Health Insurance Basic Terminology

Shopping for health insurance usually means you are assailed with a dizzying array of new terminology. Without a working knowledge of basic health insurance terms, you might have trouble making an informed decision about your healthcare coverage. In this post, we will give you simple, easy-to-understand definitions of all the health insurance terminology you need to know.

Benefits - covered medical services to which the policyholder is entitled.
Claim - a request for payment sent to the insurance company or healthcare provider.
Coinsurance - the amount of medical costs the policyholder is responsible for paying out of pocket. Coinsurance usually represents a percentage of the total bill.
Co-payment - a certain amount of money paid by the policyholder at the time services are rendered.
Deductible - the amount of money a policyholder must pay before the insurance company will begin paying for medical expenses.
Disability insurance - policy that pays you when you are unable to maintain employment for an extended period of time due to an injury or illness.
Group health insurance - health insurance offered to a group of people, usually through an employer.
Health Savings Account (HSA) - a high-deductible health plan combined with a personal savings account that can be used to pay for qualifying medical expenses.
High-deductible health plan - also called catastrophic health insurance. Covers medical expenses beyond the limits of typical coverage.
Indemnity plan - type of plan that allows the policyholder to choose his/her doctors and other healthcare providers. The plan pays for these services either entirely or on a percentage scale, such as 80% reimbursement.
Individual health insurance - plan purchased by an individual rather than a group.
Long-term care insurance - provides for care in a private home, nursing home, or assisted-living facility.
Managed care - companies that contract with specific providers and provide financial incentives for their members to stay in this network of providers.
Network - group of physicians and other providers that work for or with a healthcare organization.
Premium - the cost of a health insurance policy.
Provider - a hospital, physician, or other person or facility that provides medical care.