Health Insurance 101

Health insurance is designed to protect you and your family from the high cost associated with medical bills should any of you ever become ill or injured. When you have health insurance, you don’t have to lay there worrying about how you’re going to pay for it all. Instead you can concentrate on the important process of healing and getting better.

The term health insurance refers to a variety of insurance policies, ranging from those that cover the costs of doctors and hospitals to those that meet a specific need — like long-term care or dental coverage. When most of us talk about health insurance, however, we refer to the kind of plan that covers doctor bills, surgery and hospital costs.

What the heck does that word mean?

All the different words used in a health care policy can make your head spin! Here are some common terms and definitions used with health care insurance –

Admitting privilege: The right granted to a doctor to admit patients to a particular hospital.

Copay: A fixed dollar amount you pay at the time services are rendered. Typical copays are for office visits, prescriptions, or hospitalizations.

Coinsurance: A specified percentage of the cost of treatment the insured is required to pay for all covered medical expenses remaining after the deductible has been met.

Deductible: The portion of your health care that you pay before insurance starts covering it. Typically, the higher the deductible, the lower the premiums.

Dependent: A person relying on the policy holder for support.  May include a spouse and/or unmarried children.

Disability income insurance: This plan will provide you with an income if you become unable to work due to an injury or illness. Benefits are usually 60% of your income at the time of disability

In-network: Refers to medical providers or health care facilities that are part of a health plan’s network of providers with which it has negotiated a discount.

Pre-existing condition: An illness, disease or condition an individual has at the time of enrollment in a health care plan.

Premiums: The monthly or quarterly payments paid for health insurance.

Long-term care policies: These cover medical care, nursing care and certain in-home care if you ever become unable to care for yourself due to an extended illness or disability.

Disability income insurance: This plan will provide you with an income if you become unable to work due to an injury or illness. Benefits are usually 60% of your income at the time of disability.