Health Insurance Explained
Understanding Your Health Insurance Policy
Yearly Deductible – This is the annual first-dollar expense assumed by the policyholder. Depending on the policy, services such as a doctors office visit may covered with a co-pay without meeting a deductible first. Policies usually contain an individual deductible and a total family deductible. As a general rule, the higher the deductible-the less expensive the rate.
Co-Insurance – This is cost sharing by the company and the policy holder after the deductible is satisfied. Example: 80/20 co-insurance means that the company pays 80% and the policyholder pays 20% of the bill up to a maximum co-insurance limit. When the maximum is reached, the company begins paying 100% of the charges thereafter.
Lifetime Maximum – This is the total amount of coverage for one person in their lifetime. The individual and family lifetime maximum amounts contained in a policy may be different. Some companies may offer unlimited lifetime maximum coverage.
Doctor and Drug Co-Pays – Some policies have additional benefits wherein the policyholder pays a certain amount for a doctor’s visit or prescription drugs and the company pays the remaining balance.
Pre-Existing Conditions/Waivers and Rate-ups - Persons with pre-existing health conditions applying for individual coverage may be offered a policy wherein certain conditions are waived (not covered) and/or additional premium is charged. Certain pre-existing events may cause some conditions to be completely excluded from coverage. Pre-existing condition waivers, rate-ups, and exclusions are all determined during the underwriting process.
Waiting Periods – Certain coverages, such as a maternity benefits when available, may be subject to a specified time period before they begin to be covered by the policy.
Grace Period - A policy grace period is the amount of time given to pay the premium after the original due date before the policy is canceled.