Know the Insurance Lingo
Knowing your insurance policy starts with understanding the terms used to describe the parameters of coverage. Having a clear definition of terms will allow you to look at any policy and understand what it means. Let's review the terms.
In Network is the term used to designate which hospitals, doctors, pharmacies, diagnostic centers and labs have a contractual agreement on reimbursement with the insurance company.
Out of Network is the term used to designate which hospitals, doctors, pharmacies, diagnostic centers and labs that do not have a contractual relationship with the insurance company.
Deductible is the amount you pay before the insurance company starts reimbursing. Deductibles can start at $0 and go as high as $10,000.
Coinsurance is the per cent you pay for any treatments. For instance, a policy may state the insurance pays 70% and you pay 30%. It will be shown as 70%/30%. There is a difference between the in network vs the out of network ratio of cost. The out of network is a higher per cent usually 50/50. Some policies have no coinsurance.
CoPay is the amount you pay for some medical visits like primary care, specialists and sometimes hospitals and radiology. These payments can range from $10 to $50. Hospitals copay can be as high as $1,000.
Out of pocket maximum is the total amount you have to pay before the insurance pays 100% of cost. The CoPay is not included as an out of pocket expense. It is generally the coinsurance amount. Some policies include the deductible as part of the out of pocket maximum but most do not. There is a separate amount for all out of network costs. It is usually higher.
Explanation of Benefits or EOB is the insurance explanation of the reimbursement break down. It will let you know which part goes to deductible or coinsurance. You receive this after the doctor or facility send the bill to the insurance company and a reimbursement determination is made.
It is easy to confuse copay and coinsurance which are not the same. Many policies have both. It means that when you go to the doctor you pay up front with a copay. If you have a coinsurance, you will find out the amount you need to pay from the insurance EOB.
I advise clients to recheck every year their policy to make sure coinsurance or copay amounts haven't changed.
Posted by HealthCare Whisperer at 5/6/2010 6:40 PM 
Categories: insurance, deductible, coinsurance, copay
Tags: deductible coinsurance copay insurance policy
Categories: insurance, deductible, coinsurance, copay
Tags: deductible coinsurance copay insurance policy
This is a great idea. People need to be get educated and learn the lingo. I guess i could add more to it when i have time.
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