The insured can be individual or an organization who buys the insurance policy.
The insurer is an insurance company which under a monthly or an annual payment plan provides the insurance to the insured.
Provider (in-the-network and out-of-network providers)
The insurance provider services can be listed under two categories, in the network and out of network.
The insurance company has ties with doctors to work with company and some may be contracted from public medical association for a negotiable fee to be part of services network. In-network services are fully insured to the insured. There is no paperwork involved. However, a copayment in some cases may be unavoidable.
The insurance company under the insured’s request consider the services by doctors and hospitals which are not contracted by them and are out of network. These services are available with a co-payment and substantial coinsurance.
Your health insurance policy comes with a fixed payment plan, paid monthly, quarterly or yearly, known as insurance premium. This ongoing amount is paid even in absence of use of medical services.
A deductible is the amount decided under the policy to be paid by the insured per claim before reimbursement can take place. The higher the deductible, the lower the premium becomes. Once the deductible is met, the insurer becomes liable for paying the claims. If you have a $500 deductible per year but your expenses exceeded to $600, you can claim for reimbursement of $100.
Co-payment is a certain amount the insured is likely to bear when seeking medical services. This may include visiting fees and non-generic prescription drugs. It also acts as deterrence to seek medical services unnecessarily.
Coinsurance is a percentage of services cost that the insured pays when the deductible exceeds the policy’s stop loss. The insurer pays 100% of medical expenses after the deductible is met. Suppose, for a coinsurance of 20%, you have to pay $20 and the insurance company will be paying $80 for a medical bill of $100.
It is the maximum amount that the insured has to pay for seeking medical services covered under the health care plan when the deductible is met. With an out-of-pocket maximum, the insured can save a lot of expenses. For e.g., with an out-of-pocket maximum of $1000, if the medical expenses amount to $10,000, the insured pays $1000, while the insurer pays the rest. Without it, the insured pays around $1200 and the insurer pays $8800.
Various health plans are restricted by the Affordable Care Act on putting a cap on the lifetime limit on basic medical care benefits. For beyond basic medical services, insurance companies can add an annual or lifetime dollar limit such as $2 million lifetime limit. Lifetime dollar limit can also be stated for specific medical benefits such as knee replacement surgery to the insured. The insurance plan is not liable for covering any claims after a lifetime limit has been reached.
Catastrophic health plans are meant for individual and families for medical expenses related to hospitals or short-term medical care. Many medical services are not covered under this plan include preventive care, visiting fees, and prescriptions. This plan includes lower premium and higher annual deductible. It saves effectively from the emergency care expenses.