Published On: Oct 01 2013 01:05:50 PM EDTUpdated On: Dec 24 2013 08:57:41 AM EST
This may also be called an "eligible expense" or "negotiated rate" or "payment allowance." It is the maximum amount on which payment is based for health care services that are covered by your insurance.
When a provider bills you for the difference between the provider's charge and the allowed amount. For example, if the provider's charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. A preferred provider may not balance bill you for covered services.
The bill you or your doctor or health care provider submits to your health insurance company.
Your part of the costs of a health service that is covered by insurance. It is calculated as a percentage and you pay it in addition to whatever deductible you may owe. For example if your plan allows $100 for a doctor visit and you've already met your deductible, your co-insurance payment of 20% would be $20. The insurance plan picks up the rest of the cost.
A co-payment, or co-pay, is the amount the insured person pays every time he or she receives a health service. For instance, if your co-pay to see a doctor is $25, you pay that amount each time you see him or her. The insurance takes care of the rest.
The amount you owe before your health insurance benefits kick in. For example, if your deductible is $500, your insurance won't pay for anything until your costs are more than $500.
Donut Hole, Medicare prescription drug
Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a "donut hole"). This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
Essential health benefits
This is the set of health care services that must be covered by certain plans starting in 2014. There are 10 categories in which insurance plans must provide services and items: Maternity and newborn care, prescription drugs, rehabilitative services and devices, lab services, ambulatory patient services, emergency services, hospitalization, wellness and preventive services, chronic disease management, and pediatric services that include vision and oral care.
Health care services that your health insurance or plan doesn’t pay for or cover.
Health Insurance Marketplace
A resource where individuals, families, and small businesses can learn about their health coverage options; compare health insurance plans based on costs, benefits, and other important features; choose a plan; and enroll in coverage. The Marketplace also provides information on programs that help people with low to moderate income and resources pay for coverage. This includes ways to save on the monthly premiums and out-of-pocket costs of coverage available through the Marketplace, and information about other programs, including Medicaid and the Children’s Health Insurance Program. The Marketplace encourages competition among private health plans, and is accessible through websites, call centers, and in-person assistance. In some states, the Marketplace is run by the state. In others it is run by the federal government.
Health Savings Account (HSA)
A medical savings account available to taxpayers who are enrolled in a high deductible health plan. The funds contributed to the account aren't subject to federal income tax at the time of deposit. Funds must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don't spend them.
High deductible health plan
A plan that features higher deductibles than traditional insurance plans. High deductible health plans (HDHPs) can be combined with a health savings account or a health reimbursement arrangement to allow you to pay for qualified out-of-pocket medical expenses on a pre-tax basis.
In- and out-of-network
An in-network provider is a health care office that has contracted with the health insurance company to provide services for people on that insurance plan. An out-of-network provider is someone who does not have such a relationship with the insurance company. Typically, insurance will only cover the cost of services from health care providers who are "in-network."
A cap on the total lifetime benefits you may get from your insurance company. An insurance company may impose a total lifetime dollar limit on benefits (like a $1 million lifetime cap) or limits on specific benefits (like a $200,000 lifetime cap on organ transplants or one gastric bypass per lifetime) or a combination of the two. After a lifetime limit is reached, the insurance plan will no longer pay for covered services.
The most you pay during the period of your policy (most policies go for a year) before your insurance plan begins to pay 100% of the allowed amount. This total does not include your balance-billed charges, your premium, or the health care services your plan doesn't cover. Some plans don't count the out-of-network payments, co-insurance payments, co-payments, other expenses or deductibles toward this amount, so read the plan instructions carefully.
A health problem you had before the date that new health coverage starts.
A provider who has a contract with your health insurer or plan to provide services to you at a discount. Check your policy to see if you can see all preferred providers or if your health insurance or plan has a "tiered" network and you must pay extra to see some providers. Your health insurance or plan may have preferred providers who are also "participating" providers. Participating providers also contract with your health insurer or plan, but the discount may not be as great, and you may have to pay more.
The amount you must pay for your insurance plan.
Routine health care that includes regular checkups, patient counseling and screenings to prevent disease, illness and other health complications.
UCR (Usual, Customary and Reasonable)
The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount.