Since the Affordable Care Act (ACA or ObamaCare) went into effect, the uninsured rate in the United States has reached record lows. But, there is still great confusion when it comes to health insurance information. Many Americans can’t even define basic health insurance terminology if prompted. A recent study in the state of Texas found:
- 25% of respondents, regardless of insurance status, lack confidence in understanding basic health insurance terms like “deductible,” “premium,” and “copayment”
- 40% of respondents with an individual plan expressed lack of confidence in understanding “co-insurance” and “maximum out-of-pocket expenses”
- More than 33% of respondents with an individual plan said they were confused by what counts toward a deductible and what health services were covered under their plan
We get it – health insurance terminology is tricky, but understanding the language will bring you one step closer to better managing your health and maximizing your insurance plan. To help, FamilyWize has compiled a list of the top 10 terms you need to know when it comes to health insurance. Bookmark this post for future use, and be sure to share it with family and friends!
People and Organizations Involved in Your Plan
- Dependent: Any individual, either spouse or child, that is covered by the primary insured member’s plan.
- Network: The group of doctors, hospitals, and other healthcare providers that insurance companies contract with to provide services at discounted rates. You will generally pay less for services received from providers in your network. You can usually check which providers are in your network on your insurance company’s website or by calling. You can also call your provider and ask!
Fees and Costs Associated with Your Plan
- Co-pay: The flat fee you pay for certain medical expenses. Example: You pay a fee of $10 for every doctor visit, but then the insurance company pays the rest.
- Coinsurance: Your share of the costs of a covered healthcare service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You generally pay coinsurance in addition to any deductibles you owe. (For example, if your plan’s allowed amount for an office visit is $100, and you’ve met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.)
- Deductible: The dollar amount (example: $1,000) you pay each year, after which insurance protection begins. You pay expenses up to the deductible amount and then the insurance company pays the remainder, up to the policy limit (Example: $50,000). Some plans pay for certain healthcare services before you’ve met your deductible.
- Premium: The payment you provide to the insurance company in exchange for insurance coverage. In some cases, your employer may cover this expense (or part of it).
- Maximum Out-of-Pocket Expenses: The most money you will pay during a year for coverage. This includes deductibles, co-pays, and coinsurance, but is in addition to your regular premiums. Beyond this amount, the insurance company will pay all expenses for the remainder of the year.
- Cost for Choosing Out-of-Network Services: A doctor, hospital or pharmacy that is not part of your health plan's network of preferred providers. You will generally pay more for services received from out-of-network providers.
Affordable Care Act
- Affordable Care Act (ACA; ObamaCare): Signed into law by President Barack Obama on March 23, 2010, the ACA was enacted to increase the quality and affordability of health insurance, lower the amount of uninsured individuals by expanding public and private insurance coverage, and reduce the costs of healthcare for individuals and for the government.
- Preventive Care Services: Services like vaccinations and other key screenings that are required by the Affordable Care Act (ACA) and are offered at no cost to you through private insurance plans.
FamilyWize is here to help you better navigate the complicated and ever-changing healthcare marketplace. Our free prescription discount card is available for everyone to use – whether you are insured, underinsured or uninsured. Remember to always carry the card with you (or download our free app), and present it to the pharmacist each time, to ensure you receive the lowest price possible on your medications.