Health Insurance: Talk the Talk

When you begin looking for a health care plan, you will in doubt have to analyze the costs and benefits of each type of coverage. But how can you do this unless you fully understand all the terms?

If you have ever had insurance, whether for a car or anything else, you probably recognize the words “premium” and “deductible.” But let’s take a look at what this means for health care insurance specifically. Here’s a guide to what all that health insurance jargon means!

Every health care plan will have a basic monthly premium. This is the general price for your health insurance policy. If you get health care through an employer, you won’t have to pay for all of it. In fact, you may not have to deal with the premium at all. This is why the premium may not be much of a concern when you judge the ultimate price of your policy.

As you might expect, the costs of your plan hardly stop there. When you actually seek medical care, you will have to deal with either a deductible or a copayment or both. A deductible is a set amount of money that you have to pay – it may be a yearly payment – and your insurer will only start taking care of medical bills until you’ve reached that deductible. A copayment means that your insurer only pays for a certain percentage of your medical bills, while you pay the rest – the copayment. The copayment, or coinsurance, you pay, may be as little as 5% or as much as 20% of what is owed. It depends on your plan.

However, there is a stipulation called “out-of-pocket” maximum. This means that if you end up paying a certain amount of money – in copayments, etc – the insurer will take over and completely relieve you of any financial burden from then on. They can do this for a year or sometimes even longer.

When you’re examining the different health care plans available, it’s important to pay attention to every little detail. This means you want to keep a keen eye on the fine print and know what your policy’s exclusions are. There are lots of benefits you can get coverage for, but most plans do not cover everything. Know what your personal health care needs are before you sign up for a plan. Make sure you’re getting all the benefits you want. Do you only want to be insured for immediately necessary medical care or would you like your doctor check-ups to be (at least partially) paid for as well? This will depend on your budget and personal health.

This is the basic vocabulary – premiums, deductibles, exclusions, etc – that you must decipher in order to properly understand the many different options for a health care plan. Every single plan, whether it is an HMO or an indemnity plan, has all of these things in common – the differences lie in the details.

So, now that you’ve got some terms in your head, you’re ready to go shopping!