Understanding Insurance Terminology

You must understand these concepts to evaluate health insurance plans.

Term	Definition
Monthly Premium	A monthly cost to you, the consumer, paid to the insurance company even if you never go to the doctor or use any of your benefits.
Deductible	The amount you’re responsible for paying each year for covered medical expenses before your health insurance plan begins to pay for them. The insurance company pays for $0 in expenses until your deductible is met within a year. Your monthly premiums do not count towards meeting this deductible amount.
Out-of-Pocket Expenses	Most plans require you to pay some part of the costs, such as a copay when you visit the doctor and/or your deductible and coinsurance. All costs for covered services that you pay for are called “out-of-pocket expenses” because you pay for them out of your own pocket.
Bully Cat
Co-Payment	A fixed amount you pay for a covered health care service. For example, every time you visit an in-network doctor, you pay a fixed amount known as your “copay.”
Co-Insurance	Even once your deductible is met, most health insurance plans don’t pay 100% of the cost for absolutely everything related to your health care. CoInsurance is how costs are shared between you and the health insurance plan. For example, if your plan has 20% CoInsurance, you pay 20% of costs and your plan pays 80%. The percentage may be different from plan to plan, and may be different for In-Network and Out-of-Network health care providers. Some plans may not have coinsurance.
Out-of-Pocket Max Limit	This is the maxiumum amount that you, the consumer, will pay out of your own pocket for medical expenses in a year. This does not include your monthly premiums. Once your Out-of-Pocket Expenses has reached this amount in a year, the insurance company pays 100% of covered expenses for the rest of the year. The requirement to have an Out-of-Pocket Max Limit is a new rule for insurance companies. Each plan has a different out-of-pocket max, but the amount is capped by law in 2014 at $6,350 for an individual plan and $12,700 for a family plan.