Understanding Medical Billing and Insurance is crucial to knowing how much your healthcare will cost and making sure you’re covered. The following vocabulary can help you better manage your insurance and medical services.
1. Explanation of Benefits (EOB) Key Terms
An EOB is a statement that your insurance company provides with a summary of what services were covered, what you owe, and any denied services.
Key Points:
- Not a bill-it’s just an explanation.
- It explains what your insurance covers and what you are responsible for paying.
2. Deductible Key Terms
The amount you must pay before your insurance starts to split the cost of medical services is known as your deductible.
Key Points:
- You pay the entire amount until the deductible is paid.
- Insurance begins to reimburse a portion of the amounts after the deductible is paid.
3. Co-payment (Co-pay) Key Terms
A co-payment is an actual dollar amount you pay for certain healthcare services, for example, visits to your doctor or prescriptions, at the time that service.
Key Points:
- It’s a fixed amount, such as $20 for a doctor’s office visit.
- Typically separate from your deductible or coinsurance.
4. Coinsurance Key Terms
Coinsurance is the percentage of expenses you pay out of pocket after reaching your deductible. Unlike co-pays, this is a percentage of the overall price rather than a fixed fee.
Key Points:
- It is usually a percentage, such as 20% of the price.
- Once your deductible has been paid, you split the cost with the insurance provider.
5. In-Network vs. Out-of-Network Key Terms
The terms “in-network” and “out-of-network” refer to whether your healthcare provider is part of your insurance plan’s approved network.
Key Points:
- Health care providers in-network can be cheaper for the patient because they have arrangements with your insurance.
- Health care providers out-of-network could result in more you paying out-of-pocket, or you might receive no coverage at all.
6. Premium Key Terms
A premium is the amount you pay for your insurance coverage, which is often paid on a monthly basis.
Key Points:
- You make regular payments, whether it’s monthly, quarterly, or yearly.
- You pay it separately from your co-pays and deductibles.
- Must be made in order to keep your coverage.
7. Out-of-Pocket Maximum Key Terms
The out-of-pocket maximum is the annual limit for how much you must spend for covered services. Once you hit this limit, your insurance will cover 100% of any additional charges.
Key Points:
- Includes deductibles, co-pays, and coinsurance.
- Offers financial protection against high medical bills.
8. Health Savings Account (HSA) Key Terms
A Health Savings Account, or HSA, is a tax-advantaged savings account from which you can pay for current medical expenses, past medical expenses, and even future medical expenses without worrying about it all. The money in an account can be contributed toward deductible payments, copays, and coinsurance.
Key Points:
- Pre-tax dollars can be placed into an HSA.
- Money does not need to be pulled out of the account at year’s end, and it accrues interest.
Benefits:
Understanding the benefits of your health insurance plan is critical to making the most of your coverage. These benefits specify what medical services and treatments your plan will cover, how much you will have to pay out of pocket, and the laws that govern your care. The following are significant phrases linked to insurance benefits.
Conclusion:
The more you learn the basic medical billing and insurance terminology, the better you are at making decisions relating to your health care and prevent surprise costs. As you read over your insurance, manage medical bills, or simply make sure you are well covered, you’ll apply what you’re learning to be a more astute decision maker.