Understanding Health Insurance Terminology in the US Key Terms Every Foreigner Should Know

Navigating the complex world of health insurance can be overwhelming, especially for foreigners who are new to the US healthcare system. Understanding the key terminology is important for making the right decision about health insurance coverage. By familiarizing yourself with health insurance terms, you can better understand your policy, benefits, and rights as a healthcare consumer. Read on.

Some of the Popular Health Insurance Terminology:

Premium

A premium refers to the amount of money that an individual or entity pays to an insurance company in exchange for insurance coverage. It is typically paid regularly, such as monthly, quarterly, or annually, depending on the insurance policy terms. The premium amount is determined by several factors, including the type of insurance coverage, the level of coverage desired, the risk profile of the insured, and any additional factors considered by the insurance company. Paying the premium ensures that the insurance policy remains active and provides the policyholder with the coverage and benefits outlined in the policy terms. The premium for visitor insurance plans is calculated based on the age, the number of days coverage is needed, the policy maximum, and the deductible opted for. The premium is usually paid upfront for the number of days you apply for.

Deductible

A deductible is the specific amount of money that an insured individual must pay out of their own pocket before their insurance coverage kicks in and begins to cover eligible expenses. It is a predetermined amount set by the insurance policy and can vary depending on the type of insurance coverage. For instance, if a policy has a $1,000 deductible, the insured person is responsible for paying the first $1,000 of covered medical expenses. Once the deductible is met, the insurance company starts sharing the cost of covered services. The deductible for visitor insurance plans can be annual, where you must meet it only once on the policy, or it can be per injury/sickness where the deductible must be met for every new injury/illness you go to the doctor for.

Copayment

A copay or copayment is a fixed amount of money that an insured individual is required to pay at the time of receiving a specific healthcare service or prescription medication. It is designed to share the financial responsibility between the insurance company and the insured individual, making healthcare costs manageable. For example, a health insurance plan may require a $20 copay for a doctor’s office visit. If the bill is $200, you need to pay $20, and the rest $180 will be managed by the insurance company. The copay amount remains constant regardless of the actual cost of the service or medication.

Coinsurance

Coinsurance refers to the portion of healthcare expenses that an insured individual is responsible for paying after meeting their deductible. It is a cost-sharing arrangement between the insurance company and the insured. Coinsurance is typically expressed as a percentage, such as 20% or 30% and applies to covered services or treatments. For example, if the insurance policy has a 20% coinsurance rate and a covered medical service costs $100, the insured person would pay $20, while the insurance company would cover the remaining $80.

Out-of-Pocket Maximum

The out-of-pocket maximum is the maximum amount you will pay for covered medical services during a policy period. Once you reach this limit, your insurance company will typically cover 100% of the remaining costs. It is essential to review your policy to understand what expenses count towards the out-of-pocket maximum, as not all costs may be included.

Network

A Preferred Provider Organization (PPO) network is a group of healthcare providers, including doctors, hospitals, and specialists, that have contracted to provide services at negotiated rates to the policyholders. PPO networks offer a broad range of medical professionals and facilities for policyholders to choose from. The advantage of using providers within the PPO network is that the insurance company typically covers a larger portion of the costs, resulting in lower out-of-pocket expenses for the policyholder. However, policyholders also can seek care outside the network, although this may result in higher costs.

Pre-existing Condition

A pre-existing condition refers to a health condition that existed before the start of a new insurance policy. Visitor insurance plans typically do not cover pre-existing conditions, and rather, these policies offer coverage for an acute onset of the pre-existing conditions. Acute onset refers to the condition that has flared up and needs immediate medical attention within 24 hours.  Some student plans may provide pre-existing coverage, but there may be waiting periods before coverage for pre-existing conditions starts.

Policy maximum

The policy maximum refers to the maximum amount of money that an insurance policy will pay for covered expenses within a specified period. It is the upper limit of financial protection provided by the insurance policy. For example, if the policy maximum is set at $1 million, the insured individual receives coverage up to $1 million. Once the total claims reach this limit, the insurance company will no longer provide coverage for additional expenses.

Claim

A claim refers to a formal request made by an insured individual or a healthcare provider to an insurance company for reimbursement of covered medical expenses. When an insured individual receives medical services or treatment covered under their health insurance policy, they can submit a claim to the insurance company to seek reimbursement for the expenses incurred. The claim typically includes detailed information about the services received, such as the healthcare provider’s name, date of service, and associated costs. The insurance company reviews the claim and processes the reimbursement accordingly.

Conclusion

Understanding health insurance terminology is vital for foreign individuals seeking coverage in the US. Becoming familiar with key terms will help you to make the right decision about your health insurance coverage. Take the time to review and understand your policy, ask questions to your insurance provider, and seek assistance from a healthcare professional or insurance expert if needed.

For more information, you can contact Visitor Guard®.