Health literacy is an issue for many Americans, in part because healthcare has its own language. Hospitals and Health Networks Magazine has a great graphic in their May issue based upon a survey of Texans. So I thought I'd jump off from their list and give my own definitions of the terms in plain English to help any consumers out their Googling "define co-insurance", etc .
Co-Insurance: Some people are covered by two insurances. This can occur when both spouses have insurance plans that cover each other through work or older adults who have Medicare along with a private insurance plan. One plan will be deemed primary for each individual and the second plan will pick up the cost of co-pays, deductibles and perhaps costs associated with "non-covered services" of the other plan. If both a husband and wife each have a plan, their employer's plan will be their primary insurance and their spouse's plan will be their secondary or "co-insurance" plan.
Max out-of-pocket: This is the maximum dollar amount you can expect to pay for your portion. Many insurance plans limit the amount the patient has to pay and after that has been met, they cover the rest of the costs -- usually for the year. This really helps patients with major injuries, illnesses or diseases. For the average American, we never reach the maximum out-of-pocket.
Covered services: These are the healthcare services that are covered by your specific plan. Most don't cover elective procedures like plastic surgery (face lifts, breast implants, etc). Some will cover things like orthodontics, acupuncture or chiropractic, but others do not. When comparing policies, look to see what is or isn't covered and determine which policy better fits with your family's specific healthcare needs. Sometimes, the lowest price plan isn't the best given your health history. It could cost you more if your children need braces or you rely on acupuncture for pain relief. If services aren't covered, the patient is responsible for the cost.
Provider network: This is a good one! The provider network is the network of physicians and other clinicians who are available to provide care to the plan's patients. If you choose an out-of-network provider, expect to pay more. Some plans won't pay anything for out-of-network providers. This means that if you have a relationship with a physician that has gone back over 20 years and you sign up for a new insurance plan and he/she isn't "in the network", then your new insurance may not pay for his/her services. If you have specific clinician preferences always compare the networks of different plans. Another thing about networks is that some plans pay so low, that they have a hard time recruiting new physician and the ones they do have may not be accepting new patients when you call for an appointment. Before you select a plan, call of few of the physicians you might need to see how soon you can schedule an appointment - one week or four months; if at all. And, go online to Yelp, Vitals, Healthgrades or some of the other physician review sites just to see what patients have to say about these physicians.
Premium: This is the amount you pay for the insurance plan you have selected. If you use an employer-sponsored plan, your employer will often deduct this amount from your paychecks for you to pay the premium for the entire group. If you get insurance on your own, you will pay the premium according to the terms of your plan. Just because you pay a premium, doesn't mean you get all of your healthcare for free.
Deductible: This is an amount the insurance plan specifies that the patient needs to pay before the insurance kicks in. Usually, preventative services like annual physicals, mammography, etc. are excluded from the deductible requirement. Some plans may also apply portions of the cost for each encounter to the deductible.
Co-Pay: The patient's portion of the cost of the care. If you have an 80/20 insurance plan, the insurance company will pay 80% and the 20% is your co-pay. The idea is for patients to feel a bit of the pain in their pocketbook to minimize unnecessary care and to help keep costs down. Co-pays are in addition to the amount for the premium.
As you can see, there are several ways for patients to become responsible for paying healthcare costs. This is why it is important for patients and their family caregivers to understand the conditions of their health plan. The Affordable Care Act has resulted in some cost shifting to accommodate the newly insured and those receiving subsidies to help them "afford" insurance. This means that many Americans, if they haven't noticed it already, will begin to see an increase in not only their premium, but also deductibles, co-payments and their responsibility for non-network providers. Those who enjoy great insurance coverage provided by their employers also need to be aware of the impending "Cadillac tax" - again to help subsidize the cost of the Affordable Care Act.