Health Insurance Jargon You Need to Know
The health care system can be intimidating. Words like deductibles, out-of-pocket, and premiums can sound like a foreign language. Below, we’ve crafted a blog that explains exactly what words you need to know when navigating the health insurance market.
What are premiums, deductibles, coinsurance and copays?
These insurance terms refer to different kinds of payments that consumers are responsible for. The amount you’ll pay varies from plan to plan: For instance, higher premiums often mean lower deductibles.
PREMIUM
The price of an insurance policy, typically charged annually or semiannually
DEDUCTIBLE
The amount of loss paid by the policyholder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage.
COINSURANCE
In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20 percent health insurance coinsurance clause, the policyholder pays for the deductible plus 20 percent of his covered losses. After paying 80 percent of losses up to a specified ceiling, the insurer starts paying 100 percent of losses.
COPAYS
A payment made by a beneficiary (especially for health services) in addition to that made by an insurer.
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