4 Important Health Insurance Terms to Understand

Health insurance is not as complicated as it may first appear. You can educate yourself on your insurance plan in order to better understand your benefits and reduce your costs. The first step to learning about your health coverage understands the basic terms used in your summary of benefits. 


A deductible is the amount you are expected to pay before your insurance will start covering charges. Most plans will have a per occurrence deductible and a per plan deductible. Your per occurrence deductible is how much you are expected to cover on a single claim. Over time, you will start closing in on your per plan deductible; this is the amount you are expected to cover out of pocket each year. Once you have met your per plan deductible, you will no longer have to continue with payments toward your deductible each occurrence. You can reduce your premium by raising your deductible. Depending on how much you use the doctor, this may be ultimately a money saver. 


Your copay is the amount you must pay simply to be seen by a physician. You will have a separate copay for each type of doctor you are seeing. Your copay to see a primary care physician, for example, will be different from your copay to see a specialist. You should be aware your dental coverage is totally separate, and your dental copay is not related to your medical copay. A copay is only a portion of what you are expected to cover in an office visit. If the doctor takes blood, performs a procedure or sends out for lab results, you may also have to pay a deductible on those additional charges. 

Negotiated Charge

When you check your claim statement, you will see the charge the doctor submitted. You will also see a "negotiated" or "accepted" charge. Your insurer has a deal with each doctor in your network. This deal means they can determine some costs filed by your doctor are unnecessary. They basically limit the amount your doctor can charge for any procedure. You will ultimately benefit from this, because the negotiated charge is equal to or lower than the actual charge in all cases. Your insurance company may wholly reject a charge. For example, an incidental charge like a dressing tray may be written off totally by your insurer. You should pay attention to these write offs. Your doctor may not be responsive to passing this information onto you, so you will have to notify them the charge was rejected. 

Pre-Existing Condition

A pre-existing condition is an illness you have before you sign up for an insurance plan. Some insurers will charge you more or attempt to reject your insurance application due to a pre-existing condition. The federal law, under HIPAA, helps you avoid this situation. The exclusion for a pre-existing condition may be reduced if you can provide evidence you were covered under another plan in a sufficient amount. This is a complicated law, but you should know your previous insurance company has an obligation to provide you with a certificate of prior health coverage in order to assist you in the process.




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