Module 2: Health Insurance
In this section we will look at:
- How insurance works
- Health insurance payers and plans
- Uninsured patients
Before we go on, it will help to know a few health insurance definitions:
Health Insurance Definitions
- Claim: A request for payment submitted by the doctor or hospital to the health insurer.
- Copayment (Co-pay): A fixed amount a patient pays for a doctor's visit or for prescription medication. For example, if the co-pay is $20 for doctor visits and prescriptions, the patient pays $20 each time they see the doctor. They also pay $20 for each prescription drug they get or refill. The insurance company also pays the provider. The amount they pay is negotiated under a contract.
- Deductible: The amount a patient pays each year before the insurance company starts covering costs. For example, if the deductible is $1,000, the patient must pay all medical expenses up to $1,000 each year before the insurance company begins to pay their portion.
- Premium: The amount paid for insurance each month.
- Primary Care Provider (PCP): The primary care doctor who a patient goes to first. PCP's oversee a patient's general health healthcare.
- Referral: Permission given by a doctor for a patient to see a specialist.
See more health insurance definitions
See HealthCare.gov Glossary for definitions of other terms
- Claim: A request for payment submitted by the doctor or hospital to the health insurer.
- Co-insurance: The percentage of the medical expenses a patient must cover after paying the deductible.
- Copayment (Co-pay): A fixed amount a patient pays for a doctor's visit or for prescription medication. The insurance company pays the rest. For example, if the co-pay is $20 for doctor visits and prescriptions, the patient pays $20 each time they see the doctor. They also pay $20 for each prescription drug they get or refill.
- Deductible: The amount a patient pays each year before the insurance company starts covering costs. For example, if the deductible is $1,000, the patient must pay all medical expenses up to $1,000 before the insurance company begins to pay their portion.
- Exclusions: Services that the insurance company will not cover. Common exclusions are dental care, vision care, cosmetic surgery, alternative medicine (like acupuncture or massage), some medications and some hospital costs.
- Pre-existing conditions: A medical condition that a patient has when they sign up for health insurance.
- Premium: The amount paid each month for insurance by an individual or an employer.
- Lifetime Limit: A cap on the total lifetime benefits you may get from your insurance company. For example, if an insurance plan has a $1 million lifetime cap, the patient must pay anything over $1 million. There can also be a cap on specific benefits, like a $200,000 lifetime cap on organ transplants).
- Out-of-Pocket Costs: Healthcare expenses that are not paid by insurance. Out-of-pocket costs include deductibles, co-pays, coinsurance and costs not covered by insurance.
- Out-of-Pocket Limit: The maximum amount of healthcare expenses a patient will have to pay in a year. This usually includes deductible, coinsurance, and copayments.
- Pre-Existing Condition (individual Policy): A condition, disability or illness a patient has before they enroll in an insurance plan.
- Primary Care Provider (PCP): The primary care doctor who a patient goes to first for medical treatment. PCP's oversee a patient's general health healthcare.
- Referral: Permission given by a doctor for a patient to see a specialist.
- Waiting Period (job-based coverage): The time that must pass before insurance coverage begins.