Health insurance can be confusing, especially when faced with unfamiliar terms and jargon. Understanding key terms can help you make informed decisions about your coverage, ensuring you get the best care while managing costs effectively. Below are some essential health insurance terms you should know.
A premium is the amount you pay for your health insurance policy, typically on a monthly basis. This payment keeps your insurance active, regardless of whether you use medical services.
A deductible is the amount you must pay out of pocket for medical expenses before your insurance starts covering costs. For example, if your plan has a $1,500 deductible, you’ll need to pay this amount before your insurer begins contributing to your healthcare costs.
A copayment, or copay, is a fixed amount you pay for specific healthcare services. For instance, you may have a $30 copay for a doctor’s visit or a $10 copay for prescription medications. The amount varies based on your insurance plan.
Coinsurance is the percentage of healthcare costs you are responsible for after meeting your deductible. If your coinsurance is 20%, you will pay 20% of the bill while your insurer covers the remaining 80%.
Understanding these health insurance terms can empower you to make better healthcare decisions and avoid unexpected costs. When selecting a plan, carefully review its details and consult your insurer for clarification on any unfamiliar terms. A well-informed choice can lead to better coverage and financial peace of mind.