When it comes to health care, the terms you hear or read can sound foreign. This can make finding an affordable health care plan more difficult than it already is.
A smart health care consumer is someone who understands the health care system. By learning the basic terms of health care, you will be able to determine the plan best suited for your medical needs.
Instead of paying thousands of dollars in medical expenses, you will be able to find one that covers the majority of your costs.
Do not feel intimidated the next time you speak with a health care professional, you simply need to educate yourself on the following health insurance terms explained in the following sections below.
Keep in mind that these terms may vary slightly by health insurance policy or plan.
Health Care Provider Terms
These terms are essential when figuring out what kind of doctors and facilities you are eligible to receive service from at a low-cost.
When choosing your health care insurance company, you will want to know what health care professionals are available to you, depending on the medical services you need.
- A provider is defined by health care insurance companies as a licensed physician, health care professional or facility.
- A preferred provider is a health care provider approved by your insurance company to offer you discounted services. These providers typically have contracts with your insurance company.
- A network is a compilation of preferred providers, facilities and suppliers that are covered to some extent or fully by your health insurance company.
- An out-of-network provider is a health care provider that is omitted from your insurance company’s network. These providers may offer services that are not covered by your plan.
- A specialist is a physician that provides a service of expertise for a specific type of medicine. For example, you may see an allergist or immunologist to treat an immune system disorder or you may see a cardiologist after experiencing a heart attack.
Health Care Payment Terms
These terms are essential in determining your health insurance costs and payments. Look out for the following terms when researching health insurance policies:
- Premiums are payments you make to your insurance company depending on your coverage plan. These payments are due at certain times of the month, quarter or year.
- A deductible is the amount you must cover for your own health care services before your insurance provider begins paying. For example, if you have a $1,500 deductible, you must pay for all of your medical expenses until you have paid $1,500. Once you pay this deductible, your insurance company will start paying for a portion or all of your expenses.
- A copayment is the amount you pay after receiving a covered medical care service. You may need to pay a fixed copayment after visiting a specific doctor or receiving a particular service. For example, your health insurance provider may require that you pay a $15 copayment for a doctor visit to treat a common cold. However, not all companies require copayments.
- A coinsurance is a fixed percentage of the cost you must share with your health care insurance provider. For instance, you may have to pay 15 percent of coinsurance fee, while your insurance company covers the other 85 percent.
- An allowed amount is the maximum amount an insurance provider will pay for a health care service. Once this allowed amount has been exceeded, you will have to pay the difference.
- An out-of-pocket maximum is the limit of how much you pay during a policy period, typically a year. After the maximum has been reached, your health insurance plan will begin to the allowed amount in full.
- An Explanation of Benefits (EOB) is a receipt administered by your insurance company that outlines your history of services and fees. The information provided on this document is important to determine if there were any billing errors made from a medical care facility.
Common Health Care Insurance Plan Terms
There are a variety of health care plans that you will come across when choosing or evaluating your health care insurance company.
While some plans encourage you to use preferred providers within their network, others contribute to a portion of costs for out-of-network providers.
The following are three types of common plans to look out for.
- An Exclusive Provider Organization (EPO) is a plan that is restricted to a specific network of doctors, specialists and facilities. No out-of-network providers are covered under this plan. However, some companies make exceptions in the case of an emergency.
- A Health Maintenance Organization (HMO) is a plan that restricts beneficiaries in using in-network providers. However, many HMOs provide a large selection of contracted health care providers offering an array of medical services. HMOs generally focus on preventative care and wellness.
- A Preferred Provider Organization (PPO) is a plan that encourages you to obtain service through a list of in-network providers, but will cover a small portion of out-of-network providers. While you are subject to receive out-of-network service, receiving in-network service is highly recommended because it ensures that the majority of your claims will be covered.
Health Care Service Terms
Determining which health care services fit your medical needs is important when choosing a health care plan. After all, it is the main reason you seek health care insurance.
Evaluate your current health and take into account any possible medical emergencies. While plans vary by insurance companies, look out for the type of services offered when deciding on a plan.
- Inpatient Services are services that you receive when you are admitted to a hospital for at least 24 hours. These overnight stays include a room and board fee.
- Outpatient Services are services provided to patients who do not stay at a facility for more than 24 hours. This would involve patients coming and going for appointments at a physician’s’ office or clinic.
- Preventative Care is medical care that aims to prevent potential illnesses and identify a disease early on. This includes periodical checkups, vaccines and screenings.
- Skilled Nursing Care is service provided by licensed nurses in a nursing home or the comfort of a patient’s own home. A nursing home is a licensed facility that provides nonstop care to residents in need of daily supervision and assistance.
- Rehabilitation Services are medical care services provided in inpatient and/or outpatient facilities to treat those suffering from physical and occupational impairments or disabilities. These services include speech-language pathology and joint replacement rehabilitation.
- Urgent Care is service provided for an injury or illness that needs medical attention right away. However, the service is not recommended for life-threatening emergencies.
- Emergency Services are provided to assess and treat severe life-threatening or damaging conditions. In the case of a life-threatening emergency, visit a hospital’s emergency room.