Health insurance terminology has many words and abbreviations that the average person may not understand. If an insurance representative doesn't take the time to adequately explain the meaning of these new terms, you can find yourself confused or concerned when reviewing your healthcare coverage. To ensure you know exactly what is provided in your health insurance plan, you should learn some of the common terms and abbreviations found in the insurance field.
When you sign up for health insurance some insurance providers have a waiting period for specific procedures or health services. This waiting period is the number of days, weeks or months that you must wait from the time your insurance starts until these procedures are covered by your insurance provider. Most insurance companies have a waiting period of nine months or one year for services such as pregnancy or treatment of tumors.
Co-insurance is the percentage an insurance provider pays for medical services after you have met your deductible. Generally co-insurance is either 50/50 or 80/20. The latter forces the insurance company to pay 80 percent of healthcare expenses while you pay 20 percent while the 50/50 split makes the amount you and the insurance company pay the same. The co-insurance rates are in place until you reach your maximum amount for a benefit period, which is generally between $1,000 and $5,000. At that point the insurance provider covers 100 percent of expenses and healthcare services, and you are required to pay only for services not covered under your health insurance plan.
A contract or approved provider is a doctor, dentist, specialist or other healthcare provider who has been approved by the health insurance company. This means that the services provided by this healthcare professional can be billed to your insurance company and covered by your health insurance plan. If you go to a provider who is not contracted or approved by your health insurance company, they can refuse to pay any of the costs associated with the office visit or treatment since you didn't use their providers or seek their approval first.
Insurance companies often charge co-pays on doctor's visits and other office visits where healthcare services are performed. This co-pay must be paid each time you seek out the service regardless of whether or not you've met your deductible or your maximum amount for co-insurance during the benefit period. For example, a co-pay for a doctor's office may be $25 which means each time you or anyone on your plan goes to the doctor's office you must pay $25 even if the insurance company is going to pick up the remainder of the cost of the visit and the services. Most health insurance companies limit the number of co-pay office visits for the benefit period.
This is the amount of money you must pay upfront for healthcare services before the health insurance company will start covering the expenses using the co-insurance rates. Most health insurance companies offer deductibles of $500, $1,000 or $2,000 for customers to choose from, with the lower deductible often resulting in a higher monthly premium.
Insurance companies have a benefit period which for most plans is one year. During the benefit period, the expenses associated with your healthcare services, treatments and medications accumulate. This way when your deductible amount is met, your co-insurance rates kick in and when you've reached the maximum amount for co-insurance rates the insurance company takes over paying your expenses. At the end of a year when the benefit period starts over, you are once again responsible for paying the deductible and co-insurance amounts until you have again met the maximum amount.
Your insurance company works with physicians and other medical professionals to offer lower rates for certain services. When this occurs insurance companies often make these physicians and specialists eligible providers since they can get the services at a discounted rate. Doing this encourages people with insurance under this company to go to these doctors. To have your services covered by health insurance company or count towards your deductible you have to use the services of an eligible provider or get approval in advance from your insurance company to go to someone who is not on their list of providers.
If you have children or a spouse you can obtain family health insurance coverage which pays for medical services for your immediate family. Generally family coverage results in a higher monthly premium than an individual health insurance plan, but it's often cheaper to have a family plan than an individual plan for each member of the family.
Insurance companies are not required to cover procedures that are elective or not necessary for a person's health or wellness. If you plan to have surgery or seek certain healthcare services, the insurance company may require you to prove that it is medically necessary before they will cover the expenses associated with the procedure. In most cases the insurance company will need information from your personal physician or a specialist you've been seeing who can attest to why the healthcare service is medically necessary for you and your health.
Open enrollment occurs towards the end of your benefit period. It is the time when you are allowed to make changes to your health insurance plan as well as renew or cancel it if you desire. For example, some individuals choose to raise or lower their deductible during open enrollment while others upgrade from an individual plan to family coverage due to life circumstances changing. Generally the open enrollment period occurs 30 to 60 days prior to the end of the benefit period. It's important that you understand this is your opportunity to change things, since once open enrollment closes you won't be able to make changes until open enrollment becomes available again the next year.
Any individual can get single health insurance coverage from a health insurance company. This coverage generally cost less than a family health insurance plan, but it only covers the person enrolled in the plan and identified on the health insurance identification card.