Your employer just gave you a huge stack of information about your health insurance. Before you groan and throw the book to the farthest corner of your desk, you might want to read it over and make sure you understand it. Keep in mind that this health insurance could save your life one day.
Some health insurance terms can be hard to understand, so here are some tips to help you define and understand some of the most common terms you'll find in a health insurance manual. Use this as a quick guide, but make sure to check your manual for more information.
Health Maintenance Organization is the first term (HMO)
HMOs, which stand for "Health Maintenance Organizations," are a popular type of group health insurance. In this plan, the medical insurance company hires a group of doctors, nurses, pharmacies, and other medical professionals to take care of the health of the people who have the plan. Most of the time, people with insurance have to choose a primary care doctor who coordinates all their care. One good thing about this system is that it keeps costs stable and low. However, there isn't much room for change.
Preferred Provider Organization is the second term (PPO)
This kind of health insurance is kind of like an HMO, but there are a few big differences. In this case, the insurance company doesn't hire the doctors and other medical professionals. Instead, it makes deals with them to offer their services to people who have insurance, either at a lower price or as part of a co-pay/co-insurance plan.
Medical Deductible is the third term.
This might be one of the most confusing terms for health insurance. It causes a lot of confusion because a lot of people think that all they need to worry about is the co-pay they give their doctors. In fact, the deductible on your health insurance works the same way as the deductible on your car insurance. In this case, you have to spend a certain amount of money on medical care before your health insurance starts paying for all of it.
These are a few of the medical insurance terms you are likely to run into as you look into your options. Make sure you understand the different rules and terms of your health insurance plan, and if you're not sure, ask questions.
