Thursday, August 20, 2015

Health Insurance Jargon: The 411

When it comes to understanding health insurance jargon, things can get a little confusing. Now with the Affordable Care Act in place, understanding health insurance can be frustrating. Here are a few important health insurance terms and their meanings to get you started; then give Insure the Lake a call to help you out with the rest!

Key Health Insurance Terms

1. Allowable Charge - the amount considered by a health insurance company to be a reasonable charge for medical services or supplies based on the rates in your area.

2. Benefits - refers to what kinds of things your insurance company will pay for.

3. Claim - a request by the insured person, or their health care provider, for the insurance company to pay for medical services.

4. Co-Insurance - the shared cost of the insured person and the insurance company, usually referring to the amount paid by the insured person for a given service or product, once any deductible is met.

5. Co-Pay - a set amount that your insurance company has decided you will pay each visit after your deductible is met.

6. Coverage Limits - maximum benefits (typically annual or lifetime) on certain services or expenses, i.e. maximum of 10 permitted chiropractic visits per year or a 1 million dollar lifetime maximum on prosthetics.

7. Deductible - the amount of money you must spend out of pocket before your health insurance will cover anything.

8. Dependant - any individual, either spouse or child, that is covered by the primary isured person's plan.

9. Drug Formulary - a list of prescription medications covered by your plan.

10. Effective Date - the date on which a policyholder's coverage begins.

11. Exclusion - any medical expense that is not covered by the insurance policy.

12. Explanation of Benefits - the health insurance company's written explanation of how a medical claim was paid, including detailed infomation about what the company paid and what portion of the costs you are responsible for.

13. Group Health Insurance - a coverage plan offered by an employer or other organization that covers the individuals in that group and their dependents under a single policy.

14. Health Maintenance Organization (HMO) - a health care financing and delivery system that provides comprehensive health care services for enrollees in a particular geographic area.

15. Health Savings Account (HSA) - a personal savings account that allows participants to pay for medical expenses with pre-tax dollars.

16. In-Network Provider - a health care professional, hospital or pharmacy that is part of a health plan's netwrok of preferred providers, generally offering services at a lower cost in exchange for the insurance company sending more patients their way.

17. Medicaid - a health insurance program created in 1965 and funded by the federal and state governments, that provides health benefits to low-income individuals who cannot afford Medicare or other commercial plans.

18. Medicare - the federal health insurance program that provides health benefits to Americans age 65 and older and those who are disabled.

19. Network - the group of doctors, hospitals, and other health care providers that insurance companies contract with to provide services at discounted rates.

20. Out-of-Network Provider - a health care professional, hospital or pharmacy that is not part of a health plan's network of preferred providers.

21. Out of Pocket Maximum - the maximum amount an insured person can be responsible to pay, besides premiums and co-pays in a given year. 

22. Pre-Existing Condition - any medical condition the insured person has prior to the start of hte insurance policy.

23. Preferred Provider Organization (PPO) - a health insurance plan that offers greater freedom of choice than HMO plans.

24. Premium - the amount of money you must pay to keep your health insurance current.

25. Preventative Services - routine health care that includes check-ups, patient counseling and screenings to prevent illness, disease and other health-related problems.

26. Rider - coverage options that enable you to expand your basic insurance plan for an additional premium, for example a maternity rider.

27. Underwriting - the process by which health insurance companies determine whether to extend coverage to an applicant and/or set the policy's premium.

28. Waiting Period - any length of time after a policy beigns during which certain medical expenses may not be covered, i.e. a 6-month waiting period on expenses related to cancer.

Now that you understand health insurance terminology a little better, you're prepared to make sure you have the right coverage for you! A lot of changes have been made to the health care industry since the Affordable Care Act was implemented, so be sure to discuss your coverage with a trusted insurance agent at the Lake of the Ozarks. At Insure the Lake, we can help you determine your best course of action and if you are eligible for premium assistance.

Request a Free Quote Online! Contact Insure the Lake today for all your Lake of the Ozarks insurance needs! 

About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.

Steve Naught, CIC
3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral