Many of the terms used regarding health insurance that may cause confusion, beginning with the term “Affordable” in the Affordable Care Act that has actually increased patients' financial responsibility toward healthcare. Whether you are helping a grown niece or nephew sort out their health insurance decisions at their first job, or working on your own, this cheat-sheet of common health terms will help.

Premiums: The monthly amount billed by the health insurance companies.  Employers may pay a portion or in full, leaving the rest of the monthly premium responsibility to the employee.

Copay: The amount paid directly to the doctor’s office or pharmacy at your office visit.

In-network vs. out of network:  An in-network physician participates in your insurance plan and the ultimate fee for the service is determined by the insurance company.  Certain, in-network plans required a referral to be obtained by your primary care physician prior to seeing a specialist (like a plastic surgeon). An out-of-network physician does not participate in your insurance and may charge their chosen service fee.

Deductible: A deductible is the annual amount that the patient is directly responsible for their medical service. Each year, deductibles may change (increase) and different deductibles apply towards in-network vs. out-of network doctors. Most deductibles are for the calendar year but some plans may have a different annual anniversary.

Coinsurance: The percentage of the medical bill the patient is again directly responsible.  The insurance may pay 80% (i.e. Medicare) then you are responsible for the remaining 20% directly to the physician.

EOB (Explanation of Benefits) - The EOB details the billed amount from the physician, the amount the insurance pays and the patient responsibility in the form of copay + deductible + coinsurance.

Additional financial patient responsibilities:

-    Emergency room fee

-    Hospital fee / facility fee for ambulatory surgery

-    Of course, all cosmetic surgery and procedures

To find out one's individual responsibly for copay, co-insurance, deductible, and hospital facility fees, call the individual health insurance plan. Remember, benefits may change each year depending on changes made to your insurance plan. 

Published: October 15, 2014