Health Insurance Terms We All Pretend To Understand
Have you ever had someone explain the benefits and conditions of a health insurance plan to you before, and wanted to stop them so they could explain one confusing term, but before you had the chance, they’d already said five other words you didn’t know? At that point, you know that you just need to make a mental note of the things they said and look them up in a dictionary later or else this conversation will never end. This is a pretty common experience and that’s a shame because understanding the jargon in your health insurance plan is rather important. We’re here to help, and nobody even has to know that you ever needed our help. Here are health insurance terms we’re all just pretending to understand.
If your claims adjustor ever tells you he won’t pay out your claim because you’re still in your accumulation period, all he means is that you haven’t yet met your deductible. If you’re still in your accumulation period, even claims that would normally be covered by your insurance won’t yet be covered until you meet your deductible.
When we think of brokers, we often think of the stock market, but there are brokers in the health insurance game, too. They work to match you with the best plan for your needs. They represent you, and not any particular health insurance company. But they are paid commission by the health insurance company you go with.
Cost-sharing describes any charges you’re responsible for, that are a portion of a larger payment that your insurance company will pay for. These include things like your deductible, your appointment co-pay, and your prescription co-pay.
An in-network provider can refer to a hospital, specialist, general physician, pharmacy, or any other healthcare professional that is within your health insurance plan. You will pay less at these providers than those out-of-network because these professionals have negotiated a discounted rate with your insurance company, in exchange for the company directing patients their way.
Medicaid vs Medicare
Medicaid is designed for low-income individuals who cannot afford most commercial plans. It is funded by the government. Medicare is for individuals 65 or older, as well as certain disabled individuals under the age of 65.
This refers to the most money you will have to pay for medical expenses in a given year. This includes co-pays, deductibles, and your regular premium. After reaching your maximum, your health insurance company will pay all other expenses for the rest of the year.
This is any condition for which you were diagnosed prior to buying your health insurance plan. Each state has its own rule that states how long ago a person must have recovered from the condition in order for it to not affect their premium or benefits.
Rider is the term for expanded coverage options. Many health insurance companies allow you to pay a slightly higher premium to add a rider, such as maternity benefits.
A waiting period can refer to two things: 1) the amount of time an employer makes an employee wait before adding him to the company health care plan and 2) the amount of time a health insurance company may wait after your diagnosis of a pre-existing condition to allow benefits to cover services related to that condition.
You may have seen in some plans that the company will pay 80 or 90 percent of your health care costs after you’ve met your deductible. This is the co-insurance. If your plan offers 10 percent co-insurance, then the company will pay for 90 percent of your bills after your deductible.
Preventive care refers to any sort of service that aims to prevent health issues, rather than treat existing ones. Some examples of preventive care include checkups, screening tests, and vaccinations.
Traditional insurance plan
A traditional insurance plan will call for higher premiums but very low or zero deductibles. These plans are advisable for individuals with a lot of health issues who will call upon their insurance often. They’ll get the most “bang for their buck.”
High deductible health plan
A high deductible health plan is the opposite of a traditional one. This type of plan (often called a HDHP) will involve lower monthly premiums, but higher deductibles. These are advisable for healthy individuals who probably will not meet their deductible (i.e. will not require much medical attention).
Do you ever wonder why your co-pay for a specialist visit costs more than that for your general physician? Specialists have received more training than general physicians in specific areas of health. They are highly knowledgeable about specific groups of symptoms and conditions.
Qualifying life event
A qualifying life event refers to a major life change such as losing your work-related health care plan, getting married, or having a child, that makes you eligible for special enrollment periods. In other words, if one such event takes place, you can enroll for a new plan outside of the yearly open enrollment period.