Here are explanations of some key health insurance words that you may hear. Other key words are explained through this book.
A Network is the collection of facilities, providers, and suppliers your health insurer has contracted with to provide health care services.
- Contact your insurance company to find out which providers are “in-network.” These providers may also be called “preferred providers” or “participating providers.”
- It may cost you more to see a provider who is “out-of-network”.
- Networks can change. Check with your provider each time you make an appointment, so you know how much you will have to pay.
A Deductible is the amount you owe for health care services covered before your health insurance or plan begins to pay.
- For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
Co-insurance is your share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You pay co-insurance plus any deductibles you owe.
- For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
A Co-payment or co-pay is an amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit, or prescription drug. A co-payment is usually a set amount, rather than a percentage.
- For example, you might pay $10 or $20 for a doctor’s visit, lab work, or prescription. Co-payments are usually between $0 and $50 depending on your insurance plan and the type of visit or service.
A Premium is the amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly, or yearly. It is not included in your deductible, your co-payment, or your co-insurance. If you don’t pay your premium, you could lose your coverage.
Out-of-pocket maximum is the most you pay during a policy period (usually one year) before your health insurance or plan starts to pay 100% for covered essential health benefits. This limit includes deductibles, co-insurance, co-payments, and any other expenditure required of an individual for a qualified medical expense. This limit does not have to include premiums or spending for non-essential health benefits.
- Explanation of Benefits (or EOB)
Explanation of Benefits is a summary of health care charges that your health plan sends you after you see a provider or get a service.
- It is not a bill. It is a record of the health care you or individuals covered on your policy received and how much your provider is charging your health plan.
- If you have to pay more for your care, your provider will send you a separate bill.
Essential Health Benefits are Outpatient Services (care given outside of a hospital); Hospitalization; Emergency Care; Maternity and Newborn Care; Mental Health; Prescription Drugs; Rehabilitative and Habilitative Care (services to help a person keep, learn, or improve skills for daily living); Laboratory Services; Pediatric Care (children’s vision and dental); & Preventive and Wellness Care.