Medical insurance terminology can be complex and confusing. By getting a handle on the basic terms, you give yourself a huge advantage when wading through the details of your plan.
Like any other specialized industry, the medical insurance industry is full of specific terms and jargon. Medical insurance policies can be complex, and fully understanding what kinds of benefits you get from your policy can be a bit of a challenge. Further complicating the matter is the fact that each company that offers medical insurance does things a little bit different.
Still, there are things you can do as a consumer to make sure you’re getting your money’s worth. To make full use of your medical insurance policy, there are some specific terms you need to familiarize yourself with.
Getting a handle on these few relatively basic terms can give you an advantage when wading through the waters of your insurance policy:
Cap. Most policies have a maximum dollar amount that the company will pay. This limit may be on certain kinds of medical issues, or it might be a limit on how much the company will pay out in a given year.
Claim. Amedical insurance claim is, more or less, a statement from your health care provider to the insurance company asking for payment. This may also be called a “claim form.” The form may be a physical, paper form sent to the insurance company, or it may be an electronic form. In some cases, you’ll have to file the claim on your own, but in other cases the health care provider may work directly with the insurance company to file your claim.
Co-pay. Most medical insurance policies will require you to make a co-pay. A co-pay is a set amount of money that you pay out of your own pocket for certain medical services. The co-pay can vary from one service to another. It may range from a few dollars for a basic office visit to a larger sum for more complex services.
Deductible. Many medical insurance plans don’t kick in right away. There is a set amount that you need to pay out of pocket toward your expense before the insurance company begins to cover you. This is known as a “deductible” and may apply to a specific procedure or to a calendar year.
Exclusion. Some conditions are not covered by medical insurance. These conditions are known as “exclusions” and your policy will often state directly what these are.
Network. Some medical insurance plans rely on a network of health care providers that are willing to perform services for specific reduced fees. The health care providers that participate in this arrangement are often referred to as being “in-network” while health care providers who don’t participate are “out-of-network.” Your co-pay for out-of-network services will usually be higher than if you were to get the service in-network.
Premium. As with other types of insurance, the premium is the amount you pay for your medical insurance. Your premium may be billed monthly, or it may take the form of a yearly amount.