Health insurance terminology can be hard to follow at times, but we’ve broken down the five most important ones to note:

• • Premium – while you pay a monthly bill for your health insurance, the cost of said premium doesn’t necessarily equate to the cost of the health care services.

• • Deductible – this is the out-of-pocket amount you must pay for health care services before your health insurance takes effect. Once you’ve paid your deductible, you still may be required to pay copays or coinsurance until you hit your limit for those payments.

• • Copayment – also known as “copay” is a fixed amount you pay for a service or medication. This is often the way health insurance companies will split the cost with you after you’ve met your deductible.

• • Coinsurance – unlike copay, coinsurance is not a fixed cost. Instead, it’s a percentage of the cost you pay for covered insurance until you reach your out-of-pocket maximum.
    
    
  • Maximum out-of-pocket – this is sometimes called the out-of-pocket limit, which is the most you would ever have to pay for health care services in a year. Every dollar you pay toward your deductible, copayment, or coinsurance counts toward your out-of-pocket limit. Monthly premiums, on the other hand, don’t count.

Having an understanding of these terms will help you make better choices surrounding your health insurance. With the help of Health Plans of America, looking for the right health insurance is hassle-free. Get connected with a licensed insurance agent to find a health care plan that works for you and your budget.