Health Insurance Terminology

Deductible

The deductible is the amount of money that the insured would need to pay before any benefits from the health insurance policy can be used. This is usually a yearly amount so when the policy starts again, usually after a year, the deductible would be in effect again. Some services, like doctor visits, may be available without meeting the deductible first. Usually there are separate individual deductible amounts and total family deductible amounts.

Co-insurance

This is the amount that would need to be paid by the insured before the insurance pays and in addition to the deductible. Some health insurance plans will let the insured use some services with just the coinsurance payment, like visiting the doctor, even before the deductible is met.

Co-payments

This is another term used for, or in place of, coinsurance.

Out-of-Pocket Expense

This is the cost one would pay out of their own pocket. An out of pocket expense can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, that is referring to how much the insured would have to pay for the whole year out of their pocket, excluding premiums.

Lifetime Maximum

This is the most amount of money the health insurance policy will pay for the entire life. Pay attention to individual lifetime maximums and family lifetime maximums as they can be different.

Exclusions

The exclusions are the things that the insurance policy will not cover.

Pre-existing Conditions

This is something someone had before obtaining the insurance policy. Some plans will cover pre-existing conditions while others may completely exclude them and, in addition, some health insurance plans will cover pre-existing conditions after a certain time period.

Waiting Period

This is the time one would have to wait until certain health insurance coverage's are available.

Coordination of Benefits

If the insured has available two or more sources that would cover payment for certain conditions, such being under a spouse's insurance plan along with their own, the insurance company would not pay double benefits. In this case the health insurance company would coordinate benefits to make sure each plan pays a portion of the service.

Grace Period

This is the amount of time one has to pay their health insurance premium after the original due date and before insurance coverage would be canceled.