The insurance industry has a language all its own filled with cryptic phrases and dense language. But you don’t need to be a rocket scientist to understand health insurance plans. What you need is some basic vocabulary and a way to quickly determine whether a plan is right for you.
First, the vocabulary:
- Copay: Flat fee you pay for medical care at the time of service. (Ex: $50 for a doctor’s office visit).
- Coinsurance: You and the insurance company share a percentage of the cost of select medical services. (Ex: your bill for an MRI is $1000. With an 80/20% plan, your insurance company pays $800, and you pay $200).
- Deductible: Amount you must pay for select (or all) medical services on an annual basis, before the insurance company chips in. Deductibles reset once annually (either on a calendar year or policy year).
- In-network: A group of doctors, hospitals, and medical facilities an insurance company has contracted with to provide medical services to individuals enrolled in their plans.
- Out-of-network: A medical doctor, hospital, or facility that is not a preferred provider of medical services under your healthcare plan. You pay more if you go out-of-network.
- Out-of-pocket max: The maximum amount you are responsible to pay for your healthcare expenses in a year (from your own pocket), not including premiums. Typically, the out-of-pocket max is the plan deductible + any coinsurance amount.
Second, the summary of benefits:
This is typically a one page chart that summarizes the main benefits a plan provides and, now that you know your basic vocabulary, it can be decoded with relatively little effort in order to better compare plans or determine if your current plan is the right fit for you. It's a great tool to quickly get a sense for the coverage being offered.
Okay, I know my basic terms. Show me what plans are out there! Understand Your Options
Nice summary, but I'm already a health insurance vocabulary ninja. Any thoughts on finding the right plan for me? Absolutely! 5 Tips for Shopping