Nov 30, 2023

Decoding Healthcare Jargon: A Simple Guide to Insurance Terms 

happy couple in a medical office speaking with a doctor

    Decoding Healthcare Jargon: A Simple Guide to Insurance Terms 


    In the complex world of healthcare, navigating the sea of insurance terms can feel like deciphering a foreign language. From copays to deductibles, HMOs to PPOs, understanding the intricacies of health insurance is crucial for making informed decisions about your well-being. Fear not, as we embark on a journey to unravel the mysteries of healthcare lingo and empower you with the knowledge needed to navigate the insurance landscape. 

    Below, we discuss ten common terms in healthcare and what they mean. 


    1. Annual Maximum:

    Let’s kick things off with a term that often leaves people scratching their heads—the Annual Maximum. Within your dental plan, this refers to the maximum amount your insurance plan will fork out toward your claims within a calendar year. Knowing this limit is vital for budgeting your oral expenses and planning accordingly. 


    1. Co-Insurance:

    Once the deductible is out of the way, you may encounter co-insurance. This is your percentage share of the cost for a covered healthcare service. In simpler terms, it’s the amount you and your insurance split after you’ve paid your deductible. 


    1. Deductible:

    Speaking of deductibles, this is the specific amount of money you need to pay for covered healthcare services before your insurance plan kicks in. Think of it as your financial threshold—the hurdle you clear before your coverage becomes active. 


    1. Copay:

    A term that’s more familiar but still deserves a spotlight is the copay. This is the fixed dollar amount you pay for an office visit with a physician or for a prescription. Copays are for services that do not apply to the deductible but do apply to the out-of-pocket maximum (see below). It’s a predictable cost that helps you plan your medical expenses. 


    1. Elective vs. Non-Elective:

    “Elective” treatment pertains to planned, non-emergency procedures chosen by patients, such as cosmetic surgeries, while “non-elective” refers to urgent, often emergency interventions like trauma care. The classification influences insurance coverage, with elective procedures potentially requiring pre-authorization and varying coverage terms, whereas non-elective procedures are generally covered, emphasizing prompt and necessary care. 


    1. Out-of-Pocket Maximum:

    Ever wondered about the maximum amount you could pay in a calendar year for in-network covered healthcare services? That’s your out-of-pocket maximum—a crucial figure to be mindful of when planning your healthcare budget.  


    1. HMO (Health Maintenance Organization):

    HMOs, or Health Maintenance Organizations, bring us to the concept of a primary care physician (PCP). With HMOs, you must choose a PCP from their designated network. A PCP referral is necessary for specialty services, ensuring a streamlined approach to your healthcare. HMOs have smaller mainly local provider networks called Medical Groups or Independent Provider Associations (IPA). 


    1. PPO (Preferred Provider Organization):

    Contrasting with HMOs, Preferred Provider Organizations (PPOs) grant you the flexibility to have a larger, often nationwide network of providers with some limited coverage for out-of-network providers.  


    For more on HMOs and PPOs, view our helpful video here. 


    1. In-Network vs. Out-of-Network:

    “In-network” refers to healthcare providers and facilities that have contracted agreements with your insurance company, often resulting in lower costs, depending on your plan. “Out-of-network” pertains to healthcare providers not under contract with the insurance company, so you might end up with higher out-of-pocket expenses as your plan may not cover as much. It’s important to check with a provider to know if your insurance will be accepted before receiving care. 


    1. UCR (Usual, Customary, Reasonable):

    Lastly, UCR, or Usual, Customary, or Reasonable, is a term that comes into play when dealing with out-of-network claims. If your plan covers the 90th% UCR charge, it means your claim is based on what 9 out of 10 local providers charge. Be aware that you’re responsible for 100% of any charges not covered by your plan which can be significant. 


    Armed with this simplified glossary, you’re now better equipped to navigate the often-perplexing world of healthcare lingo. Remember, knowledge is power, and understanding these terms puts you in the driver’s seat of your healthcare journey. 

    For questions or more information, you can reach out to our Advocacy team any time or check out our other resources in our Benefits Resource Library. 

    What "covered" should feel like.

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