If you've started searching the best health insurance companies, you might be struggling with a barrage of new terms that can be quite confusing. How do you know a co-pay from a deductible from an out-of-pocket? Here’s a brief glossary of some of the more common jargon that you might come across (for abbreviations of actual plans - HMO, PPO, etc - see our guide to beginning your search for a policy)
BASIC MEDICAL PLAN: As there name implies, this is a basic policy that pays expenses agreed upon in advance, and will usually have a low maximum.
BENEFITS: These can be a wide range of services, including ongoing medical treatments, physiotherapy, mental health treatment - almost anything that the insurance company will pay for if and when you need treatment after taking out the policy. Be sure to know what benefits your policy will cover.
CO-PAYMENT: An agreed-upon set cash amount that you will pay each time you use a particular service. For instance, seeing your primary care physician may require a co-pay of $20 per visit, depending on the policy.
DEDUCTIBLE: The cash amount that you are responsible for before any of the benefits of the policy come into effect. For instance, if your deductible is $200 and your medical treatment costs $400, you will pay the first $200 with the insurance company picking up the rest. Again, this doffers from policy to policy. Lower premiums usually mean higher deductibles, and vice versa.
EXCLUSIONS: Procedures and treatments that are not covered by your policy. This can be anything - for instance, cosmetic procedures - but check carefully with your insurance company.
EXPLANATION OF BENEFITS: A clear statement issued by the insurance company listing the services received, the amounts covered by the policy and the sum for which you will be responsible for paying.
IDENTIFICATION CARD: A card issued but he insurance company that shows you are eligible for treatment. You will need to present this card each time you visit a provider.
MAJOR MEDICAL: A more expansive policy than the Basic Medical Plan, with higher limits na usually higher premiums.
NETWORK: This is the list of approved medical practitioners and institutions that the insurance company will show you as you choose you plan. Many policies require you to stay within their network for treatment or visits as they have contracts with these companies for discounted services. Some policies let you go out of network for an additional fee. The larger the city or town that you live in, the larger your network is likely to be, so seeing this network can be especially important for people in smaller towns or rural areas. Make sure that the list of approved doctors and hospitals is likely to cover your requirements as straying outside of the network can be expensive depending on the policy you take out.
OUT OF POCKET COSTS: These are simply the amount you pay for your policy (usually once per year). These will likely include any deductibles, but can also include any expenses that the insurance company deem out of the ‘ordinary’ (also known as ‘Usual and Customary’ -see below) so again, be sure to check with your policy vendor what this actually means for your specific policy.
PRE-EXISTING CONDITION: This can be any medical condition that you have previously been diagnosed or treated for, usually up to three to six months before you take out the insurance policy. At the moment, it is illegal for insurance companies to deny coverage or raise premiums due to a pre-existing condition, but this is a hot topic and could change in the future. Again, make sure you ask about this when taking out a policy just to be sure.
PREMIUM: The amount your health insurance policy costs. Although it seems intuitive to look for lower premiums, if you think you’re going to need regular medical care or you’re planing on having a baby, for example, it can sometimes be better to pay higher premiums as then your deductibles or co-pays can be lower. If you’re in good health and don’t envisage having to see a doctor very often, lower premiums are the best way forward.
USUAL AND CUSTOMARY: These charges can also sometimes be referred to as ‘Reasonable and Customary’. This basically referee to routine charges by the medical professionals listed in the insurance company’s network. If you see a provider that charges more than the average for your network, then you may be susceptible to extra fees. Talk to your policy advisor before making any decisions on a healthcare provider - this is just good advice in general.
You might also find our how to choose a health insurance plan guide useful, while we also rate the best dental insurance and the best vision insurance plans if you're looking for something more specific.