We all know that we need healthcare coverage. But a lot of us don’t know much beyond that. Really, it isn’t our fault. This is an industry full of very specific terminology, complex policy language, and gobbledygook jargon.
What exactly does all this stuff mean? Do most people really even know? Or are they just pretending and faking it to sound smart?
If you’ve ever found yourself asking these questions, don’t worry. You are not alone. Millions of other people don’t understand all these terms and phrases either.
Frankly, if you tried to learn them all, you wouldn’t have time for anything else. So it isn’t actually necessary to become the world’s foremost expert. Yes, the more info you have, the easier it will be to get the absolute best health insurance for your needs. But if you just start by learning the following six key terms, you will be able to obtain great coverage for the first time or switch to a new plan that works for you.
In practical terms, premium is another word for price. This is how much you will pay at regular intervals, usually every month, to maintain a policy and continue having coverage under any health insurance plan. For most people, it is the biggest cost factor to consider.
Within most health insurance plans, you are responsible for paying some initial costs each year — up to a point. This amount is known as a deductible. If you coverage has a $1,000 annual deductible, for example, this means that you will personally have to pay for the first $1,000 before your coverage kicks in to pay for anything above that (as long as it’s covered by the policy). Some plans have no deductibles, but these are less common and usually come with higher premiums.
A copayment is the charge you incur for certain services even after your deductible is met. It is typically a relatively small fee, such as $30 for each doctor’s visit and perhaps twice that figure to see a specialist. Copays are often referred to as “out-of-pocket” costs and mean that you typically pay more if you seek care more often.
4. Enrollment Period
Most health insurance providers have certain times — sometimes only once per year — when you can obtain a policy, switch plans, or make substantial changes to your current coverage. These enrollment periods, or open enrollment periods, can differ from plan to plan. Some will be based upon the calendar and allow you to enroll in the fall, for example, while programs like Medicare have an enrollment period surrounding your 65th birthday.
Some types of plans are only available to certain groups. This can be based upon factors like your location or demographic. Medicare eligibility, for example, is typically reserved for U.S. citizens and certain other residents who are at least 65 years old or who have been diagnosed with specific chronic conditions like amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease) and end-stage renal disease (ESRD).
6. Medicare Advantage
While everyone eligible for Medicare can enroll in what is known as Medicare Part A and Part B — the two components of “Original Medicare” — there are also supplemental coverages offered by a range of leading providers. These are often called Medicare Advantage plans and fall under Medicare Part C and Part D. In addition to offering patients access to more doctors across a wider network, many Medicare Advantage plans allow you to see a specialist directly without a referral and cover the full cost of pharmaceuticals.
Knowing is Half the Battle
Health insurance can be confusing. There will always be some things that we don’t understand. If we’re being honest, even the people who write the policies might not know it all. But the important thing to remember is to not get bogged down in all the details.
The biggest factors to consider before obtaining any plan are the ones that will affect your coverage the most. For most people these will be the cost considerations, including premiums, deductible, and copays, as well as key policy terms like eligibility, enrollment periods, and supplement coverage options in the form of Medicare Advantage plans.
You should always try to know as much as possible about your plan before you actually sign the paperwork and enroll. If might help to talk to an expert in the field. But if you start by comparing these headline factors as you look for the right plan, you will be able to start narrowing down your options and find one that is best for you.