Health Insurance Articles
4 Health Insurance Terms That People Misunderstand
2010-06-21
A misunderstanding doesn't usually cost much, unless it has to do with your health insurance. Then, understanding every word of all health insurance terms becomes critically important. Here are four sets of terms that are easily confused or misunderstood about health insurance terms.
Deductible, co-insurance, and co-payment are three words that have somewhat overlapping definitions because they deal with the amount and percentage the patient and an insurance company pay for a procedure or office visit. Each is distinctly different, despite treading similar turf. A deductible is a yearly amount, chosen by the individual, above which an insurance company will cover the expenses. These plans are usually based on yearly amounts. For example, after the patient's visits total $500, the insurance company covers the rest of the expenses for the year. Usually, healthy individuals would opt for higher deductibles and the lower premiums, or payments, they enjoy.
Co-insurance is the amount an individual is required to pay along with their insurance company, after the deductible has been covered. It is usually represented as a percentage, such as the insurance company pays 75 percent while the individual contributes 25 percent. A co-payment is the amount an individual needs to pay per visit. Rather than being expressed as a percentage, co-payments are a fixed amount. For instance, each visit to the doctor might require a ten dollar co-payment.
When you purchase health insurance, you may have an illness or injury that has stayed with you for years. Whether it's a football injury, breast cancer, or migraine headaches, they are called pre-existing conditions. Usually pre-existing conditions are excluded from immediate coverage. There may be a waiting period of up to a year before pre-existing condition is covered by a new insurance policy.
An outpatient is a patient who receives surgery without staying overnight in a hospital. Usually an outpatient is prepped for surgery near dawn and the operation is completed early in the morning. The patient can usually go home around two o'clock. These procedures may be for elective surgery, which means surgery that was not critical at the time the appointment for surgery was made. Most insurance companies have a list of procedures and tests they will only cover when performed as outpatient procedures.
Brand-name or branded drugs are marketed under a specific brand name with assured recognition due to their patent and trademarks. Branded drugs are expensive because they have incurred huge research and development costs before being launched as a safe, effective product. Generic drugs are medicines that are developed after a branded medicine's patent expires. They are equal in strength and purity, but cost less due to the lack of expense developing the medicine. Insurance coverage may vary between generic and branded drugs, so check your policy.
