We understand that getting health insurance can be a confusing and stressful thing to do. But, we all need it. Even if you consider yourself healthy and active, it’s a good idea to get coverage in case of any emergencies. This article is meant to give you some guidance regarding some of the health insurance terms you’ll encounter as you shop around. This list does not include all the health insurance terms, but it does include the most common ones.
Agent or Broker
A health insurance agent or broker is a person who is licensed in your state to sell health insurance. When looking for an agent or broker, make sure this person fully understands health insurance. Insurance has different branches. An agent who specializes in life insurance cannot necessarily advise you on a health insurance plan properly. To find an agent, make sure you ask for recommendations from your family or friends. And when you speak with a potential agent, make sure you ask about his or her qualifications.
Some agents are licensed to sell health insurance coverage from a variety of insurers. Some agents work for just one specific health insurer and would only be able to advise you on that insurer’s plans. If you don’t know an agent or broker who can help you, 1800health.com can provide you with a knowledgeable and licensed person who can provide you with guidance.
Certain types of health care services have fixed amounts that you pay. For example, when you visit your primary care doctor, your copayment could be $15 and when you visit your specialist, your copayment could be $25. Your copayment is normally due at the time of the visit. You pay this directly to the office you’re visiting.
Other types of health care services may require coinsurance. For example, let’s say you’re going to have an outpatient surgery that costs $2000 and your coinsurance is 20%. What you would have to pay in this scenario is $400.
A deductible is the amount you need to pay before the insurance company starts paying its share. For example, let’s say your deductible is $1000. You first have to pay the full $1000 before the health insurance company starts paying its share of costs. Remember, deductibles are usually annual. So each year you begin fresh and have to cover the deductible for the year.
Essential Health Benefits
Since the passage of the Affordable Care Act, health insurance companies are required to offer minimum insurance coverages. These minimums are also known as essential health benefits.
Essential health benefits include coverage for:
- ambulatory patient services
- chronic disease management
- emergency services
- laboratory services
- maternity and newborn care
- mental health and substance use disorder services, including behavioral health treatment
- prescription drugs
- preventive and wellness services
- pediatric services, including oral and vision care
- rehabilitative and habilitative services and devices
Additionally, Medicaid services offered by the state must also offer these benefits to people who are newly eligible for Medicaid programs. Additional information on essential health benefits can be found at HealthCare.gov
HMO (Health Maintenance Organization)
If you choose an HMO, you’ll most likely have a plan that is focused on providing preventative care and wellness services to its members. HMO’s work through your primary care physician (see explanation below). This means that once you sign up with an HMO health insurance plan you’ll also have the opportunity to select the primary care doctor of your choice. Once you do that, the majority of healthcare services would need to go through your primary care doctor’s office. This means that things like labs or visits to medical specialists have to be coordinated by your primary care doctor and also go through your assigned network (see explanation below).
A medical network consists of all the suppliers, providers and facilities that your doctor and your health insurance plan are contracted with. All your healthcare, except in case of emergencies, must go through that network. If you get care or supplies outside of the network, your health plan may not cover all or even any of the costs you are charged. Always make sure you are visiting facilities, providers and suppliers that are within your network.
This is the most you will have to pay per year. It includes what you pay in deductibles, copayments and coinsurance. However, it does not include your monthly premiums.
PPO (Preferred Provider Organization)
This type of health plan has more flexibility. If you choose a PPO health insurance plan you’ll be able to choose and visit any in-network or out-of-network care provider. Understand, however, that if you choose out-of-network care services, you’ll be paying higher out-of-pocket costs.
This is the fixed amount you pay either monthly, quarterly or yearly. This is the cost of your plan.
Primary Care Physician
Your primary care physician is the first doctor you would contact in case of illness or for regular care. Your primary care physician evaluates you and may also send you to other care providers or specialists as needed.