Navigating health insurance jargon can be daunting, but understanding these key terms is a significant step toward knowing about your healthcare coverage. To help you make sense of it all, we’ve put together a list of 21 key health insurance terms and their explanations.
List of 21 key health insurance terms and their explanations
Your premium is the amount you pay regularly, typically every month. This payment keeps your health or medical insurance policy active, regardless of whether you use it or not.
The deductible is the amount you must pay out of pocket for covered healthcare services before your insurance plan starts to pay. For example, if your deductible is Rs. 1,000, you’ll have to pay that amount before your medical expenses coverage begins.
- Copayment (Copay):
A copayment is a fixed amount you pay for specific covered healthcare services, such as a Rs. 20 fee for a doctor’s office visit. Copays are usually due at the time of service.
Coinsurance is the percentage of costs you share after you’ve met your deductible. For example, if your insurance plan covers 80% of a particular service, you’ll pay the remaining 20% as coinsurance.
Staying within your network can save you money because these providers have negotiated rates with your insurer. Going outside your network may result in higher costs. Health insurance plans often have a network of doctors, hospitals and other healthcare providers.
- Out-of-pocket maximum (OOPM):
The out-of-pocket maximum is the most you’ll have to pay for covered services in a policy period (usually a year). Once you reach this limit, your insurance plan will pay 100% of covered services. It includes your deductible, copays and coinsurance.
- Premium tax credit (Subsidy):
The government provides a subsidy to reduce the cost of monthly premiums for plans purchased through the health insurance marketplace. This financial assistance helps lower-income individuals and families afford health insurance.
- Preauthorization (Prior authorization):
Some insurance plans require preauthorization before they will cover specific medical procedures or services. This means you must get approval from your insurer before undergoing certain treatments or surgeries.
- Explanation of benefits (EOB):
An EOB is a document sent that explains how they processed a claim. It details what services were covered, how much your provider billed, how much your insurer paid, and what if anything, you owe.
- In-network vs. Out-of-network:
When you use in-network providers, your insurance covers a higher percentage of costs. Out-of-network providers have no such agreement, which can result in higher out-of-pocket expenses.
Medicare is a federal health insurance program primarily for people aged 65 and older. It also covers certain younger individuals with disabilities. It has different parts, including Part A (hospital insurance), Part B (medical insurance), and Part D (prescription drug coverage).
Medicaid is a joint federal and state program that provides health coverage to eligible low-income individuals and families. Eligibility and benefits vary by state.
- Open Enrollment Period:
The open enrollment period is the specific time each year when you can enroll in or make changes to your health insurance plan. Missing this period may limit your options to get coverage.
- Health Insurance Marketplace (Exchange):
The Health Insurance Marketplace is a platform where individuals and families can compare and purchase health insurance plans. It’s often used to access premium tax credits and find affordable coverage.
- Pre-existing Condition:
A pre-existing condition is a health condition or illness that you have before applying for or enrolling in a health insurance plan. The ACA prohibits insurers from denying coverage or charging higher premiums based on pre-existing conditions.
A formulary is a list of prescription drugs covered by your health insurance plan. It may categorize drugs into tiers, with different cost-sharing amounts for each tier.
- Provider Directory:
A provider directory is a list of healthcare professionals and facilities that are part of your insurance plan’s network. It helps you find in-network providers for covered services.
- Catastrophic Health Insurance:
Catastrophic health insurance is a type of plan designed for young, healthy individuals. It has low premiums but high deductibles and is intended to provide coverage mainly for severe, unexpected medical events.
- Premium Subsidy Cliff:
The premium subsidy cliff refers to the point at which your income exceeds a certain threshold, making you ineligible for premium tax credits. This can result in a significant increase in your health insurance premiums.
- Premium Assistance:
Premium assistance programs, like Medicaid expansion or CHIP (Children’s Health Insurance Program), help low-income individuals and families afford health insurance by providing financial support for premiums and other costs.
- Qualifying Life Event (QLE):
A QLE is a significant life change, such as marriage, the birth of a child, or the loss of other coverage, that allows you to enroll in or make changes to your health insurance plan outside of the regular open enrollment period.
Here are a few additional tips to help you make the most of your health insurance:
- Take the time to review your insurance policy document. It provides detailed information about what’s covered, what’s excluded and any special conditions.
- Don’t hesitate to contact kotak general insurance customer service if you have questions or need clarification about your coverage or benefits.
- When selecting a health insurance plan, consider your healthcare needs, budget and preferred healthcare providers. Be sure to review the plan’s network and coverage options.
- Maintain copies of your EOBs and all communication. These records can be helpful if you ever need to dispute a claim or track your healthcare expenses.
In conclusion, health insurance is a critical component of your financial and physical well-being, but it doesn’t have to be a source of confusion. Familiarize yourself with these key terms and being proactive in managing your coverage, you can navigate the world of health insurance more confidently and effectively. To know more visit kotak health insurance.