5 Key Terms to Know When Shopping for Health Insurance

Five Most Important Keywords Related to Health Insurance

  • Copayment
  • Deductible
  • Inpatient
  • Out of Network
  • Premiums

Purchasing health insurance is a complex process that requires a lot of time and effort spent researching keywords related to coverage options. Nonetheless, according to the United States Census Bureau, the percentage of those who had valid policies in 2017 was 91.2. Many of them succumbed to the sales strategies employed by large corporations who leverage people’s lack of understanding on some of the following terms.

Copayment

A copayment is one of the most important keywords to remember as it will dictate how much the patient has to pay whenever they visit their provider. It represents the amount that comes out-of-pocket and tends to be much lower than the full price of any doctor visit. People who want to pay higher premiums, a term which will be defined shortly, will usually have lower copays. The reason why this particular verbiage was used here goes back to the financial nature of the payment. Unlike paying for something alone, the copay is just a portion of the total payment that is shared between the patient and the insurance agency.

Deductible

Many people tend to confuse copays with deductibles because they are another contract clause that forces the patient to make out-of-pocket payments. In reality, however, these two are nowhere near the same. A deductible is an amount that the patient has to pay in total before their insurance will cover anything. If someone’s deductible is $500, per se, the patient will not be eligible for any insurance coverage until they spend $500 of their own money. This is different from a copay because deductibles are not based on combined payments from both the insured party and the insurer.

Inpatient/Outpatient

When looking into some of the most common keywords related to healthcare, it is practically impossible to look over inpatient or outpatient services. The inpatient services are those that require people to be hospitalized and treated inside a facility. This route is much more expensive as it will add room and board charges to someone’s final bill. The term “outpatient” is the complete opposite and stands for services where the patient does not need to be held at a hospital. Examples would include visits to a doctor’s office or clinic.

Out of Network

Since the healthcare market is amongst the largest ones of the planet, there are a plethora of providers in every practice area. Most insurance agencies, however, work with predetermined companies and have no universal coverage that will work everywhere. Hence why understanding what “out-of-network” services stand for is important. If a patient needs medical care, they are advised to find an in-network provider because the charges will be much lower. Going to an out-of-network specialist will mean that the insurance applies in a way that makes copays and deductible much higher.

Premiums

The final keyword that has to be brought up revolves around payments that people need to make in order to maintain their coverage. These are known as “premiums” and they can be calculated on a monthly, quarterly, semi-annual, or annual basis. Of course, everyone’s premiums will differ based on their medical history, elected coverage, and many other inputs that directly impact the price. Failing to make those payments could easily result in liability as many insurance policies operate as contracts that insurance agencies can pursue in court. More importantly, failing to pay will lead to a loss of coverage.

Related Resource: 10 Best Cheap Health Insurance Companies

Some other significant keywords include elective, dependent, coinsurance, and benefit period. In order to fully comprehend those, however, it is important to truly master the words mentioned above. Doing so will help one accurately determine if an offer is favorable based on the key terms that help simplify shopping for health insurance.