Health Insurance Terms

Co-insurance - The amount a patient is required to pay for medical care after meeting the deductible.  This is usually a percentage. Example- The patient may have to pay 20% and the insurance company would pay 80%.

Coordination of Benefits - A system to eliminate duplication of benefits when you are covered under more than one group plan.  Benefits under the two plans usually are limited to no more than 100% of the claim.

Co-payment - A flat fee paid by the patient every time they receive a medical service.  Example-  The patient pays $20 and the insurance company pays for the rest of the visit.

Covered Expenses - The medical procedures that the insurer agrees to pay for.  Example-  Some may not pay for medications, mental health care, elective surgeries, etc.

Deductible - The amount of money the patient must pay each year to cover medical care expenses before the insurance policy starts paying.

Exclusions - Specific conditions or circumstances for which the policy will not provide benefits.

Managed care - Ways to manage costs, use, and quality of the health care system.  All HMOs, PPOs and many fee-for-service plans have managed care.

Maximum Out-of-Pocket - The most money required to pay a year for deductibles and coinsurance.  It is a stated dollar amount set by the insurance company, in addition to regular premiums.

Non-cancelable policy/ Guaranteed renewable policy - A policy that guarantees insurance as long as the premium is paid.

Preexisting conditions - A health problem that existed before the date that the insurance became effective.

Premium - The amount paid for insurance coverage by the patient, employer, or both.

Third- Party Payer - Any payer for health care services other than the patient.  This can be an insurance company, an HMO, a PPO, or the Federal Government.