With words like co-pay, premium, and deductible, wading through the sea of health insurance terms can be overwhelming. Before you tackle choosing a health insurance plan or deciding if a health savings account is right for you, its helpful to understand the words that youll encounter in the paperwork.
Below youll find a list of basic health insurance terms along with their definitions and the most important points to know about each.
o Provider - Anyone in the healthcare industry who provides a healthcare service to you, including doctors, hospitals, laboratories, x-ray centers, surgery centers, and pharmacies
o Premium - The amount of money you will pay each month to purchase a health insurance plan. In many cases your employer will pay a portion of the premium and you will pay the remainder. Most plans with family coverage in 2006 have a premium cost of more than $10,000 a year. Premiums vary by the amount of your deductible (see below for definition of deductible).
o In-Network and Out-of-Network Providers - Health insurance companies negotiate with doctors and hospitals to provide services to the people they insure. The doctors and hospitals they contract with are referred to as in-network providers because they have agreed to provide services to you at a discounted rate, while out-of-network doctors and hospitals do not provide services to insured patients at a discounted price. If your doctor is out-of-network, youll pay more for services than if you visit an in-network doctor. Your health insurance company can provide a list of doctors and hospitals that are in-network, and a doctor or hospital can tell you whether they are in-network for a particular insurance plan.
o First Dollar or Out of Pocket - The amount of money you pay from your own funds before your insurance company pays for any medical costs. This term generally applies to the sum of your co-pay, deductible and any co-insurance you are directly billed for when you receive a medical service.