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Health Insurance Terms - Must Know Ones: Loan Insurance US

Thursday, July 24, 2014

Health Insurance: Learn Before You Go for It


The US health insurance marketplace is pretty tricky, in terms of the terms that exist there. My blog is for busy people looking for an easy access to influential information.  There are many sites and blogs nicely presenting them for people to understand them easily. However, oftentimes the oversimplification attempts just make them still harder.  So the terms with the definitions

Your insurance company pays for you only when your expenses have crossed a limit. The (limit of) amount you pay is (your) deductible. It is an annual thing. Your insurance company starts to pay off your bills only when you cross the deductible. So if your deductible is $1500 a year, your insurance company will not pay you anything till your costs have gone beyond $1500 within the year.

Co-pay – pay together. With co-pay, you pay an agreed upon (amount of) money every time you visit your primary care physician or have a prescription bill.  Your insurance company pays the rest. So if your physician fee is $100 and your copay is $30, you pay $30 from your pocket and the company pays the rest-- $70. The same rule applies to your prescription bills. This is an ‘each n every’ thing.

Coinsurance is much like copay. But the underlying difference is that with coinsurance, you copay an agreed upon percentage of your bills you have. So if your bill comes to $1500 and you are coinsured for 10%, you pay %150 and your insurer pays the rest—$1350.

Medicare is a US federal government health insurance policy for people at 65 and beyond. People below the age-group can also avail the policy under certain conditions like disability.

Medicaid is also a health insurance for people of low-income and resources background with no age group restrictions. Recipients get their healthcare benefits from private insurers who get monthly premiums from the government.

Medigap is one kind of health insurance policy. You probably know that Medicare has four parts –A, B, C and D. Of these, the first two A and B are known as Original Medicare.  Medigap is a supplemental policy to this Original Medicare. You receive supplemental support instead of benefits. Medigap shares your costs upon your paying deductibles, copays or coinsurance.
Medicare Advantage Plan
It is better to say plurally — plans. Medicare Advantage Plans are health insurance policies that are suited to your personal healthcare needs.

Medicare HMO
HMO stands for health maintenance organization. It is one of the four (types of) Medicare Advantage Plans. You receive healthcare service only from within your insurance company’s network. (An emergency may be an exception, though). You require to choose your primary physician who refers you within the network service providers.

Medicare PPO
PPO—preferred provider organization works within a network of service providers. However, you can go outside the network without a referral if you are willing to spend more out of your pocket.

Medicare PFFS
Stands for private fee for service. It allows you to go to any service provider of your choice so long they are ready to accept the terms of the plan you are on.

Medicare MSA
MSA stands for Medical Savings Account. Here is how it works:
1. You receive Medicare Part A and B once you have paid your deductible. The deductible is pretty high.
2. You receive deposit into your bank account from Medicare. You can spend it only for medical purposes that must qualify. Else you pay penalty. Deductible is applicable here as well. MSA does not cover prescription drug coverage.

Medicare SNP
SNP stands for special needs plan. It is one of the four types of Medicare Advantage Plans for people with specific ailments and characteristics. ‘Specific’ here means conditions that requireinstitutional or home care for their chronic conditions.

Donut Hole
This is perhaps one of the most confusing health insurance terms for many. To understand this you need to associate it with your Medicare Part Dor Prescription Drug Coverage Plan. Like any health insurance plan, Part D also has a yearly limit of expenses for you. When you cross this limit, your insurance company ceases to pay for you, leaving you in the ‘gap’. This does not, however, mean they leave you completely alone until the next year. They start to pay you backwhen you have crossed another limit paying from your pocket. So the time you are in between the two limits  is the donout hole state for you.

   Image Credit Goes To: ptcompliancegroup.com

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