary rider” thrown around by your friends and family members when talking about their health insurance plans, but what does it mean? An exclusionary rider is a provision in a health insurance policy that excludes coverage for some services. The rider is usually optional and can be added to the policy for a fee. It’s often used to exclude coverage of certain types of treatment, such as experimental treatments or mental health services
An out-of-pocket maximum is the most you’ll have to pay for covered expenses in a given year. The dollar amount of your out-of-pocket maximum is determined by your health insurance policy, and it’s usually based on the total cost of all your medical claims during that period.
For example: Suppose you have a family plan with an annual deductible amounting to $3,000 per person. If each member goes to the doctor once in January 2017, then again in February 2017 (and again in March if necessary), then their total medical bills would be $4,000–$3k for themselves plus another $1k for their spouse’s visit(s). But because they were only billed once during those three months instead of multiple times like some other people might have been under different circumstances (i.e., if they had gone back every week), then there would only be one claim submitted during this period rather than many separate ones; therefore reducing how much money was spent overall despite having higher costs than most other families might experience due solely to circumstance rather than choice or preference!
Out-of-pocket limit or out-of-pocket maximum
The out-of-pocket limit, or maximum, is the most you will have to pay for covered services. It’s usually a dollar amount and can change from year to year.
The out-of-pocket maximum is calculated by adding up all your monthly premiums, deductibles, copayments and coinsurance payments for the year. Then subtract from that total any money you may have saved in a health savings account (HSA) or flexible spending account (FSA). You should also subtract any reimbursements from your insurance company for things like copayments or coinsurance that have been paid during the year. If there’s still some amount left over after those calculations are made, then that’s what counts as your out-of-pocket maximum for the year–you’ll never pay more than this number toward your medical bills throughout all 12 months combined!
Premiums and deductibles
- A deductible is the amount of money you must pay out of pocket before your insurance will cover any expenses. For example, if you have a $2,000 deductible and need surgery that costs $10,000, you would pay $8,000 ($10K – $2K) out-of-pocket before your insurance kicks in.
- A copayment is a fixed amount paid at each visit to the doctor or hospital. It’s often used as part of a ” coinsurance” plan where the insured person pays a percentage of their medical bill after meeting their deductible or coinsurance requirements (see below).
- Coinsurance refers to paying part of each bill based on what percent they’ve been charged by an insurer’s network providers–usually between 10%-50% depending on how much coverage they purchased when signing up for their plan; this amount could also include some type(s) like co-pays or co-insurance payments which are usually calculated based on whether someone uses services from within those networks rather than outside them (so if someone chooses not go through these networks then all costs related directly back into treating themselves will come directly out from pocket). There may also be caps placed upon how much one can spend over time before reaching certain levels within certain categories such as mental health services under some plans; however these caps usually increase over time so long as we’re still living here together.”
A glossary of health insurance terms for beginners.
- Account balance: The amount of money you have left in your account after you pay for services and deductibles. This is also called a deductible, but it’s not always a set amount that you have to pay each year before your plan starts paying 100% of all covered services. It can be more complicated than that!
- Annual limit: Some plans have an annual limit on how much they will pay out in benefits during a given year; once this limit has been reached, the policyholder must cover any further expenses out-of-pocket or find alternate coverage with another provider for which they may pay additional premiums (and perhaps even higher deductibles).
This glossary of health insurance terms is designed to help you better understand your coverage. You can use it as a reference when you’re shopping for new policies or looking for ways to save money on premiums or deductibles. The most important thing is that you understand what each term means so that when an agent asks if you want an exclusionary rider, they don’t leave out any details!