Understanding Healthcare Terminology

Let’s face it: insurance rules and regulations are confusing. It can be hard to figure out your medical bills and the explanation of benefits when you aren’t really comfortable with healthcare terminology, especially that related to insurance. It can be even harder to discuss issues with your insurance company if you don’t understand the terms they use. That’s why we’ve provided a list of some of the most common terms related to healthcare and insurance.

Basic Insurance Terms

Insurance is a system whereby you exchange a monthly premium for promised payments to cover losses from dangers as specified in your insurance contract. In the case of health insurance, the dangers are illness and medical emergencies. The insurance policy is the contract issued by the insurance company to you, the policyholder, that outlines the details of the agreement. The premium is the monthly amount that you pay for your insurance policy.

Healthcare Terminology

Your health coverage plan, also called a health insurance policy, is the insurance you purchase to cover the costs or losses that are incurred if you become ill or suffer from a medical emergency. An emergency is different from a typical illness. An emergency is a very serious medical condition that can include severe pain, heart attack, stroke, convulsions, loss of consciousness, bleeding, or difficulty breathing. These types of symptoms should be treated at an emergency room rather than by your family doctor.

Major medical is a type of health insurance plan that provides much more coverage than the basic medical plan. The insurance has a much higher limit but also has a higher premium. A basic medical plan, on the other hand, will pay agreed-on expenses but only up to a relatively low maximum amount.

Coverage refers to conditions or medical services that your health insurance will pay the expenses related to. For example, your coverage may not include an adjustment by a chiropractor, but will pay for the expenses related to a broken bone. Conditions or services that your insurance does not cover are referred to as exclusions.

Nerve cell network

The term network refers to a group of medical providers that have contracted with your insurance company and result in the highest payment levels for your medical expenses. If you see an in-network medical provider, the insurance will pay much more toward your medical expenses than if you see an out-of-network medical provider. Seeing a doctor that is in your insurance network is referred to as in-network care; seeing a medical provider that isn’t in your network is out-of-network care.

Terms Related to Insurance and Payments

Benefits refers to the money paid by your insurance company to the health care provider to cover the cost of your medical services should you be become ill or injured. An insurance claim is a request for payment made by your healthcare provider to your insurance company for the cost of expenses that are covered under your policy. Your healthcare provider is usually responsible for submitting the claim to your insurance company.

Co-insurance is the amount you are expected to pay for covered medical expenses after you have satisfied either your co-payment or your deductible. This co-insurance amount is usually a percentage. Your co-payment, or co-pay, is a fixed-amount (as opposed to a percentage) that you are expected to pay each time a particular kind of medical service (e.g., visit to the emergency room, an appointment with your primary care physician) is used.

Spreadsheet

Your insurance most likely has a deductible. The deductible is an amount that you need to pay for medical services before your insurance will begin paying their portion. It is an annual amount and it is cumulative, which means every time you pay for your own medical services it applies to your yearly deductible. Once you have “met” the deductible, the insurance company starts paying as agreed for your medical expenses. Out-of-pocket costs refers to the total amount you pay (out of your own pocket) for your medical expenses in a single policy year. This includes deductibles, co-pays, and any amounts your insurance company considers to be above the usual and customary charges. Usual and customary charges is any amount above the routine charge for a medical service. Routine charges are based on charges for the same (or similar) service from similar medical providers in your geographical area.

An explanation of benefits (or EOB) is the official name for the statement you receive from your insurance company that summarizes the services you have received, the amounts paid by your insurance plan, and the total that you will be billed by the medical provider. It is not the same as a bill you would receive from your medical provider.

Conclusion

Mastering the basics of healthcare and insurance terminology will help you when it comes time to discuss issues related to your medical bills or find out how much you may owe for certain medical services. In order to speak with someone from medical billing or your insurance company, you must make sure you understand their language.

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