Here Are the Basic Health Insurance Terms You Need to Understand
When dealing with health insurance matters, it’s quite easy to get caught up in a lot of jargon. It’s especially true among members or plan holders who are not in the healthcare industry.
However, basic knowledge about health insurance terms is important. It is to help you get to know how your insurance policy works much better. It also helps you get the most about your health insurance coverage. After all, knowledge is power.
In order to understand the basics of your health insurance coverage better, here are common health insurance terms you need to know about.
Coinsurance refers to the amount or the portion that you have to pay for a service after the deductible has been met. Usually, the health insurance provider covers the bigger portion of the service then the member pays the difference.
A copay is a fixed amount that a member has to pay out-of-pocket for certain services. The most common service that requires a copay is a doctor’s visit or consultation.
It’s generally a small amount that the insurance holder has to pay upfront when the medical service is rendered. Whatever the difference after the copay, the insurance company covers.
It’s an amount that the member has to pay first before the insurance coverage kicks in. For example, if your health insurance plan has a $500 deductible, you have to pay for certain services first to exhaust the deductible. Once you do, your coinsurance begins to take effect.
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When you say in-network, this refers to the network of medical practitioners and providers under the insurance provider. These in-network providers are under contract with the health insurance company.
In contrast, out-of-network refers to medical practitioners and providers that are not under contract with your health insurance provider.
In cases where you get professional help from these out-of-network providers, cost of services would generally be more than those who are in-network.
The out-of-pocket maximum is the maximum amount per plan year that a member pays before the insurance covers all services, excluding the ones needing copays, at 100 percent. This generally includes deductible and coinsurance payments.
Primary Care Physician
The primary care physician, also known as the PCP, is the doctor who is your main medical care provider.
The PCP takes care of your medical needs in general. However, if you will need care that is out of the provider’s scope, the PCP coordinates and refers you to their network of specialists.
Insurance holders under a Health Maintenance Organization (HMO) plan, one of the affordable healthcare plans in the market, generally require them to select a PCP.
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Understanding is key.
There are definitely more health insurance terms that you might encounter but these examples will help you understand your health care coverage much better.
If you ever get confused, never hesitate to ask your health insurance providers and health care experts to explain more complex terms and processes for you.
Getting a health insurance coverage is very important. Understanding how it works will go a long way. It’s important that you will get the most out of your health insurance coverage. After all, this is for your own benefit.
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