Health Insurance Literacy
Health insurance has its own language. Health insurance policies vary in their purchase price and in the percentage they'll pay of the costs of services you use throughout the year. Understanding how your health insurance works is your responsibility. It's your framework to help you manage choices and costs. To help you start, we've tried to introduce some terminology.
To have it:
- Premium: Your membership fee. It’s what you pay to be covered by your health insurance.
To use it:
- Coinsurance: Your split of the bill. It’s a percentage you pay of the covered service cost. The remaining percent is paid by your health insurance.
- Copay: Your utilization per visit fee. It’s a flat fee you pay each time you use a service.
- Deductible: Your full price hurdle. In a policy year, you pay the full cost of some benefits until you meet this specified dollar amount. Then—and only then—will insurance pay its share.
- Out-of-pocket maximum: Your financial burden ceiling. It’s the most you’ll have to pay each policy year for covered services.
- Network: For many health plans, you pay less for care when you use “in network” providers—doctors and facilities affiliated with an insurance company. If you use a provider outside the network, you’ll typically pay much more in copays, coinsurance and deductible costs.