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10 Important Health Insurance Terms & Definitions

Understanding Your Medical Insurance Plan & Company Health Benefits

An updated glossary of essential health insurance terms based on the article “Understanding Your Health Insurance Plan” by Financial Specialist David Jaramillo in the February 2015 issue of Lane Fertility Magazine.

So you landed a thrilling new job with a thriving business, earned access to a company health insurance plan, and want to learn the basics of your newfound medical benefits. This is the perfect place to start! To help you learn how to make the most of your medical insurance coverage, we created a glossary of the 10 most essential health plan terms and definitions.

Your health insurance plan may have slightly different descriptions of the terms listed below, and the friendly, knowledgeable team at Lane Fertility Institute is here to answer any specific questions you may have. The following definitions are meant to be educational, covering the common terms used throughout the world of modern medical insurance.

10 Important Health Insurance Terms & Definitions

1) Employer Waiting period

The waiting period is the length of time that an employer will make a new hire wait before the employee is eligible for coverage access under the company's health insurance plan. During the waiting period, a policy decision is often made regarding whether or not the medical insurance provider will pay benefits for specific pre-existing conditions.

2) Health Insurance Co-pay

A co-payment is a fixed amount that the insured is required to pay at the time healthcare benefits are provided or medical services are rendered under your insurance plan. This is usually required for basic physician visits.

3) Coinsurance

Medical co-insurance is typically a percentage amount that indicates the insured’s fiscal responsibility after a deductible has been paid. A common coinsurance split is 80/20, meaning the insurance company will pay 80% of the healthcare service cost while the insured is required to pay the final 20%.

4) Health Insurance Deductible

A health insurance deductible refers to the amount of money that the insured employee must pay annually before any medical benefits from the policy can be accessed. Some basic health services may be allowed with a copayment before the yearly deductible is paid, but this will vary with each specific medical insurance plan.

5) Out-of-Pocket Medical Expenses

An “out-of-pocket” expense is the amount one must pay out of their own pocket for any medical care provided under their new health insurance plan. This can refer to how much the co-payment, coinsurance, or deductible will be for any given health services. When the term “annual out-of-pocket maximum” is used in any health insurance plan, it refers to the highest amount an insured will have to pay  (excluding policy premiums) for the calendar year.

6) Lifetime Maximum

A lifetime maximum is the total amount of money the health insurance policy will pay towards certain medical services. For example, your plan could specify that infertility treatment is not to exceed $2,000.00 per lifetime.

7) Health Insurance Portability and Accountability Act (HIPAA)

A federal law enacted in 1996 that protects the privacy of health information and the confidentiality of medical documents. HIPAA applies to health insurance plans, healthcare clearinghouses, and medical professionals. This legislation is intended to help you maintain the privacy of your healthcare and improve the security of your medical information.

8) Coordination of Medical Benefits

This will occur if the insured has access to two or more health insurance plans that both provide coverage for specific medical conditions. When healthcare treatment is provided, both plans are billed and must coordinate payment between a “primary” and “secondary” medical insurance plan.

9) Health Provider Networks

Most medical insurance plans come with predetermined healthcare service providers that have made a prior deal to provide services at discounted rates. By working together, these medical service providers make up what is known as the plan’s “Health Provider Network.”

10) Prior Authorization

Most health insurance plans require review and authorization for specialist medical services like fertility treatment. Prior authorization must be obtained before the health service is rendered or your claim will be denied and you would be liable for the entire cost of the procedure.

These 10 definitions are simply the most common, basic tenets of understanding your health insurance plan, medical benefits, and policy coverage. If you are considering fertility care or infertility treatment, it is particularly helpful to understand the nuances of your specific medical insurance plan. In order to maximize your coverage and minimize any unexpected costs associated with health services provided by specialists, contact us for personal assistance provided by an experienced professional.

Dr. Danielle Lane Danielle E Lane, MD, Reproductive Endocrinology and Infertility Specialist

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