Insurance glossary

Premium - the amount of money you pay to an insurance company for coverage, typically billed monthly or annually. 

Copay (copayment) - a fixed amount you pay for a specific healthcare service, usually at the time of the service. Copays are often required for routine services like doctor visits, prescription medications, or specialist consultations. Copays do not accumulate toward your deductible.  

Coinsurance - the percentage of costs you pay after meeting your deductible, usually shared with your insurer (e.g., 20% coinsurance means you pay 20% of the costs).

Deductible - the amount an insured individual pays out-of-pocket for healthcare services before your health insurance begins to cover the costs. There are several types of deductibles in insurance:

• Individual Deductible: The amount an individual must pay before insurance coverage kicks in.

• Family Deductible: The total amount a family must pay collectively before the insurance begins to cover costs.

• Embedded Deductible: In a family plan, each member has their own individual deductible, and once one member meets theirs, the plan starts covering their costs.

• Aggregate (Non-Embedded) Deductible: A single deductible amount that applies to the entire family, meaning all family members contribute to this total.

• High Deductible: A plan with a higher-than-average deductible, often associated with Health Savings Accounts (HSAs).

• Low Deductible: A plan with a lower deductible, usually resulting in higher premiums but less out-of-pocket expense at the time of care.

• Per-Visit Deductible: A specific deductible amount that must be met for each healthcare visit or service.

Out-of-Pocket Maximum - the maximum amount an insured individual is required to pay for covered healthcare services within a policy year. Once this limit is reached, the insurance plan covers 100% of eligible expenses for the remainder of the year, excluding monthly premiums.

Network - a group of doctors, hospitals, and other healthcare providers that an insurance company has contracted with to provide services at reduced rates.

Pre-Authorization (Precertification) - approval from your insurer before receiving certain services or medications to ensure coverage.

Claim - a request for payment from your insurer for services received.

Lifetime Limit - the maximum amount your insurance will pay for covered services over your lifetime.

Preventive Care - services aimed at preventing illnesses, such as vaccinations and screenings, often covered in full without a deductible or copay.

Referral - a recommendation from a primary care doctor to see a specialist.

Formulary - a list of prescription medications covered by your insurance plan, often categorized by cost.