Understanding Health Insurance No single plan will cover all costs associated with medical care, but some cover more than others.
Common Terms and Definitions
Copay: A fixed dollar amount you pay at the time services are rendered. Typical copays are for office visits, prescriptions, or hospitalizations.
Coinsurance: A specified percentage of the cost of treatment the insured is required to pay for all covered medical expenses remaining after the deductible has been met.
Deductible: The portion of your health care that you pay before insurance starts covering it. Typically, the higher the deductible, the lower the premiums.
Pre-existing condition: An illness, disease or condition an individual has at the time of enrollment in a health care plan. Pregnancy is not a pre-existing condition.
Premiums: The monthly or quarterly payments paid for health insurance.
Catastrophic coverage: This plan pays hospital and medical expenses above a certain (usually high) deductible. The maximum lifetime limit may be high enough to cover the cost of a catastrophic illness.
Long-term care policies: These cover medical care, nursing care and certain in-home care if you ever become unable to care for yourself due to an extended illness or disability.
Disability income insurance: This plan will provide you with an income if you become unable to work due to an injury or illness. Benefits are usually 60% of your income at the time of disability.
