Healthcare Terms You Should Know

1 out of 10 Americans know four basic health insurance terms health plan premium, health plan deductible, out-of-pocket maximum, and co-insurance. 

However, understanding healthcare terminology is actually essential to getting the best care possible. It also helps the insured to be mindful of how much money they will have to pay and when they have to pay it. 

Premium

A premium is the amount of money the insurance company is going to charge you for the insurance policy they are purchasing. The insurance premium is the cost of the insurance.

Insurance premiums typically have a base amount and by using your personal information, location, age, and other company determined information, discounts may apply to the base premium, in order to get preferred rates or more competitive or cheaper insurance premiums.
 

Deductible

A deductible is not the same as a co-pay. A deductible is a fixed amount you must pay each year before your health insurance benefits begin to cover the costs. For example, If the insurance policy indicates a "$300 deductible," the insurance company pays as agreed after you pay the first $300.

Once the deductible is paid, you would usually pay only a co-payment or coinsurance for covered services. The insurance company pays the rest. It‚s also important to note:

• For certain insurance plans, some have different deductibles, such as prescription drugs.
• Family plans also have both an individual deductible applicable to each person, and a family deductible applies to all family members.
• A lot of times, the plans with lower monthly premiums generally have higher deductibles. Plans with higher monthly premiums have generally lower deductibles.