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MEDICAL HEALTH INSURANCE Terms and Definitions
One of the largest problems for many people is simply understanding medical insurance benefits that they have. For the most part, health insurance policies try to be user-friendly within their wording, but many people are just unfamiliar with medical and insurance terminology.

Most medical health insurance policies also provide something such as a cheat sheet gives the basic outline of policy coverage and covers the most typical medical services. However, you have to be sure that you understand the different things that are excluded under your plan. Many medical health insurance plans provide limited benefits for services such as for example mental health, chiropractic services, and occupational health. Even physical therapy and home healthcare are often limited to a certain amount of visits per year.

Co-payment or Co-pay

A co-payment is really a pre-determined amount that you must pay a medical provider for a specific type of service. For instance, you may be required to pay a $15 co-payment when you visit your doctor. In this instance, you must pay $15 to the doctor's office at the time of the visit. Normally, you are not required to pay any extra fees -- your health insurance company will pay the rest. However, occasionally, if your health insurance policy specifies it, you might be in charge of a co-payment and then a percentage of the remaining balance.

Deductible

A deductible is the amount of your medical expenses you need to pay for before the health insurance company will begin to pay benefits. Most health insurance plans have a calendar-year deductible meaning that in January of every new year the deductible requirement starts over again. So, if your twelve months deductible is $1500, provided that your medical expenses for the existing year usually do not exceed $1500 the insurance company pays nothing for that year. Once January of the new year starts, you should begin again to pay for $1500 of your own medical expenses.

Coinsurance

Coinsurance (or out-of-pocket expense) is the amount or percentage of each medical charge that you will be required to pay. For example, you might have a $100 medical charge. Your health insurance supplier can pay 80% of the charge and you also are responsible for the additional 20%. The 20% is your coinsurance amount.

Coinsurance accrues throughout the year. If you have numerous medical charges in a single year, you may meet the coinsurance maximum requirement of your policy. At that time, any covered charges will be paid at 100% for the rest of the twelve months.

Stop loss or out-of-pocket expense limit

Sometimes you'll hear the out-of-pocket expense limit referred to as your stop loss or coinsurance amount. Basically, it is the amount you will need to pay out of your pocket per twelve months before the health insurance company pays everything at 100%.

You will have to check your policy because many policies that require co-payments don't allow these co-payments to go toward the out-of-pocket amount. For instance, you might have reached your out-of-pocket maximum for the entire year, so if you are admitted to a healthcare facility you may pay nothing. However, because you need to pay a $15 co-payment each and every time you go to the doctor, you will still have to get this to co-payment.

Lifetime maximum benefit

Here is the maximum amount that the health insurance company will pay toward your medical expenses for the lifetime of your policy. Generally, this amount is in the millions of dollars. Unless you employ a severe condition, you won't likely exhaust this amount.

Preferred Provider Organization

A Preferred Provider Organization (also called a PPO) is really a group of participating medical providers who have agreed to work with the health insurance provider at a discounted rate. It's a win-win situation for every side. The insurance company has to pay less overall and the providers receive automatic referrals.

In most medical health insurance policies, you will see different benefit levels based on whether you search for a participating or nonparticipating provider. A PPO plan provides more flexibility for the insured person because they can visit either a participating or nonparticipating provider. They just get a better price should they work with a participating one.

Health Maintenance Organization

A Health Maintenance Organization (generally known as an HMO) is really a medical health insurance plan which restricts one to only using specified medical providers. Generally, if you don't are out from the section of their network, no benefits are payable in the event that you visit a nonparticipating physician. Typically, you are required to select one main doctor who will be most of your Care Physician (PCP). If you have a health problem, you need to visit this doctor first. If they feel that you will need it, they'll refer you to another network provider. However, you cannot just decide on your own to go to a specialist; you need to proceed through your PCP.

Medically necessary

You will see this term in every health insurance policies, and it is a frequent cause of denied claims. Most insurance companies won't cover any expenses that they usually do not consider medically necessary. Just because you and/or your doctor consider something medically necessary, your health insurance company may not. That is why, you always need to verify that any costly procedures you are considering will be covered.

Routine treatment

Routine treatment is normally defined as preventive services. For example, a yearly physical examination you have on a regular basis is generally regarded as routine. Most of the immunizations that children and adults receive are categorized as this classification. Some insurance companies provide limited coverage for routine treatment; others provide no benefits at all.

Pre-existing condition

A pre-existing condition is a condition that you acquired and/or received treatment for prior to the effective date of one's current health insurance policy. Medical health insurance companies vary on how they treat pre-existing conditions. Some companies won't give you coverage at all when you have certain chronic pre-existing conditions. Others provides you with coverage but will not provide any benefits for a period of time -- usually from 12-24 months. Still, other medical health insurance companies will specifically exclude a pre-existing condition from the policy and can never provide any benefits for that condition.

Be sure that you are very clear on the pre-existing limitations of one's policy so that you will aren't unpleasantly surprised when you visit your doctor.


Explanation of Benefits

This is the form that the health insurance company supplies you with once they complete the handling of your claim. Visit this link details the bill they received and how they processed it. It is commonly named an EOB.

Coordination of Benefits

If you are eligible for benefits under multiple health insurance plan, your various health insurance companies should coordinate benefits. This insures that only 100% of the total charge is paid. There are several variations on how this situation can occur. Generally, the primary company makes their payment first. Then you file a copy of the charges with the secondary company along with a copy of the reason of Benefits (EOB) from the primary company. The secondary company usually picks up the rest of the bill.

Participating provider

A participating provider is a medical provider who has signed a contract with a health insurance company or medical health insurance network to charge pre-determined rates to patients that are in the network.

Nonparticipating provider

A nonparticipating provider is really a medical provider who does not need a contract with a particular medical health insurance company or network. If you are using a nonparticipating provider, you'll generally pay a larger portion of the bill. Sometimes, you may be responsible for the entire bill.

Limited benefit plans

These are not considered to be comprehensive medical insurance plans. Instead, they offer very specific, limited benefits for various kinds of services. For example, they may provide a flat rate for each day you stay in a healthcare facility or pay a restricted amount for each surgical procedure that you have.

Typically, they're marketed toward individuals who cannot afford or are unable to obtain more comprehensive coverage due to pre-existing health conditions. Or, they might be geared toward those who have high-deductible plans. The great thing about these plans is they generally pay besides any other coverage you may have. Therefore, no coordination of benefits is required.

If this is your only coverage, be aware that you will usually have to pay a large portion of any bill as these limited plans usually do not usually pay large amounts per day. For example, it may actually cost you $1000 a day to stay in the hospital. If your limited benefit plan pays you $200 a day for each day you may spend in the hospital, you will be personally responsible for the remaining $800 per day.

Medicare supplement plans

Individuals who have Medicare often choose to purchase a Medicare supplement plan as Medicare will not usually cover medical charges completely. Medicare continues to change and add new options but, generally, a supplemental plan pays the balance of the medical charges after Medicare pays its portion. For instance, most Medicare supplements will pick up the Medicare deductible.

Some policies also pay for a number of the charges that Medicare may not cover. There are numerous policy variations. If you are not sure everything you are purchasing, consider contacting a broker that assists senior citizens.

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