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Terms Of Medical Insurance

• Deductible - The fixed amount you have to pay before your insurance starts to pay.
• Co-insurance - A Percentage of the claim your health insurance pays. You insure payment to the provider and the health insurance pays a portion.
• Co-insurance limit - The dollar amount you have to pay with Co-insurance before the insurance company begins paying your bills at 100% for the remainder of the plan year.
• Out Of Pocket Maximum - The total dollar amount paid out by a subscriber (deductible plus coinsurance).
• Co-pay - A fixed fee you pay for services rendered. Most plans cover 100% after the co-pay for services rendered, however this can be adjusted to any amount depending on how the plan is set up.
• Life time maximum - The total your policy will pay out. Many plans have a yearly restoration amount which will replenish the total so that after the policy money is exhausted there will still be some money in the following plan year for new claims.
• Co-ordination of benefits or COB - How your plan pays when it is second to another plan. There are three principle methods in US health plans.

1. Maintenance of benefits - If the other plan pays the same amount or greater than your plan, then your plan pays nothing. If the other plan pays less, your plan pays only the difference between what it would have paid and what the other did pay.
2. 100% allowable - The secondary plan pays the patient responsibility up to the full allowed amount by the plan.
3. Government Exclusion - In general these plans take the patient responsibility remaining from the primary plan and treat it as a brand new claim and pay it under the normal plan benefits.

• Self-Insured - Many major U.S. and world corporations hire insurance companies as administrators to manage a pool of money held by the company. Many state and federal laws do not apply to these plans.
• Fully Insured - The insurance company collects the premiums and pays claims from its own money.
• Most insurance plans deal with networks of doctors. If for example you have an HMO plan that allows you to see any HMO provider anywhere in the country, it is called Full Reciprocity, but if it only allows you access to local area networks of providers it is called Limited Reciprocity and if you can only go to select networks that your company has purchased access to, it is called No Reciprocity.
• Experimental/Investigational - Most insurance companies will deny coverage for any procedures or tests which have not been medically verified by clinical trials conducted by recognized bodies of physicians or scientists. Many medical providers use tests which they believe in but have not been clinically validated.
• No-fault - This is generally for automobile insurances, however if your auto policy is no-fault and you are injured, the medical insurance will become a secondary payor and will not be able to process claims until explanation of benefits are received from the auto insurance carrier.
• The Birthday rule - many insurance companies have adopted this rule to determine which parent is primary payor when both parents cover the same dependants. Who ever has the earlier date of birth, excluding the year, is designated primary insurance carrier. Exceptions to this rule usually arise when there is a court order for one of the parents to be the primary carrier.
• Subscriber - The primary member on the insurance policy.
• In-Network/Participating/Par Providers - Medical providers who have an established relationship with an insurance company
• Out-of-Network/Non Participating/Non-Par Providers - Medical providers without an established relationship with an insurance company.