Health Insurance 101

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Insurance can be confusing. Here are some simple definitions to help explain common terms you may come across.

  • Premiums: The monthly amount you pay to maintain health insurance coverage.
  • Deductible: The initial out-of-pocket amount you pay before insurance coverage kicks in.
  • Copayments (Copays): Fixed amounts you’ll pay at the time of service.
  • Coinsurance: The percentage of costs shared between you and the insurance after meeting the deductible.
  • Networks: Insurance plans may have preferred networks of doctors and facilities, which are considered in-network. Out-of-network care may have higher costs, due to not using an in-network provider.
  • Benefits: The services that are covered by the insurance, including preventive care, hospital stays, prescription drugs and more.
  • Exclusions: Conditions or services not covered by the insurance plan.
  • Out-of-Pocket Maximum: The maximum amount you’re required to pay in a plan year. After the out-of-pocket maximum has been met, insurance covers 100%.
  • Authorization/Precertification: Some insurances require authorization before they will allow you to have certain treatments or procedures. This can include physical and occupational therapy. If approved, the insurance will designate the number of visits allowed as well as a date range for treatment.
  • Preventive Care: Routine check-ups, vaccinations, and screenings covered at no or low cost to prevent illnesses.
  • Open Enrollment: Annual period for you to sign up for or change health insurance plans.
  • Special Enrollment: Allows you to enroll outside of the regular period under certain circumstances, such as changing jobs, getting married, or having a baby.
  • COBRA: Allows continuation of group health insurance for a limited time after you leave a job.
  • Health Savings Accounts (HSA) & Flexible Spending Accounts (FSA): Allow you to save pre-tax dollars for medical expenses. HSAs are only available to those who are enrolled in a high deductible health plan.
  • Health Maintenance Organization (HMO): A type of health insurance plan that requires members to choose a primary care physician (PCP) and get referrals to see specialists. Physical and occupational therapy are often considered specialties by these plans.
  • Preferred Provider Organization (PPO): A type of health insurance plan that offers you more flexibility in choosing health care providers and does not require a referral to see specialists.

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