Receiving health insurance quotes can be very confusing if you do not understand some of the terminology used and what you can request to make your premium lower as opposed to what you can request so that your out of pocket expenses are lower.
Some important terms to know:
Deductible: A specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for some claims. Depending on the type of health insurance, there are some claims that will be paid without the deductible. Most popular deductibles are $500, $1,000, $2,500, $5,000, $10,000. In most cases the higher the deductible, the lower the premium you will pay.
Co-payment: A predetermined charge that your health insurance plan may require that you pay for a specific medical service or supply, also referred to as a "co-pay." For example, your health insurance plan may require a $15 co-payment for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.
Coinsurance: The amount that you are obliged to pay for covered medical services after you've satisfied any co- payment or deductible required by your health insurance plan. Coinsurance is typically expressed as a percentage of the charge or allowable charge for a service rendered by a healthcare provider. For example, if your insurance company covers 80% of the allowable charge for a specific service, you may be required to cover the remaining 20% as coinsurance. The most popular percentages are 100/0 (you pay $0 of the charge, the insurance company pays it all), 80/20 (you pay 20% of the charge, the insurance company pays 80%), 70/30 (you pay 30% of the charge, the insurance company pays 70%) and 50/50 (you pay half, the insurance company pays the other half of the charge). In this case the lower the percent you pay, the higher the premium will be.
Out of Pocket Maximum: A predetermined limited amount of money that an individual must pay out of their own savings before an insurance company will pay 100% for an individual’s healthcare expenses.
Out of Network: Refers to physicians, hospitals, or other health care providers who are considered nonparticipants in an insurance plan. In some cases the health insurance company will not pay for these services.
