Health insurance can be a confusing topic, with many technical terms and jargon that can be difficult to understand. In this article, we will cover five basic health insurance terms to help you better understand your coverage.
1. Premium: A premium is the amount of money you pay each month to your insurance company for your coverage. It is important to pay your premium on time to ensure that your coverage stays active.
2. Deductible: A deductible is the amount of money you must pay out of pocket for your healthcare expenses before your insurance coverage kicks in. For example, if you have a $1,000 deductible and you incur $1,500 in medical expenses, you will need to pay the first $1,000 before your insurance will cover the remaining $500.
3. Copayment: A copayment, or copay, is a fixed amount you pay for certain medical services, such as a visit to your primary care physician or a specialist. Copays are typically lower than the cost of the service itself, and the amount of the copay varies depending on your insurance plan.
4. Coinsurance: Coinsurance is a percentage of the cost of a medical service that you are responsible for paying after your deductible has been met. For example, if you have a coinsurance rate of 20% for a $1,000 medical service and you have already met your $1,000 deductible, you will be responsible for paying 20% of the remaining cost, or $200.
5. Out-of-pocket maximum: An out-of-pocket maximum is the most you will have to pay for covered healthcare expenses during a plan year. This includes your deductible, copayments, and coinsurance. Once you reach your out-of-pocket maximum, your insurance will cover all remaining costs for covered services.
Understanding these basic health insurance terms can help you make informed decisions about your healthcare coverage. Be sure to carefully review your policy and ask questions if you are unsure about any of the terms or coverage details. You can get more information about individual plans here.
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