Understanding Healthcare Coverage 101
Health Insurance: What is it and what does it cover?
Health insurance covers your medical expenses if you become sick or injured, it also provides coverage for routine physicals and health maintenance. It's important to note that many policies do not cover these expenses at 100% but share these costs with you until you've reached a set amount for the calendar year.
Premium: This is what you pay to your health insurance carrier to keep your coverage. These are due at times set in place by the plan. If you have an employer provided health plan, this amount may be automatically deducted from your paycheck.
Benefit Period: The time period that services are covered under your plan. This also defines the time period that benefit maximums build up. It has a begin date and an end date, typically within the calendar year beginning January 1st and ending December 31st.
In-Network Provider: This means that your Health Insurance Plan has a contract with this provider.
Out- of- Network Provider: By contrast this means that the Health Insurance Plan does not have a contract with this provider. (This can result in higher prices and more out of pocket costs)
Covered Service: A healthcare provider’s service or supplies covered by your health plan.
Allowed Amount: The highest amount a plan will pay for a covered service. This can also be called a negotiated rate, plan allowance, or eligible expense. (While a providers office may bill $250 for an office visit the allowed amount is less. Health insurance companies negotiate these rates with their in-network providers)
Deductible: The amount you pay for your healthcare expenses before your health insurance pays.
Co-Payments:The amount you pay for covered services at the time of the visit.
Coinsurance: A percentage you must pay for your healthcare services AFTER you have met your deductible. (For example: your insurance may pay 90% of your costs, but you are responsible for the 10%- until you've hit your out of pocket maximum for that benefit period)
Out of Pocket Maximum/Limit: This is a set amount, it's the most you will have to pay for covered services within your benefit period. After you have paid this amount on deductibles, co-insurances, and co-payments your health plan will pay the remaining covered services for that benefit period at 100%.