Health Insurance Terms You Need to Know
Health insurance is a very important aspect of preventive healthcare. It helps us get the care we need and provides various wellness benefits along the way. However, learning the basics of health insurance is crucial to finding the plan that is the best fit for you. If you are new to health insurance or just want to brush up on the basics, here are some important terms and definitions to keep a good grasp on:
A premium is how much you have to pay your health plan in exchange for coverage. If you get coverage through your employer, this is taken out of your paycheck automatically and they may pay some of the cost.
The amount you have to pay for certain medical services and supplies before your health plan pays benefits for them.
The set amount you have to pay for a covered service. Your copay will depend on your plan and the service you receive.
Your share of the cost for a service, usually calculated as a percentage of the allowed amount for the service. You typically pay a coinsurance only after you finish paying your deductible.
This is the maximum payment your health plan will pay for a covered healthcare service.
Sometimes referred to as a ‘cost share,’ this is an amount you owe for a covered service. Deductibles, copays and coinsurance are examples of out-of-pocket costs.
The out-of-pocket maximum is the most you will pay out-of-pocket for covered services that you receive. When you reach the out-of-pocket maximum for covered services, you no longer have to pay associated cost sharing amounts for the rest of the coverage period.
A person who is covered or eligible to be covered under the contract holder’s health plan.
If you are curious about understanding the basics of health insurance, watch our Blue HowTo Health Insurance 101 video to learn more about important health insurance terms.