Health Insurance 101

Understanding health insurance is not an  easy task. Many Americans are confused by the terms, how their benefits work, which doctors and hospitals they can see, what type of coverage they have, what’s included in their coverage, etc. Last year, a report by the American Institute of Certified Public Accountants revealed that more than half of Americans surveyed could not explain common health insurance terms including premium, co-pay, deductible, etc.

Typically, Americans choose health plans based on preferred doctors they want to see or based on which plans provide the most coverage for the health benefits they are seeking. If an individual does not have a specific health need, they usually just pick the most affordable plan with what they think is “good coverage.” Today, network provider coverage is much more limited in order to keep costs down.

To help you better understand your benefits, we’re breaking down the five main insurance terms you need to know in today’s lesson of “Health Insurance 101”:

  • Deductible: The amount of expenses you pay out of pocket before an insurance provider will pay for any of the expenses.
  • Co-pay: A fixed cost for a service. This is typically the amount you pay when you visit your regular physician (not a specialist) for help.
  • Premium: The amount you pay each month, quarter, or year to the insurer to obtain health insurance.
  • Preventive Care: All health plans have certain services they cover known as “preventive care” which include some immunizations, cholesterol screening, blood pressure screening, many cancer screenings, and more. These services do not require you to pay any out of pocket costs or require that you meet your deductible before seeking attention.
  • HMO/PPO: An HMO plan limits the number of in-network providers you can seek but usually for a more affordable cost. To seek an out of network provider, one must have a note from their physician first. A PPO plan has more flexible benefits and usually more providers. However, the cost of a PPO plan is generally higher than that of an HMO plan.


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