This glossary provides definitions for common health insurance terms.
In the context of health insurance, a premium is the amount of money that an individual or family pays to an insurance company in exchange for health insurance coverage. This payment is typically made on a monthly basis, but other arrangements may be possible. Essentially, it’s the fee you pay to keep your health insurance plan active, ensuring you have coverage when you need it.
A deductible is the amount of money you have to pay out of pocket for covered health care services before your health insurance plan begins to cover the costs. For instance, if your health insurance plan has a $1,000 deductible, you are responsible for paying the first $1,000 of your medical expenses each year. Once you’ve met your deductible, your insurance company will then start covering a portion of your healthcare costs.
A copayment, or co-pay, is a fixed amount you pay for a covered health care service after you’ve paid your deductible. This fixed amount varies depending on the type of service you receive. For example, you might have a $20 co-pay for a doctor’s visit or a $50 co-pay for a specialist appointment. Co-pays are typically paid at the time of service.
Coinsurance is the percentage of costs for covered healthcare services you pay after you’ve met your deductible. For instance, if your coinsurance is 20%, and the cost of a covered medical procedure is $1,000, you would be responsible for paying $200 (20% of $1,000), while your insurance company would cover the remaining $800. Coinsurance applies to covered medical expenses until you reach your out-of-pocket maximum for the year.
Health insurance typically covers a wide range of healthcare expenses, including but not limited to:
It’s important to note that coverage can vary significantly depending on your specific health insurance plan. Therefore, reviewing your policy documents or contacting your insurance provider is recommended to understand the details of your coverage.
