Medical Insurance

Health Insurance Terms

     Plan terms and descriptions of provisions and coverages can be hard to understand when searching for health insurance. Below is a list of common health insurance coverage terms to help understand more about what their health insurance plan has to offer:

Deductible

     Deductible refers to the money that the insured would need to pay before any benefits from the health insurance policy can be used. This is usually a yearly amount so when the policy starts again, usually after a year, the deductible would be in effect again. Some services, like doctor visits, may be available without meeting the deductible first. Usually there are separate individual deductible amounts and total family deductible amounts.

Co-insurance

     This is the amount the insured must pay before the insurance pays and in addition to the deductible. Some health insurance plans will let the insured use some services with just the coinsurance payment, like visiting the doctor, even before the deductible is met.

Co-payments

     This is another term used for coinsurance.

Out-of-Pocket

This is the cost the insured would pay out of their own pocket. An out of pocket expense can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, that is referring to how much the insured would have to pay for the entire year out of their pocket, not including premiums.

Lifetime Maximum

     This is the most money the health insurance policy will pay for the entire life of the insured. Note that individual lifetime maximums and family lifetime maximums can be different.

Exclusions

     The exclusions are items and procedures the insurance policy will not cover.

Pre-existing Conditions

     This is a medical problem someone had prior to obtaining the insurance policy. Some plans will cover pre-existing conditions while others may completely exclude them and, in addition, some health insurance plans will cover pre-existing conditions after a certain time period.

Waiting Period

     This is the time the insured would have to wait until certain health insurance coverages are available.

Coordination of Benefits

     If the insured is covered by two or more sources that would cover payment for certain conditions, such being under a spouse's insurance plan along with their own, the insurance company would not pay double benefits. In this case the health insurance company would coordinate benefits to make sure each plan pays a portion of the service.

Grace Period

     This is the amount of time given by the insurance company for the insured to pay their health insurance premium after the original due date and before insurance coverage would be canceled.