Health Insurance Terms and Definitions

One of the greatest problems for most people is simply comprehending the health insurance benefits that they have. In most cases, health insurance policies try to be user-friendly in their phrasing, several people are just not knowledgeable about medical and insurance terminology.

Most health insurance policies also provide something similar to a cheat sheet which provides the fundamental outline of plan coverage and covers the most frequent medical services. However, you need to be certain that you understand the several things that are excluded below your plan. Many health insurance plans provide limited benefits for services such as mental health, chiropractic services, and occupational health. Possibly physical remedy and home health care in many cases are limited to a certain quantity of visits per year. 

Co-payment or Co-pay

A co-payment is a pre-determined amount that you must pay a medical professional for a particular type of service. For instance, you could 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 during the visit. Normally, you’re not required to pay any additional fees — your health insurance company will probably pay the rest. However, in some cases, if your health insurance policy specifies it, you may well be in charge of a co-payment and then a ratio of the remaining balance.


An insurance tax deductible is the amount of your medical expenses you must purchase before the health insurance company will commence to pay benefits. Most health insurance strategies have a calendar-year allowable meaning in January of every beginning of the year the deductible need starts over again. Consequently, if your calendar yr deductible is $1500, as long as your medical expenses for the current year do not go beyond $1500 the company pays off nothing for your year. When January of the new year starts, you have to commence again to fund $1500 of your own medical expenses.


Coinsurance (or out-of-pocket expense) is the amount or ratio of each medical demand that you are required to pay. For example, you may have a $100 medical charge. The health insurance company are going to pay 80% of the demand and you are in charge of the additional 20%. The 20% is your coinsurance amount.

Coinsurance accrues during the year. If you have a sizable range of medical charges in one yr, you may meet the coinsurance maximum requirement for your policy. At that time, any covered charges will be paid at 100% for the rest of the calendar yr.

Stop loss or out-of-pocket expense limit

Sometimes you will hear the out-of-pocket expense limit referred to as your stop damage or coinsurance amount. Fundamentally, this is the amount you should have to pay away of your own bank per calendar year before the health insurance company pays everything at fully.

You will need to check your policy because many policies that require co-payments do not allow these co-payments to visit toward the out-of-pocket amount. To get example, you may have reached your out-of-pocket maximum for 12 months, so if you are admitted to the hospital you may pay nothing. However, since you have to pay a $15 co-payment whenever you visit the doctor, you will still have to make this co-payment.

Lifetime obtain the most

This is the maximum amount that the health insurance company will pay toward your medical expenditures for the lifetime of your policy. Generally, this amount with the large numbers of dollars. Unless you have a very severe condition, you will not likely exhaust this amount.

Preferred Provider Organization

A Preferred Provider Organization (also known as a PPO) is a group of participating medical providers who have agreed to use the health insurance company at a reduced rate. It’s a win-win situation for each and every side. The insurance company has to pay less money and the providers receive computerized testimonials.