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Health insurance is important to have if you want to live a long and healthy life. It isn’t enough, however, to just have insurance. You’ll also need to have a plan that meets your current and future needs. Ideally, a health insurance plan should allow people to get the treatment that they need when ill or injured while helping them take preventative steps that will keep them in good health. In choosing a health insurance plan, it’s important that people understand some of the basic terms that are related to health coverage.
The allowed amount is the maximum amount that one’s insurance plan will pay for a covered health service. If the cost of the covered service exceeds the allowed amount, the insured is expected to pay the difference. This is also known as an eligible expense, the negotiated rate, or a payment allowance.
An appeal is a request for one’s insurance provider to reconsider a decision that it has made regarding a benefit or a claim. The Affordable Care Act governs both how consumers request a reconsideration and how insurance companies handle an initial appeal. A consumer also has the right to further appeal a decision that the insurer upholds by using a third-party decision-maker.
Balance billing is when a provider bills a patient for the amount remaining after the insurance pays the allowed amount for a covered service. If a preferred provider performed the covered service, that provider cannot use balance billing. One can only be balance billed if they receive services from a non-preferred provider.
Coinsurance is the amount the subscriber is responsible for paying after meeting the deductible. The amount the subscriber pays is a percentage of the allowed amount of a covered health service. If the deductible has not been met, the subscriber must pay 100% of the charge for the service. When the cost of the service or treatments is higher than their deductible, the patient must pay both their deductible and the coinsurance, which will be a percentage of the remaining cost.
Complications of Pregnancy
Complications of pregnancy are serious and potentially dangerous conditions that can arise at any stage of a pregnancy, including labor or delivery. These complications may occur because of health problems prior to the pregnancy or because of the pregnancy itself. Some of the complications of pregnancy include infection, gestational diabetes, and preeclampsia.
A copayment is a fixed dollar amount that is set by the health plan that the insured pays at the time of a service. Copayments may vary depending on one’s plan and the covered service.
A deductible is an amount that an insured patient must pay for covered services before the health plan will start making payments. After paying the deductible, the insured must still pay any coinsurance or copayments for covered services they receive.
Durable Medical Equipment (DME)
Medically necessary supplies and equipment that a doctor orders for daily, long-term use are called durable medical equipment. Blood sugar meters, crutches, and wheelchairs are some examples of DME.
Emergency Medical Condition
An emergency medical condition is a condition, such as an injury or illness, that puts one’s health or life in serious jeopardy. Heart attacks and brain aneurysms are examples of life-threatening emergency medical conditions. People suffering from an emergency medical condition will require treatment at an emergency medical facility.
Emergency Medical Transportation
Emergency medical transportation is transportation by ambulance to an emergency medical facility, such as a hospital, to treat an emergency medical condition. Before providing transportation, paramedics may perform necessary emergency services to stabilize the patient.
Emergency Room Care
Emergency room care refers to treatments and services that one receives in an emergency room for an emergency medical condition.
Emergency services are the evaluation and necessary treatment of emergency medical conditions to stabilize them and prevent them from worsening. Paramedics and emergency medical technicians often give emergency care to patients before and during transportation to an emergency room.
Any medical care or service that falls outside of the covered services paid for by one’s insurance plan is an excluded service. It’s important for people to review their insurance policies for exclusions. Ideally, the best time to look at exclusions is while looking for and comparing insurance policies.
A grievance is a written or oral disagreement or complaint regarding dissatisfaction with one’s insurance provider, plan, or coverage. Lack of timeliness and poor communication are examples of why someone may file a grievance against their insurance provider. Grievances are not requests for payment or services that the plan doesn’t cover.
Habilitation services are inpatient or outpatient services that teach individuals the functions and skills that are necessary for daily activity. People in need of habilitation services may be those with disabilities who are learning these skills for the first time.
Health insurance is a contract in which an insurance company agrees to pay a portion of a member’s health-care costs. In exchange, the insured pays the insurer a premium. Services that the insurance company agrees to pay or not pay for are found in the insurance policy.
Home Health Care
Home health care includes various services that are provided in one’s residence to treat illness or injury. The patient receives care from licensed professionals who are following a doctor’s plan. To receive home health care, a patient will need a referral from their physician.
Hospice services are services that provide supportive and compassionate care to individuals who are terminally ill and nearing the end of life. People who are receiving hospice services do not receive medical treatment other than medication that’s necessary to manage the symptoms associated with their illness. Besides the patient, families also benefit from the support and respite care that comes with hospice services.
Hospitalization is the admission of a patient into a hospital for inpatient medical treatment and care requiring, at minimum, an overnight stay. Inpatient hospitalization is often necessary for complex surgeries or the treatment and monitoring of serious health conditions.
In-network coinsurance is a percentage of the allowed amount that the insured pays for covered care and services by providers who contract with, and are a part of, their insurance plan’s network. Because the provider is a part of their plan’s network, patients pay less for services than they would if the provider were outside of the network.
An in-network copayment is a copayment made to service providers who are a part of the insurance plan’s network. A patient who sees an out-of-network provider for medical services will pay a greater copayment than plan members who seek care in-network.
