Understanding Health Insurance Terms
Coinsurance:
Coinsurance is your share of the costs of a covered healthcare service calculated as a percent (for example, 20 percent) of the allowed amount for the service. You pay coinsurance plus any deductibles you still owe for a covered health service.
Premium:
A premium is the amount of money charged by an insurance company for coverage. The cost of premiums may be determined by several factors, including age, geographic area, tobacco use, and number of dependents.
Copayment:
A copayment, or copay, is a fixed amount you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered health care service.
Deductible:
A deductible is the amount you owe for health care services each year before the insurance company begins to pay. For example, if your annual deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services that are subject to the deductible. The deductible may not apply to all services, such as when a copay only applies or preventive care services. Deductibles are useful for keeping the cost of insurance low. The amount varies by plan, with lower deductibles generally associated with higher premiums. They are fairly standard on most types of health coverage.
Out-of-pocket Maximum (OOPM):
An out-of-pocket maximum is the most you should have to pay for your health care during a year, excluding the monthly premium. It protects you from very high medical expenses. After you reach the annual out-of-pocket maximum, your health insurance or plan begins to pay 100 percent of the allowed amount for covered health care services for the rest of the year. The deductible, coinsurance, copays and prescription drug copays are included in the out-of-pocket maximum.
Annual Limit and Lifetime Limit:
In the past, health insurance carriers imposed Annual and Lifetime limits on the benefits you receive. You are no longer subject to these limitations and there is no maximum to the benefits you may receive.
Preventive Care:
Rather than waiting for a patient to become sick, preventive care aims to keep people healthy, or at least catch illnesses at their earliest and most treatable stages. Preventive care includes preventive services performed by providers, such as annual physicals or mammograms. Under the provisions of the Affordable Care Act (ACA), policies must cover various preventive services for men, women, and children without sharing the cost for these services through coinsurance, deductibles or copayments. Certain Preventive care services are subject to frequency limitations.
PPO (Preferred Provider Organization) Plan:
This plan allows you to receive care from any doctor you choose, no referral for specialty care (except United HealthCare FL), may use out-of-network doctors – but may have to pay additional fees. PPO plans typically have higher monthly premium.
POS (Point of Service) Plan:
Very similar to a PPO. The biggest difference is the contract between the insurance carrier and healthcare providers.
HMO (Health Maintenance Organization) Plan:
Must pre-select an approved Primary Care Physician, referrals are needed and for most plans, there are no out of network benefits except for qualifying emergencies. HMO plans typically have lower monthly premiums.
EPO (Exclusive Provider Organization) Plan:
Hybrid network that has limitations that vary based on the carrier. In some instances, you would need to get referrals and may not have coverage for out-of-network. These plans typically have a lower monthly premium.