Health Insurance Terms Defined by Covered California


Health insurance can be confusing, so
here’s a story to help explain some commonly used terms. Meet Stanley! He has a health plan and is paying his monthly premium. A premium is the amount Stanley
pays his health insurance company for coverage. He woke up this morning not
feeling well and called his doctor, who is in his insurance network. A network
is a group of health care providers, such as doctors, specialists, and hospitals
where Stanley can receive services covered by his plan. When he arrives for
his appointment, he is asked for a copay. A copay is a fixed amount Stanley needs
to pay for certain health services, such as seeing his doctor or filling a
prescription. During his visit, Stanley receives a
blood test. Afterward, a bill from his health insurance company arrives in the
mail. It shows the copay Stanley paid for the appointment and a separate
coinsurance charge for his blood tests. Coinsurance pays for certain services
not covered by a copay. Unlike a fixed amount, coinsurance is a percentage
Stanley will pay for the test while his health insurance handles the rest. The
bill also shows how much his copay and coinsurance have contributed to reaching
his annual deductible. A deductible is the amount Stanley needs to pay for
certain health services, such as inpatient care and medical
transportation, before his insurance plan covers the majority of expenses.
Deductibles, coinsurance payments, and co-pays are all considered
out-of-pocket costs. If Stanley has a serious medical issue requiring
expensive treatments, his out-of-pocket costs could reach his out-of-pocket
maximum, which is the most Stanley would pay annually. If his max is reached, his
insurance would cover 100% of his healthcare for the rest of the year.
Stanley is feeling much better. He was able to see his doctor and get the
treatment he needed, and thanks to his coverage, he’s protected from any health
care costs that could break the bank. More information about health insurance
is available at Covered CA dot com.

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