Understanding Louisiana Health Insurance Terms

Understanding Health Insurance Terms

Coinsurance - The amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. The coinsurance rate is usually expressed as a percentage. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.

Coordination of Benefits - A system to eliminate duplication of benefits when you are covered under more than one health plan. Benefits under the two plans usually are limited to no more than 100 percent of the claim.

Copayment - Another way of sharing medical costs. You pay a flat fee every time you receive a medical service (for example, $5 for every visit to the doctor). The insurance company pays the rest of the expense.

Covered Expenses - Most insurance plans, whether they are fee-for-service or HMOs, do not pay for all services. Some may not pay for prescription drugs; others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy. (Also see "Customary Fees")

Creditable Coverage Certificate - The certificate of insurance history is intended to establish an individual's prior creditable coverage for purposes of reducing the extent to which a new health plan can apply a preexisting condition exclusion. The certificate of creditable coverage is a written document that reflects certain details about an individual's prior health coverage, including the dates that the individual was covered.

Deductible - The amount of money you must pay each year to cover your medical care expenses before your insurance policy starts paying for a medical claim.

Exclusions - Specific conditions or circumstances for which the policy will not provide benefits.

HMO (Health Maintenance Organization) - Prepaid health plans. You pay a monthly premium and the HMO covers your doctors' visits, hospital stays, emergency care, surgery, checkups, lab tests, x-rays and therapy. You must use the doctors and hospitals designated by the HMO.

Managed Care - A health plan that uses managed care arrangements and has a defined system of selected providers that contract with the plan. It is a way to manage costs and use while maintaining the quality of the health care system. All HMOs and many fee-for-service plans have managed care features. Individuals have a financial incentive to use participating providers that agree to furnish a broad range of services to them. Providers may be paid on a prenegotiated basis.

Maximum Out-of-Pocket - The most money you will be required to pay per year for deductibles and coinsurance. It is a stated dollar amount set by the insurance company, in addition to regular premiums. (Also see "Customary Fees")

Noncancellable Policy - A policy that guarantees you can receive insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.

Preexisting Condition - A health problem that existed before the date your insurance policy became effective.

Premium - The amount you pay in exchange for insurance coverage.

Primary Care Doctor - Usually your first contact for health care. This is often a family physician or internist, but some women use their gynecologist. A primary care doctor monitors your health, diagnoses and treats minor health problems and refers you to specialists if another level of care is needed.

Provider - Any person (doctor, nurse, dentist) or institution (hospital or clinic) that provides medical care.

Third-Party Payer - Any payer for health care services other than you. These would include an insurance company, HMOs and the Federal Government.