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Frequently used insurance terms

  • Provider: Doctors, physicians, persons who treat you.
  • Deductible: The first dollar amount that has to be paid by the patient. The cost is applied annually.
  • Copay: The specific dollar amount or percentage that the patient must pay when covered services are provided.
  • Coinsurance: The percentage of the total medical bill the patient is responsible for paying. The insurance will cover the rest.
  • Maximum Out-of-Pocket: The highest amount a health plan member is required to pay for covered services outside of his/her benefits plan. Once the member reaches the out-of-pocket maximum, the plan pays 100% of expenses for covered services.
  • Inpatient Care: Service provided after a patient is admitted to the hospital. Inpatient care lasts 24 hours or more.
  • Outpatient Care: Care provided in a clinic, emergency room, hospital or non-hospital surgical center, without admitting the patient.
  • Referral: Specific directions or instructions from the patient's primary care physician that direct him or her to a participating health care professional for medically necessary care.
  • Pre-existing condition: A medical problem that was diagnosed or treated during a specified time before enrollment in a new insurance plan. Some pre-existing conditions may be excluded from coverage during a specified time after the effective date of coverage in a new plan. Typical waiting period is 6 months.
  • Preferred care provider or In-network: Any doctor, hospital, skilled nursing facility, other individual or entity involved in delivering health care services that contracts with the insurance company to provide covered services for a lower price.
  • Nonparticipating Provider (also known as Out-of-Network or Nonpreferred Care Provider: Health care professionals that have not contracted with a health plan to provide services at a lower or reduced price.