Health Insurance Terms Explained: From Deductibles to Co-pays

Navigating the world of health insurance can sometimes feel like learning a new language. To make informed decisions about your coverage, it's essential to understand the terminology used in health insurance policies. This glossary demystifies common health insurance terms, helping you better comprehend your policy and what you're entitled to.

Premium

Premium is the amount you pay for your health insurance every month. Regardless of whether you use your insurance or not, this fee keeps your coverage active.

Deductible

A deductible is the amount you need to spend out of pocket each year before your health insurance begins to cover a larger portion of your medical bills. For example, if your deductible is $1,500, you'll pay for most services in full until you've paid $1,500.

Co-payment (Co-pay)

A co-payment, or co-pay, is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service. For instance, you might have a $25 co-pay for each visit to your primary care physician and a $50 co-pay for specialist visits.

Coinsurance

Coinsurance is your share of the costs of a healthcare service, calculated as a percentage of the total cost. For example, if your insurance benefit includes 70% coverage, you're responsible for 30% coinsurance. So, for a $100 medical bill, you would pay $30.

Out-of-Pocket Maximum

The out-of-pocket maximum is the most you have to spend for covered services in a year. After you spend this amount on deductibles, co-pays, and coinsurance, your health plan pays 100% of the costs of covered benefits.

Network

A network refers to the facilities, providers, and suppliers your health insurer has contracted with to provide health care services. Going to a network provider usually costs you less than going to a provider outside of the network.

Formulary

A formulary is a list of prescription drugs covered by your health plan. Drugs on this list are usually divided into tiers, which determine your portion of the drug cost. A drug in a lower tier will generally cost you less than one in a higher tier.

Pre-existing Condition

A pre-existing condition is a health problem you had before the start date of your insurance coverage. Historically, insurance plans could limit or deny coverage for these conditions, but under current laws, most plans cannot do this anymore.

Explanation of Benefits (EOB)

An Explanation of Benefits is not a bill but a document your insurance company sends you after you receive a healthcare service. It details what the insurer paid and what portion you're responsible for.

Annual Enrollment Period (AEP)

The Annual Enrollment Period is the time each year when you can make changes to your health insurance coverage. For Medicare, it's October 15 to December 7, and for Marketplace plans, it typically runs from November 1 to December 15 in most states.

Special Enrollment Period (SEP)

A Special Enrollment Period is a time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for an SEP if you have certain life events, like losing health coverage, moving, getting married, having a baby, or adopting a child.

Turning to Nexus Insurance Advisors for Your Healthcare Needs

Understanding health insurance options can be overwhelming, but you don't have to navigate it by yourself. At Nexus Insurance Advisors, we specialize in guiding individuals and families through the maze of health insurance plans. Our personalized assistance ensures you're well-informed about your choices, helping you select the right coverage for your healthcare needs and budget. Ready to simplify your health insurance search? Schedule an appointment with us today, and let us help you find the perfect plan. Reach out to us at 856-334-0131 or visit our Contact Us page – we're excited to help you get covered!