Understanding Health Insurance Basics

What is Health Insurance?

Health insurance is a contract between you and an insurance company. You pay a monthly premium, and in exchange, the insurance company helps pay for your medical expenses. Understanding the basics of health insurance can help you make informed decisions about your coverage.

Key Terms You Need to Know

Premium

Your premium is the amount you pay for your health insurance every month. Think of it as your membership fee. You pay this whether you use medical services or not.

Deductible

The deductible is the amount you pay for covered health care services before your insurance plan starts to pay. For example, with a $2,000 deductible, you pay the first $2,000 of covered services yourself.

Copayment (Copay)

A copay is a fixed amount you pay for a covered health care service, usually when you receive the service. For example, you might pay a $30 copay for a doctor's visit.

Coinsurance

Coinsurance is your share of the costs of a covered health care service, calculated as a percentage. For example, if your coinsurance is 20%, you pay 20% of the cost and your insurance pays 80%.

Out-of-Pocket Maximum

This is the most you'll have to pay for covered services in a year. After you reach this amount, your health insurance pays 100% of covered services.

Types of Health Insurance Plans

There are several types of health insurance plans available, each with different rules about which doctors you can see and how much you'll pay:

• HMO (Health Maintenance Organization): Usually limits coverage to care from doctors in the plan's network
• PPO (Preferred Provider Organization): Offers more flexibility in choosing providers
• EPO (Exclusive Provider Organization): A managed care plan with local network coverage
• POS (Point of Service): Combines features of HMO and PPO plans

Why Health Insurance Matters

Health insurance protects you from unexpected, high medical costs. It provides coverage for essential health benefits critical to maintaining your health and treating illness and accidents. Even if you're healthy, you need health insurance because you never know when you might need medical care.

Getting Started

Ready to find the right health insurance plan for you? Our licensed advisors can help you understand your options and find coverage that fits your needs and budget. Get started with a free quote today.