Understanding Your Health Insurance

How many of us really understand health insurance? Have you read your health insurance policy? (Sounds fun, right?) I’m highlighting a few key terms below; you can also look at this helpful glossary to better understand your
health plan.

• Premium - the amount you pay, usually each month, for your health insurance plan.

 

• Deductible - the amount you have to pay for services before your health insurance plan begins to pay for covered services.

 

• Copayment - a fixed amount that you have to pay for a covered service. For example, it’s common to pay a set amount (e.g., $25) when you see a physician.

 

• Co-insurance - a percentage of the allowed amount billed for a covered service. For example, if the physician bills $100 for a visit and your co-insurance is 20%, you would owe $20.

 

• Network - the providers and facilities that your health insurance plan has contracted with to provide care. Usually, it is more expensive for you to receive services from an out-of-network provider than an in-network provider.

 

• Out-of-pocket limit - the maximum amount of costs you pay for covered health care services. Premiums do not count toward the out-of-pocket limit. Your deductibles, co-pays, co-insurance, out-of-network costs, and other expenses may or may not count; be sure to understand how your health plan counts out-of-pocket costs and what the maximum is. Some plans do not have an out-of-pocket limit for out-of-network services.

 

• Excluded services - services that are not covered by your health insurance plan.  
  • Medicare excludes dental, routine vision, hearing aids, long term care, and other services, although some private Medicare plans may cover some of these services. See what Medicare covers here. 
  • Private/employer plans - excluded services will vary by plan. Be sure to understand what services are and are not covered by any plan you are choosing, especially if it’s a service you think you will need (e.g., infertility treatments, long-term care, etc).

And then there are allowed amounts, balance billing, and so much more. Read the policy benefits booklet carefully. Be sure you understand what services are covered, when you need to obtain prior authorization or get a referral before seeing a specialist, and that just because your physician is in-network, it doesn’t mean that the hospital he or she may treat you at is also in-network. 

Bottom line: the more you know in advance about your health insurance plan, the better prepared you can be to obtain the care you need as well as manage your financial risk.

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