Health insurance is a contract between an individual and an insurance company that provides coverage for medical expenses incurred by the insured, such as doctor visits, hospital stays, and medications. It helps individuals manage the financial risk of healthcare expenses by paying a premium in exchange for coverage.
The amount of money paid by the insured to the insurance company at regular intervals (often monthly) to maintain health insurance coverage. Premiums can vary based on factors such as age, health status, and coverage options.
The amount of money that the insured must pay out-of-pocket for covered medical expenses before the insurance company starts to cover costs. Deductibles can vary depending on the insurance plan and may reset annually.
A fixed amount that the insured pays for covered healthcare services, typically due at the time of service. Co-pays are predetermined by the insurance plan and can vary for different types of services.
The percentage of covered medical expenses that the insured is responsible for paying after the deductible has been met. For example, if the coinsurance is 20%, the insured pays 20% of the covered costs while the insurance company covers the remaining 80%.
The maximum amount of money that the insured is required to pay for covered medical expenses during a specific period, typically one year. Once the out-of-pocket maximum is reached, the insurance company covers 100% of covered costs.
A group of healthcare providers, such as doctors, hospitals, and clinics, that have contracted with an insurance company to provide services to insured individuals at discounted rates. Staying within the network often results in lower out-of-pocket costs for the insured.
A health condition that existed before the individual enrolled in a health insurance plan. Prior to the Affordable Care Act (ACA), insurers could deny coverage or charge higher premiums based on pre-existing conditions. However, the ACA prohibits this practice.
A specific period during which individuals can enroll in or make changes to their health insurance coverage for the upcoming year. AEP typically occurs once a year and may vary depending on the type of health insurance plan.
A tax-advantaged savings account that individuals can use to pay for qualified medical expenses. HSAs are available to individuals who have a high-deductible health plan (HDHP).