Understanding Health Insurance Terms

health insuranceAn apple a day keeps the Doctor away!  Understanding health insurance can help keep the Doctor paid!  Health insurance can be hard to understand. The terms that health insurance companies use can confuse people. This can make it hard for anyone to pick the best insurance plan for their needs. As a result, some people don't get health insurance at all.

If this sounds like you, it might be a good idea to read on. We will go over each of these terms to help you understand them. We will then touch on optional health aids that your insurance may cover.

  • Deductible - The deductible is the set amount you pay each calendar year for any covered health services. When you pay your full deductible, your health insurance will cover the rest. Every insurance plan is different, so it's important to pay attention. For example, if your insurance has a $1,000 deductible, this is what you pay each year. Pay this amount, and your insurance will cover the rest unless you have a coinsurance.
  • Coinsurance - Coinsurance is your part of your medical costs after you've paid your deductible. You pay this coinsurance until you reach your out-of-pocket max amount. Typically, its 10% to 20%, but it can vary.
  • Out-of-Pocket Maximum - This is the most you'll pay every calendar year for your covered health care services. Say you have a $4,000 out-of-pocket maximum per year. This is the total you'll have to pay before your insurance covers everything else. It will also take your coinsurance to 0%.
  • Copay - Copays are the amount set by the insurance company. This is the amount that you pay upfront for certain medical services or medications. Clinic visits, outpatient therapy, medications, and office visits are good examples.
  • Premium - An insurance premium is an amount you pay each month to have health insurance. Some cost nothing, but you have to meet income limits. Other insurances have higher premiums. These can increase by the number of people on a single insurance policy.

So, if you have a $5,000 medical bill and your insurance has a $1,000 deductible and a 20% coinsurance, you'd owe $1,800.

Amount Billed$5,000
Deductible$1,000
Remaining Amount ($5,000 - $1,000)$4,000
Coinsurance20%
Coinsurance Owed ($4,000 x 0.20)$800
Total Amount Owed (Deductible + Coinsurance)$1,800

What Is a Covered and Non-Covered Service?

Covered Services - Covered services are things your insurance decides you need to have to stay healthy and safe. Your insurance will cover part or all of the costs for these services. Covered services usually include emergency room visits, clinic visits, chemotherapy, and medications.

Non-Covered Services - Non-covered services are things your insurance won't pay for. If you have them anyway, you'll pay the full cost for it. These costs won't count toward your insurance's deductible. Botox, plastic surgery, and trial medicines are all good examples of non-covered services.

Will Health Insurance Cover Medical Devices?

health insuranceEvery insurance company is different with the things that they consider to be necessary to your health. However, some providers are starting to accept more health aids because they improve people's quality of life. For example, some insurance plans now accept health ancillaries like Medical ID bracelets.

Mediband is another service that some insurance companies now offer coverage for. Medibands can help improve a patient's quality of life. Many times, you can get Mediband or medical ancillaries like a medical ID bracelet at little or no cost.

If you're not sure, don't be afraid to call your insurance company. They'll be able to tell you if you have a deductible, coinsurance, copay, or an out-of-pocket max. They'll also be able to tell you if they cover ancillary devices like Mediband or medical ID bracelets. If they do, they can direct you to someone who sells them. If they don't, they may consider adding it to your plan if you request it.

Should you still have any issues with your private health insurance provider that cannot be resolved, contact your local Private Health Insurance Ombudsman.  Your ombudsman can help you find a solution that works.

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