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Health Insurance Terms

Health insurance plan terms or descriptions of coverage and provisions can be hard to understand. Many people could not help but ask what it means when searching for a health insurance plan or after one has already signed up.

Below is a list of commonly used health insurance coverage terms and their definitions to help one understand further about what their health insurance plan has to offer:

Deductible - The deductible refers to the amount of money that the insured would be required to pay before any benefit from the health insurance policy can be utilized. This is more often than not an annual amount paid. So when the policy begins again, usually after a year, the deductible would be also in effect. A number of services may be offered without meeting the deductible first such as doctor visits. Generally there are total family deductible amounts and separate individual deductible amounts. Usually, higher deductibles would mean lower the premiums.

Coinsurance - This is the amount that must have to be paid by the insured, in addition to the deductible, before the insurance pays. A number of health insurance plans will let the insured make use of some services with just the coinsurance payment such as visiting the doctor, even before the deductible is met.

Co-payments - This is a similar term used in place of coinsurance.

Copay - A predetermined dollar amount you have to pay at the time services are delivered. Typical copays are for hospitalizations, office visits or prescriptions.

Out-of-Pocket - This is the price one would pay out of their own pocket. Out of pocket expense may refer to how much the coinsurance, co-payment or deductible is. Moreover, when the phrase annual out-of-pocket maximum is used, it is referring to how much the insured is supposed to pay for the entire year out of their pocket, excluding premiums.

Lifetime Maximum - This is the largest amount of money the health insurance policy will have pay for the entire life. Focus your attention to individual lifetime maximums and family lifetime maximums, as they can be different, and can mean huge differences when comparing health insurance quotes.

Exclusions - These are things not covered by the insurance policy.

Pre-existing Conditions - An illness or disease someone had before acquiring the insurance policy. Some plans will cover pre-existing conditions while others may not. Additionally some health insurance plans will cover pre-existing conditions after a certain time period. Pregnancy is not measured a pre-existing condition.

Waiting Period - This is the length of time one has to wait until certain insurance coverage are available.

Coordination of Benefits - The insurance company would not pay double benefits if the insured has other available sources that would cover payment for certain conditions, like being under a spouse's insurance plan along with their own. The health insurance company would manage benefits to ensure each plan pays a portion of the service.

Grace Period - This is the length of time one needs to pay their insurance premium after the due date and before coverage would be disregarded.

Premiums - The amount paid monthly or quarterly for health insurance.