Health Insurance Terms and Definitions

One of the greatest problems for most people is simply comprehending the health insurance benefits that they have. Generally, health insurance policies try to be user-friendly in their wording and terminology, most people are just not acquainted with medical and insurance terminology.

Most health insurance policies also provide something similar to a cheat sheet which provides the essential outline of insurance plan coverage and covers the most frequent medical services. However, you need to be certain that you understand the several things that are excluded through your plan. Many health insurance plans provide limited benefits for services such as mental health, chiropractic services, and occupational health. Also physical remedy and home health care are usually limited to a certain volume of visits per year. 

Co-payment or Co-pay

A co-payment is a pre-determined amount that you must pay a medical professional for a particular type of service. For instance, you could be required to pay a $15 co-payment when you visit your doctor. In this instance, you must pay $15 to the doctor’s office in the time the visit. Normally, you aren’t required to pay any additional fees — your health insurance company will probably pay the rest. However, in some cases, if your health insurance policy specifies it, you could be in charge of a co-payment and then a ratio of the remaining balance.


An insurance insurance deductible is the amount of your medical expenses you must pay money for before the health insurance company will commence to pay benefits. Most health insurance programs have a calendar-year allowable meaning that in January of every beginning of the year the deductible need starts over again. Thus, if your calendar season deductible is $1500, as long as your medical expenses for the current year do not go beyond $1500 the company pays off nothing for the year. When January of the new year starts, you have to get started again to cover $1500 of your own medical expenses.


Coinsurance (or out-of-pocket expense) is the amount or ratio of each medical fee that you are required to pay. For occasion, you may have a $100 medical charge. The health insurance company are going to pay 80% of the fee and you are in charge of the additional 20%. The 20% is your coinsurance amount.

Coinsurance accrues through the year. If you have a sizable volume of medical charges in one yr, you may meet the coinsurance maximum requirement for your policy. At that time, any covered charges will be paid at 100% for the rest of the calendar season.

Stop loss or out-of-pocket expense limit

Sometimes you will hear the out-of-pocket expense limit referred to as your stop reduction or coinsurance amount. Quite simply, this is the amount you will want to pay away of your own pocket sized per calendar year before the health insurance company pays everything at completely.

You will need to check your policy because many policies that require co-payments do not allow these co-payments to visit toward the out-of-pocket amount. Intended for example, you may have reached your out-of-pocket maximum for 12 months, so if you are admitted to the hospital you may pay nothing. However, since you have to pay a $15 co-payment whenever you visit the doctor, you will still have to make this co-payment.

Lifetime obtain the most

This is the maximum amount that the health insurance company will pay toward your medical expenditures for the lifetime of your policy. Generally, this amount with the large numbers of dollars. Unless you have a very severe condition, you will not likely exhaust this amount.

Preferred Provider Organization

A Preferred Provider Organization (also known as a PPO) is a group of participating medical providers who have agreed to assist the health insurance company at a reduced rate. It’s a win-win situation for each and every side. The insurance company has to pay less money and the providers receive computerized prospects.

In most health insurance policies, you will observe different advantage levels depending on whether you check out a participating or nonparticipating provider. A PPO plan provides more overall flexibility for the insured person because they can visit either a participating or nonparticipating provider. They just receive an improved price if they use an engaging one.

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