20 Key Phrases About Health Insurance

Navigating the world of health insurance can be complex and confusing. Understanding common phrases used in health insurance policies is crucial to making informed decisions about your healthcare coverage. This blog post outlines 20 essential health insurance phrases, providing clear definitions and straightforward examples for each, to help you better understand your policy and what it offers.

Phrases About Health Insurance

1. Premium

Meaning: The amount you pay for your health insurance policy.  

Example: Her monthly premium is $200.

2. Deductible

Meaning: The amount you pay out of pocket before your insurance starts to pay.  

Example: His deductible is $1,000 per year.

3. Co-pay

Meaning: A fixed amount you pay for a specific service or prescription.  

Example: There’s a $20 co-pay for each doctor visit.

4. Co-insurance

Meaning: The percentage of costs you pay after meeting your deductible.  

Example: His co-insurance is 20% for hospital visits.

5. Out-of-Pocket Maximum

Meaning: The maximum amount you will pay in a year for covered services.  

Example: Her out-of-pocket maximum is $6,000.

6. In-Network

Meaning: Providers or facilities covered under your health plan.  

Example: She visited an in-network specialist.

7. Out-of-Network

Meaning: Providers or facilities not covered under your health plan.  

Example: Out-of-network services are more expensive.

8. Explanation of Benefits (EOB)

Meaning: A statement from your insurer detailing what was covered for a medical service.  

Example: He received an EOB after his appointment.

9. Pre-existing Condition

Meaning: A health issue you had before your new health coverage started.  

Example: Coverage was initially denied due to a pre-existing condition.

10. Policyholder

Meaning: The person who owns the insurance policy.  

Example: The policyholder can add dependents to the policy.

11. Claim

Meaning: A request for payment that you or your healthcare provider submits to your insurer.  

Example: She filed a claim for her surgery.

12. Benefit Period

Meaning: The time during which benefits are paid under the policy.  

Example: The benefit period resets each January.

13. Coverage

Meaning: The extent of protection offered by an insurance policy.  

Example: His plan’s coverage includes emergency care.

14. Dependent

Meaning: A person reliant on the policyholder for insurance, like a child or spouse.  

Example: Adding a dependent may increase your premium.

15. Health Maintenance Organization (HMO)

Meaning: A type of health insurance plan that requires you to use doctors within its network.  

Example: Her HMO requires referrals to see specialists.

16. Preferred Provider Organization (PPO)

Meaning: A health plan that offers more flexibility in choosing doctors and hospitals.  

Example: He chose a PPO for wider provider options.

17. Annual Enrollment Period

Meaning: The time each year when you can make changes to your health insurance coverage.  

Example: He switched plans during the annual enrollment period.

18. Lifetime Maximum

Meaning: The maximum amount an insurer will pay over a policyholder’s lifetime.  

Example: Her policy has a lifetime maximum of $1 million.

19. Rider

Meaning: An addition to an insurance policy that provides extra benefits at an additional cost.  

Example: He added a dental rider to his coverage.

20. Underwriting

Meaning: The process by which insurers determine whether to offer coverage and at what rate.  

Example: Her application is undergoing underwriting.

Phrases About Health Insurance