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Understanding
Health Insurance Terms
- Coinsurance
= the amount you are required to pay for medical
care in a fee-for-service plan after you have met
your deductible. The coinsurance rate is usually
expressed as a percentage. For example, if the
insurance company pays 80% of the claim, you pay
20%.
- Copayment
= another way of sharing medical costs. You pay
a flat fee every time you receive a medical service,
including routine office visits, prescriptions,
lab tests, X-rays, and/or emergency room care.
For example, some insurance plans and managed care
plans require you to pay $5.00 for every visit
to the doctor. The insurance company pays the rest.
- Covered
Expenses = Most insurance plans, whether they are
fee-for-service, HMO's, or PPO's, do not pay for
all services. Some may not pay for prescription
drugs and other may not pay for mental health care.
Covered services are only those medical services
and procedures that the insurer agrees to pay for
and should be listed in your policy.
- Deductible
= the amount of money you must pay each policy
year to cover your medical care expenses before
your insurance policy starts paying. Deductibles
are typically $100, $250, or $500 annually, but
some plans require a smaller deductible based on
diagnosis rather than based on time. Under this
option, you must pay a deductible, usually $50.00,
for each NEW diagnosis for which you receive care
each year.
- Exclusions
= specific conditions or circumstances for which
the policy will not provide benefits.
- HMO
(Health Maintenance Organization) = prepaid health
plans. You (or your employer) pay a monthly premium
which will cover your doctors' visits, hospitalizations,
emergency care, surgery, lab tests, X-rays, and
therapy. You must select a primary care physician
(provider) which will make all necessary referrals
for you to receive specialty or emergency care
at physicians and hospitals designated by the HMO.
- Managed
Care = system of controlling costs, utilization,
and services provided by the health care providers;
usually consists of HMO's, PPO's and similar hybrids
of the two.
- Maximum
Out-of-pocket costs = the most money you will be
required to pay for deductibles and coinsurance.
It is a stated dollar amount set by the insurance
company, in addition to regular premiums.
- Noncancellable
policy = a policy that guarantees you can receive
insurance, as long as you continue to pay the premium.
It is also called a guaranteed renewable policy.
- PPO
(Preferred Provider Organization) = A combination
of traditional fee-for-service and an HMO. You
are financially encouraged to use physicians and
hospitals which are part of the provider network.
When you do, you pay less money. However, you are
free to see any provider but you will be responsible
for paying a larger amount (usually expressed as
a percentage) of the cost.
- Preexisting
Condition = a health problem or diagnosis that
existed before the date your insurance became effective.
It usually refers to a problem for which you have
searched for medical care for in the past, but
may include symptoms that should have prompted
you to seek medical care even if you didn't receive
care prior to the effective date of your insurance
(e.g., a missed menstrual period could be the first
sign of a pregnancy).
- Premium
= the amount you or your employer pays for insurance
coverage.
- Primary
Care Doctor = usually your first contact to receive
health care, usually includes family physicians,
general internists, pediatrician, and gynecologist.
A primary care physician treats basic medical problems
and performs screening tests and practices preventive
medicine. He/she will refer you to a specialist
or general surgeon if you need care requiring special
expertise.
- Provider
= any person (doctor, nurse, dentist, dietitian,
psychologist, etc.) or institution (hospital, office,
clinic, radiology center, outpatient center, emergency
center, etc.) that provides medical care.
- Third-party
Payer = any payer for health care services other
than you. This can be an insurance company, an
HMO, a PPO, or the Federal Government.
* The information was taken from the "Checkup
on Health Insurance Choices" booklet developed
by the Agency for Health Care Policy and Research.
To order a copy of the above guideline, please contact:
- U.S.
Department of Health and Human Services,
Public Health Service, Agency for Health
Care Policy and Research, Suite 501, Executive
Office Center, 2101 Jefferson Street, Rockville,
MD 20852.
More
Information (External Links)
For
more information on health insurance, visit one or
more of the following websites:
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