Medically necessary refers to supplies, surgeries, and other medical services that meet the accepted standards of medicine and are necessary for diagnosing, preventing, or treating an illness, condition, injury, or disease. Most health insurance plans only cover what they consider medically necessary supplies or treatments. Elective and experimental surgeries are often not covered.
A network is a group of providers, facilities, and suppliers that an insurance company has contracted with to provide health-care services to its members. Networks benefit the consumer because they offer services at a negotiated, often lower, rate.
A non-preferred provider is any provider, service, or supplier that does not have a contract to provide services to an insurance plan’s members. Because they are non-preferred providers, their costs are more expensive for members of the insurance plan.
Out-of-network coinsurance is the coinsurance that an insured individual pays when they receive health-care services from a provider who is not in a contract with their insurance and is not a part of their plan’s network. The amount of the coinsurance that one pays is a percentage of the allowed amount for the covered health-care services.
An out-of-network copayment is a copayment that a patient pays at the time they receive covered health care from providers who are not a part of their insurance plan’s network.
An individual’s out-of-pocket limit is the maximum amount that they will pay for covered health services per policy period. Coinsurance, deductibles, and the copayments for in-network care are all part of the out-of-pocket limit, but out-of-network care and premiums are not. After the out-of-pocket limit is reached, the health insurance pays 100% of the allowed amount for covered services.
Physician services are health-care services that are provided or coordinated by a licensed medical doctor (MD) or doctor of osteopathic medicine (DO) to treat an illness or injury. A person may receive these services anywhere a licensed physician practices medicine.
A plan is a benefit provided by an entity, such as an employer, to pay for one’s health care.
A pre-authorization is a decision that one’s insurer makes to approve a service or appointment based on whether it is medically necessary. Getting pre-authorization is important, as it determines whether the insurance company will pay for the service or treatment in question. Surgeries, medicines, and even certain equipment often require pre-authorization.
A preferred provider is a health-care provider who is under contract with an insurance group or plan to provide care at a discount to members. Preferred providers may be a physician, a hospital, or a medical group. Insured individuals who use preferred providers typically pay less for copayments and coinsurance.
A premium is a payment that keeps one’s health insurance active. An insured individual will often make monthly payments for their health insurance, although some premiums may be due quarterly or annually.
Prescription Drug Coverage
Prescription drug coverage is a type of insurance coverage that helps one pay for their prescription medications. Most health insurance plans include some level of prescription drug coverage, and supplemental plans are also available.
Prescription drugs are drugs that are regulated by the Food and Drug Administration (FDA) that a patient can only get or use if they are prescribed by a doctor. Unlike with over-the-counter drugs, a person can only legally obtain prescription drugs through a pharmacy.
Primary Care Physician
A primary care physician is the insured’s primary doctor and the first point of care. The physician may be an MD or DO who provides comprehensive care and coordinates any additional necessary health-care services.
Primary Care Provider
A primary care provider is a doctor or other health-care professional, such as a physician’s assistant or nurse practitioner, who provides routine, comprehensive care as allowed by state law. The primary care provider also coordinates services and care for the patient.
A provider is a medical professional, such as a physician, who provides patient care. Other health-care entities, such as licensed, state-accredited, or certified health facilities, are also providers.
Reconstructive surgery is a type of surgery that repairs defects caused by injury or disease or present at birth. Facial reconstruction, cleft lip repair, and reconstruction of the breast are examples of reconstructive surgery. Because many reconstructive surgeries are medically necessary for functional reasons, most insurance plans cover them to some extent.
Rehabilitation services are inpatient or outpatient services that help people regain or improve functions and skills that were lost or impaired. People may require rehabilitation services because of an illness or disease or an injury.
Skilled Nursing Care
Skilled nursing care provides health-care services that are performed by a licensed nurse or by technicians and therapists under the supervision of a licensed physician. These services are provided to elderly individuals or people with disabilities in a nursing home or at their place of residence.
A specialist is a physician who has received advanced training in a specific area of medicine. As a specialist, the physician focuses on the management of related conditions and symptoms.
UCR (Usual, Customary, and Reasonable)
Usual, customary, and reasonable is the phrase that defines the amount that one should pay for medical services based on what other similar medical services usually charge. Certain health plans use UCR to help them in setting the allowed amount.
Urgent care is a type of care that is provided for the treatment of symptoms, injuries, or illnesses that are not life-threatening or severe enough for emergency room services but are serious enough that a reasonable person would want immediate medical treatment. Symptoms and situations that are urgent enough that one cannot wait to receive medical care may include dehydration, cuts, minor burns, or a sprain.
- What Is an Out-of-Pocket Maximum? Definition and How it Works
- Key Facts You Need to Know About Cost-Sharing Charges
- Health Insurance: Understanding What it Covers
- What Is Hospice Care?
- Understanding Medical Bills: What Is Medical Necessity?
- Recognizing Medical Emergencies
- Pregnancy Complications
- What’s a Primary Care Physician (PCP)?
- Prescription Drugs and Over-the-Counter (OTC) Drugs: Questions and Answers
- Reconstructive Surgery
- Get to Know Your Doctors: Primary Care vs. Specialists
- What Are Usual, Customary, and Reasonable Charges?
- Emergency and Urgent Care
- Orthodontic Care
- How Coinsurance Works in Your Health Insurance Policy