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Understanding Health Care Plan Policy Terms

Billy Amon

Posted Mar. 11, 2008
Tagged: Health, HealthInsurance, HealthTips, healthcare

Whether shopping around for a new health care plan or trying to determine the benefits associated with your current plan, you'll want to understand a number of terms.

Coinsurance: The amount of a claim you are required to pay. This is usually stated as a percentage. Your health insurance company will pay the rest (for covered medical expenses).

Copay: A set fee you will pay for a specified service. For example, many plans have established copays for office visits and prescription drugs.

Deductible: The amount you are required to pay each year before your health insurance company starts paying for claims. You can usually save money on your premium by choosing a plan with a high deductible; however, make sure you can afford to pay the deductible.

Lifetime maximum: This is the most your health insurance company will pay toward your covered medical expenses throughout your lifetime. Tip: Look for a plan that offers a high lifetime maximum ($2-3 million).

Office visit: The amount you are required to pay for an office visit. If a percentage is stated, you’ll pay that much of the total claim and your health insurance company will pay the rest. Note: Some plans waive the deductible on the first few visits. This means that you will not have to satisfy your deductible before your health insurance company pays for office visits. In other words, you'll pay only the stated fee or percentage, rather than paying 100% if your deductible has not yet been met.

Out-of-pocket limit/maximum: This is the maximum amount of money you'll spend on covered medical costs each year. If you hit this amount, your health insurance company will fully cover the rest of your (covered) medical expenses. Note: Sometimes the out-of-pocket limit includes the deductible and sometimes it doesn't. This varies by plan so be sure to check.

Premium: This is the monthly fee you will pay in order to keep your health care plan.

What do you find confusing about health care plans? Do you have any tips to share?

I have personally seen the high costs and inner workings of the health care system. My best friend was in a coma for 12 days and had brain surgery. My mom battled leukemia for 10 months and passed away in February of 2007. I know firsthand that our health care system is in dire need of change and am personally dedicated to working to bring about that change.

I am the Online Community Manager for Trusera. Previously, I was the content manager for the Qvisory Health blog. I live with my wife, dog, and two cats in Seattle, WA. See Billy Amon's other posts and profile.

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