Confused by Health Insurance? Let Us Provide Some Common Definitions to Help!

crosbyandcrosbyfacebookAt Crosby & Crosby Insurance Services we understand health insurance can be complicated.  There are so many abbreviations and codes used it can be a full-time job just to keep up with the constant changes. 

Here are a couple of definitions that we get asked about most often:

Coinsurance -

  • A form of medical cost sharing in a health insurance plan that requires an
    insured person to pay a stated percentage of medical expenses after the deductible
    amount, if any, was paid.
  • Once any deductible amount and coinsurance are paid, the insurer is responsible
    for the rest of the reimbursement for covered benefits up to allowed charges: the
    individual could also be responsible for any charges in excess of what the insurer
    determines to be “usual, customary and reasonable”.
  • Coinsurance rates may differ if services are received from an approved provider
    (i.e., a provider with whom the insurer has a contract or an agreement specifying
    payment levels and other contract requirements) or if received by providers not
    on the approved list.
  • In addition to overall coinsurance rates, rates may also differ for different types
    of services.

Co-payment -

A form of medical cost sharing in a health insurance plan that requires an
insured person to pay a fixed dollar amount when a medical service is received. The
insurer is responsible for the rest of the reimbursement.

  • There may be separate co-payments for different services.
  • Some plans require that a deductible first be met for some specific services
    before a co-payment applies.

Deductible -

A fixed dollar amount during the benefit period – usually a year – that an
insured person pays before the insurer starts to make payments for covered medical
services. Plans may have both per individual and family deductibles.

  • Some plans may have separate deductibles for specific services. For example, a
    plan may have a hospitalization deductible per admission.
  • Deductibles may differ if services are received from an approved provider or if
    received from providers not on the approved list.

Health maintenance organization (HMO) -

A health care system that assumes both
the financial risks associated with providing comprehensive medical services
(insurance and service risk) and the responsibility for health care delivery in a
particular geographic area to HMO members, usually in return for a fixed, prepaid
fee. Financial risk may be shared with the providers participating in the HMO.

Maximum out-of-pocket expense -

The maximum dollar amount a group member is
required to pay out of pocket during a year. Until this maximum is met, the plan and
group member shares in the cost of covered expenses. After the maximum is reached, the
insurance carrier pays all covered expenses, often up to a lifetime maximum.

Point-of-service (POS) plan -

 A POS plan is an “HMO/PPO” hybrid; sometimes
referred to as an “open-ended” HMO when offered by an HMO. POS plans resemble
HMOs for in-network services. Services received outside of the network are usually
reimbursed in a manner similar to conventional indemnity plans (e.g., provider
reimbursement based on a fee schedule or usual, customary and reasonable charges).

Preferred provider organization (PPO) plan -

An indemnity plan where coverage
is provided to participants through a network of selected health care providers (such
as hospitals and physicians). The enrollees may go outside the network, but would
incur larger costs in the form of higher deductibles, higher coinsurance rates, or non-discounted
charges from the providers.
For additional definitions please see http://www.bls.gov/ncs/ebs/sp/healthterms.pdf

Contact Crosby and Crosby to help with your health insurance needs.

If you have any questions or would like Crosby & Crosby’s help in finding you or your family health coverage please call us at 661-327-5531, complete a quote online, email our health department at benefits@crosbyandcrosby.com, or stop by our office at 111 H Street. 

Crosby and Crosby Insurance Services offers health insurance plans through great carriers like, Anthem/Blue Cross, Blue Shield, Aetna and Kaiser. We have been helping families in Bakersfield and throughout Kern County since 1963!

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