The US health care system is incredibly complicated and it seems to add insult to injury that most of us have to learn an entirely new language just to be able to keep up. In this series, we will be taking on the language barrier and defining some of these nebulous words and phrases.
To kick off the Do You Speak Health Care? series, we’ve collected definitions from the HealthCare.gov glossary for the most important vocabulary words in the system – those that deal with consumers and money. As always, we suggest talking to your insurance company about your specific policy because coverage varies.
The maximum amount a plan will pay for a covered health care service. This can also apply to covered services at an out-of-network provider.
When a provider bills you for the difference between the provider’s charge and the allowed amount.
Balance Billing In Action: Susan has been having incapacitating headaches for several months. Her doctor told her she needed a CT scan and she went to an imaging center that wasn’t designated as covered by her insurance company (out-of-network). While her insurance plan fully covers CT scans at in-network providers; it has an allowed amount of $1500 for the service at an out-of-network provider. The imaging center Susan used charges $2000. Susan is then balance billed $500 directly from the imaging center, outside of her insurance company. *Note, Colorado recently passed legislation that protects patients from balanced billing.
The percentage of costs of a covered health care service you pay (20%, for example) after you’ve paid your deductible.
A fixed amount ($20, for example) you might pay for a covered health care service at the time of your appointment.
The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself.
The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan potentially pays 100% of the costs of covered benefits. The out-of-pocket limit doesn’t include your monthly premiums. It also doesn’t include anything you spend on services your plan doesn’t cover.
The amount you pay for your health insurance every month.
Coinsurance, Copay, Deductible, Out-of-Pocket Maximum, and Premium In Action: Jason is working on climbing every fourteener in Colorado and just as he was summiting Mount Evans he fell and broke his leg and collarbone. Jason pays a $1000 premium each month that ensures he has health insurance. When he falls, he is taken to the emergency room and pays a $500 copay while they treat his injuries. The $500 counts toward his $2000 deductible and his $4000 out-of-pocket maximum. In the emergency room, he learns that he will need outpatient surgery for his collarbone. The surgery will cost $5000. Jason will pay $1500 to meet his deductible, leaving $3500 due. According to his plan, he will also owe 20% coinsurance on any services until he reaches his out-of-pocket maximum of $4000. This leaves him paying an additional $700 on the surgery (20% of the $3500 balance for the surgery). Overall, Jason’s total out-of-pocket expenses for his fall on Mount Evans is $2700 – not including the $1000 premium he pays each month for his insurance plan.