Health insurance is a way to pay for medical care when you need it. Just like car insurance or home insurance, you pay a fee each month to your health insurance company.
When you get sick or hurt and need to see a doctor or go to the hospital, your health insurance will help pay for some or all of the cost.
Here are some important health insurance terms to understand:
- Insurance deductible: This is the amount of money you have to pay before your insurance starts paying for your medical expenses.
- Out of pocket maximum: This is the most money you will have to pay for medical expenses in a year. Once you reach this amount, your insurance will pay for everything else.
- Copayment: This is a fixed amount of money you pay each time you see a doctor or get a prescription filled.
- Coinsurance: This is a percentage of the cost of medical care that you pay. Your insurance will pay the rest.
- In-network providers are doctors, hospitals, and other medical facilities that have agreed to work with your insurance company.
- Out-of-network providers have not agreed to work with your insurance company, so you may have to pay more to see them.
- Insurance pharmacy formulary: This is a list of medications that your insurance company covers.
- Preventive care: This is medical care that helps keep you healthy, like vaccines, check-ups, and cancer screenings.
Each insurance plan has different levels/percentages of coverage and each insurance company offers different provider networks and pharmacy formulary. These can also vary by plan type.
The best plan for you will meet your financial needs for the level of medical care you expect you will need, and include your doctors and medications.
In Addition, There are Different Type of Plans:
- HSA: Health Savings Account, which is a type of savings account you can use to pay for medical expenses. You can put pre-tax money into the account and use it to pay for qualified medical expenses.
- HMO: Health Maintenance Organization, which is a type of insurance plan that requires you to choose a primary care doctor who coordinates all of your medical care.
- PPO: Preferred Provider Organization, which is a type of insurance plan that allows you to see any doctor you want, but you'll pay less if you see doctors who are in your insurance company's network.
- EPO: Exclusive Provider Organization, which is a type of insurance plan that is a mix between HMO and PPO. You have to choose doctors within the network, but you don't need a primary care doctor and you don't need a referral to see a specialist.
