Both health and life insurance are a vital part of what keeps our physical and financial well-being in order, yet many people don’t know the basics of what insurance is or what common terms mean. Shopping for insurance is overwhelming enough without having to guess at those terms. We’re here to demystify some of the most common insurance phrases you hear to make the process a bit less daunting and help you make better informed decisions.
Health Insurance Terms
Health insurance is a system where a government agency runs programs (CMS,HHS), company or employer, agrees to pay some percentage of your medical and surgical costs. This is not the same as life insurance, but we’ll get to that too. Some terms to know:
Deductible: Present in most insurance forms, a deductible is certain amount of money that you must pay before your insurance company will pay for the rest.
Co-Payment: This is a payment you make in addition to what you pay for insurance and what your insurer pays out. For example, your copayment would be the $40your insurance pays $60 for your doctor’s visit if total cost is $100.
Coinsurance: A common coinsurance percentage is 20%, meaning your insurance company pays 80% of your costs. Oftentimes, once you have reach your deductible before they will pay any amount on your bills , your insurance company will still only pay part of your expenses and you will have to pay the rest,
Preferred Provider Organization (PPO): This type of insurance allows you to visit any physician within a network without getting a referral from a primary care physician. The drawback to this is that you will see much higher rates if you visit a physician or hospital that is out of network. Your insurance will likely cover much less when going out of network but they still will be paying something on your bills , Some of visits to out-of-network facilities charges can be reduced 50% of covered charges .
Health Maintenance Organization (HMO): Unlike a PPO, an HMO gives you less choice as to who you see and you will likely have to choose a primary care physician. You will have lower premiums (the amount you pay to be insured) with an HMO, but it can be more difficult to see a specialist and out-of-network physicians and facilities will result in higher charges.
Point of Service (POS): In a POS system, you choose a primary care physician who becomes your point of service in the network. This POS can refer you to doctors in or out of the network with varying percentages covered by the plan. The patient might be responsible for some paperwork and sending in bills that need to be covered. A POS can have lower costs, but there can be more stress involved in getting claims paid for.Some Health insurance plans offer HMO with POS options
If you’re still struggling to choose a health or life insurance plan, contact the experts at Arbor Creek Financial. When you call us, our trained representatives will walk you through all your insurance options. We’re well versed in each of our insurance offerings and will ensure that you get the plan that works for you and your loved ones. Contact our offices in Fort Wayne, Indiana today at 1-866-462-6526.