Health insurance: understand the jargon

Health-insurance-jargon-explainedHealth insurance jargon can be very confusing, especially for expats who may be purchasing their plan for the first time.

However, once you understand the main terms you will be in a better position to make an informed decision about the plan the best fulfills your needs.

Health insurance jargon

  • Coinsurance  – is the percentage your insurance will pay to cover your healthcare costs after any deductibles and co-pays have been met. Once you have reached your annual deductable (see above for definition) your insurer will pay a percentage of any healthcare costs after this, usually 70-80%. You will be required to pay the remaining 20-30% as coinsurance.
  • Copayment (copay) – is a small fixed amount, determined by the health insurer, that the insured person must pay every time a medical service is accessed. The fixed sum depends on which medical service is used.
  • Deductible – is the amount of money the insured person pays each year in order for the health insurance company to reimburse them for the covered health care expenses.
  • Formulary – The list of drugs covered by your insurance plan.
  • Incurral Date – is the date on which treatment was received. Insurers will refer to this date when processing any claims. For example, if the policyholder goes into hospital for surgery on June 1st the insurance paperwork will refer to this date as the incurral date.
  • Inpatient Care – is the health care that the insured person will receive if they stay overnight in hospital.
  • Lifetime Maximum – is the maximum amount that an insurance company will pay throughout your lifetime.
  • Limited Policy – only covers certain incidents, such as specific accidents or illnesses.
  • Out-Of-Plan – refers to healthcare providers not in your insurers network, this may include other healthcare providers, hospitals or physicians for example. Not all health insurance plans will cover out-of-plan services, or may only party do so.
  • PMI – Private Medical Insurance
  • POS (Point of Service) plan – these have a network of service providers. You pick your main doctor and receive treatment from pre-approved centres in your network. If you choose to go out of your network for healthcare you may pay more.
  • Pre-existing condition –  is any known health condition or illness that the policyholder must declare before signing the health insurance contract. You need to be aware that by not declaring particular pre-existing conditions is likely to result in invalid insurance. Pre-exisiting conditions include diabetes, high blood pressure, pregnancy*, and they may or may not be covered by your plan. *You should discuss with your insurer whether your plan is flexible in terms of pregnancy, if this is part of your future plan, as there may be more options available to you that you might not be aware of.
  • Premiums – is the actual cost of your insurance plan, i.e. the amount you or your employer must pay per month for you health insurance. The higher your premium the higher your coverage, and therefore you will pay less for medical bills.
  • Reasonable and customary fee – this is what your insurance provider says is the average payment for a medical procedure or service. It depends on your geographic area, if you pay more than this fee you may not be able to claim all the costs back. Expats can ask their insurer for quotes for average medical procedures depending on where they are moving to.
  • Underwriting – the process by which insurers decide whether an individual is eligible for health insurance and how much they should pay.

Your health insurer can always clarify any doubts that you may have, as it is their responsibility to answer your questions and to help you find the plan that best suits your needs.