Health Insurance 101
Terms & Definitions
Premium: The monthly cost of your insurance that you pay to the insurance company
Deductible: Amount of money that the insured must pay before the company will start helping to pay for claims. This is typically the most important part of your health insurance coverage.
Copayment: A fixed amount you pay to the provider for a covered service. Copays do not go towards your deductible, but are applied towards your maximum out of pocket expenses.
Coinsurance: The percent of costs you pay after you’ve hit your deductible
- Ex: If you have 80/20 coverage, after you’ve met your deductible, the insurance company pays 80% of what’s left of the bill, and you pay the other 20%. This 20% is called coinsurance.
Out-of-Pocket Maximum: The most you have to pay for covered services in the plan year. This includes deductibles, copays, and coinsurance. This does not include monthly premiums. After this maximum is reached, the insurance company pays for the rest of all medical bills.
Types of Health Insurance
Group plans: Plans done through an employer; has networks; typically done best with >10 people
ACA/Obamacare/Marketplace: Coverage facilitated by the government; no underwriting and accepts all pre-existing conditions; opportunity for tax credits (think of this as a “discount”) to reduce premium costs based on income; has networks
Share Programs: Not technically insurance; group of people who band together to help pay for each other’s medical bills; typically have lifestyle requirements (religious affiliation, no tobacco use, etc.)
Short-Term Health Insurance: Made for transitional periods such as waiting to start Medicare, between jobs, and waiting for other coverage to begin; also a simple and cheaper alternative to ACA
Supplemental/Catastrophic Plans: Insurance à la carte (pick and choose your coverage); catastrophic-only options; cancer plans; accident plans; often do not have networks
Medicare: Government sponsored health insurance for those 65+ years old; federally regulated
Medicaid: Government program for those with low incomes
For a free, no-obligation health insurance quote, call us at 402.830.5904 or fill out our quote form online by going here.