Health Insurance: Cracking the Code


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Health Insurance: Cracking the Code
Health insurance has a language all its own. Here are some words you'll need to know:

• Claim: A detailed explanation of medical services
  that you or your doctor must submit to the insurance company in order to
  be reimbursed.
  
• Coinsurance: Similar to a co-payment except that
  instead of paying a fixed amount, you pay a percentage of the total
  cost. (Example: You have surgery that costs $5,000. You might have to
  pay 20%, or $1,000, while your health plan pays the other 80%, or
  $4,000.)
  
• Co-payment (or co-pay): The portion of the bill you
  are responsible for each time you receive a service. (Example: When you
  go to the doctor after you've reached your deductible, you may no
  longer have to pay the full $100; instead you may pay a $25 co-pay,
  while your insurance picks up the other $75.)
  
• Coverage limits: This means your health plan may stop paying once you reach a certain annual or lifetime maximum dollar amount.
  
• Deductible: The amount you must pay out of your own
  pocket before your insurance company will start paying for services.
  (Example: If you have a $500 deductible per year, and each doctor's
  visit costs you $100, your insurance may not kick in until you've been
  to the doctor five times.)
  
• In-network provider: Any doctor, hospital, or other
  provider of medical services that has agreed to be in your insurance
  company's network and to offer their services at discounted rates. Also
  called a participating provider. (Compare with out-of-network provider, below.)
  
• Non-covered services: Services that are not covered
  under your insurance policy, which means you will be responsible for
  all charges if you choose to get them. Examples of services that are
  frequently not covered include cosmetic surgery, chiropractic care, and
  alternative therapies like acupuncture.
  
• Out-of-network provider: Any doctor, hospital, or
  other provider of medical services that has not set up special rates
  with your insurance company. If you choose to use an out-of-network
  provider, your insurance may not pay as much toward that appointment —
  or your visit may not be covered at all. You have to pay the difference
  (or the entire fee) out of your own pocket. (Compare with in-network provider, above.)
  
• Out-of-pocket maximum: This is the dollar amount that your portion
  of health care costs cannot exceed each year. (Example: If your annual
  out-of-pocket maximum is $10,000 — and you have doctor's visits,
  procedures, and medication co-pays that have gone over that amount —
  your insurance will cover any further claims at 100%.)
  
• Policy: A contract between an insurance company and
  an individual that provides coverage for health costs in exchange for a
  set payment.
  
• Precertification: When you need to let your
  insurance company know in advance about any medical tests or procedures
  the doctor has ordered. If your insurance company requires
  precertification and you do not do this before receiving treatment, the
  procedure may not be covered.
  
• Pre-existing condition: Any injury or illness that
  existed before the date when your current policy started. Pre-existing
  conditions may not be fully covered.
  
• Premium: The amount you pay to the insurance company each month to buy health coverage.
  
• Primary care doctor/primary care physician: A
  doctor (usually a family practice or internal medicine doctor) who
  coordinates all your medical care, from annual physicals to referring
  you to specialists.
  
• Referral: When your insurance company requires your
  primary care doctor to authorize any visits to other doctors or
  specialists. If you don't get a referral, your visit may not be covered.
  
• Usual, customary, and reasonable: Terms that refer
  to the amount typically charged by health care providers for similar
  services in the area you live in. (Example: Your dermatologist charges
  $200 for an office visit, but most other dermatologists in your area
  charge $150. Your insurance company may reimburse based on a charge of
  $150.)