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Insurance Terms

Insurance Terms

What do you understand by co payments and the term deductibles?

When a prescription is handed over to you by a doctor, you make a small payment. The health plan you adopted pays the rest of the amount after the bill is prepared by the provider. This payment is termed as co-payment. And deductible is the amount you pay to your health plan every year before your plan start to make payments for claims. As an example, you have to pay $1000 before your $1000 deductible plan start to pay for the health services. Deductible plan is becoming common across plans due to the rise in health care costs.

What is the percentage of co-payment you have to contribute?

The percentage depends upon the plan you choose. For an example, if you have opted for such a plan in which the co insurance requirement is 10%, then you have to contribute $100 for $1000 worth medical bill and the rest will be paid by the insurance company you selected. No co-payments and deductibles are needed to be made in the amount you paid which you may need to pay in other sections of your agreement with the insurance company. The more co insurance you will pay; the less will be your monthly premium.

What is the difference between “in networks” and “out of network”?

Being the member of Preferred Providers Organization, you need to go to the physician ready to provide services under the PPO network at the pre negotiated rates. You will have to make a small co payment to the doctor during every visit and the rest of the bill will be paid by the PPO network. So the health care providers approve by the PPO is known as “in network”. And in the “out network”, the providers are not approved by the PPO network. In this case, you have to pay the ample portion of the medical expenses.

What do you understand by out of pocket maximum?

Out Of Pocket maximum (OOPM) in the health insurance policy is known as the limit induced on co-payments and deductibles that will be paid in any given year. According to the plan, 100% of covered expenses are paid by the plan in rest of the year. If you have selected a $1000 deductible plan and $2000 OOPM, you have to make payment of $1000 before the plan start to pay a portion of the covered expenses. If you have chosen a 20% co-insurance plan, you have to pay the same percentage of the reminder of covered expenses and 80% of the covered expenses are paid by the insurance company. You have to pay $1000 to the deductible and $1000 to the co-insurance, now your coverage is completed because $1000+$1000 is equal to $2000, the rate of OOPM. After reaching to this amount, you do not need to pay any co-insurance because from now your plan starts to pay 100% of the covered expenses.


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