Health Insurance 101 – removing the confusion from healthcare terminology

“Make sure you select your PCP during open enrollment and check your EOC before your next appointment for details on your copay or coinsurance, depending on your deductible and annual max out-of-pocket.”

Did that make your head spin? Healthcare companies can get caught up in using very particular language, some of it required by government regulations, which can make things confusing for the members they’re trying to help.

We know not everyone has a PhD in medical terms, and while Bright Health tries to speak in easy-to-consume terms some are unavoidable. We’ve put together this quick cheat sheet to help you better understand some common healthcare terms. The better you understand these terms, the better you will be prepared to get the most value from your plan, with the least stress, and potentially even save some money. Understanding the meanings of these concepts will help equip you to better address any barriers and make smart decisions that will benefit you and your family.

Common terms about Bright Health’s approach to health insurance

Care Partner
Care Partners are networks of doctors, clinics and hospitals that Bright Health works with to provide healthcare to its members. Bright Health only works with one local Care Partner in each market it serves, creating a close relationship that benefits members with quality, coordinated care. Learn more about the Care Partner in your market.

Member Services
Need to hop on a phone call and ask a question about your health insurance plan? That phone call goes to Member Services. This team at Bright Health is made up individuals eager to help solve any issues that might come up as you start to use your health coverage. The phone number can be found on the back of your Member ID card.

Care Navigators
Similar to Member Services, Care Navigators are a phone call away and ready to help. Think of them as your health insurance concierge. They can help schedule your appointments and provide guidance on nearby facilities and doctors best suited for your situation. The phone number can be found on the back of your Member ID card.

Understanding Your Healthcare Costs

When most people think of their health insurance cost, this is what they’re referencing. Your monthly premium is the amount you pay to keep your coverage active every month. You pay this even if you don’t use healthcare services in a particular month. Because health insurance contracts last for one year, your monthly premium multiplied by 12 months is the minimum amount you’ll spend in a given year.

This one has a lot of caveats, but the easiest way to think about it is—it’s the amount you pay out-of-pocket, not including the monthly premium (above), before your health insurer pays. This doesn’t mean your insurer isn’t covering anything! Plans are designed to include benefits like $0 immunizations and breast cancer screenings to keep members healthy without an added cost.

Coinsurance and Copays
These two can be confusing, for sure. They both represent the cost a member will be responsible for during a doctor visit or hospital stay. Copays are fixed amounts. If your copay is listed as $40, then every time you go to the doctor, you’ll pay exactly $40. Coinsurance is a percentage of the bill you’ll pay after you have paid your deductible. Example: You had to take an ambulance for an emergency and the bill is $200. Your coinsurance is listed as 40% meaning your insurer will pay $120 and you will pay the remaining $80.

Allowed Amount
This might be something you see on a bill from the doctor. It’s the highest amount an insurer will pay for a specific service, like blood work or diagnostic test. If an in-network doctor charges more than the allowed amount, the insurance company won’t pay the additional amount—and neither will you! These amounts are agreements with providers to help control the cost of healthcare, ultimately lowering costs for you.

Out-of-pocket Cost
For practical purposes, out-of-pocket costs refer to any amounts paid by the member for healthcare. For official health insurance cost tracking purposes it refers to any amounts paid for covered services, excluding monthly premiums. Pay a copay or coinsurance, that’s considered out-of-pocket.

Out-of-pocket Maximum
This number reflects the most you’ll pay out-of-pocket in any given year for covered health expenses. In the unfortunate event an injury or disease results in increased healthcare expenses, out-of-pocket maximums help to keep your total costs manageable. After you reach the maximum, your health insurance begins to pay 100 percent of the cost for in-network services.

A claim isn’t a cost, but a request for payment from your insurer. You or your doctor submits this request when you get items or services you think are covered by your plan. A claim must be submitted for your visit to be covered.

Understanding Your Insurance Plan Coverage

Benefit Period and Effective Date
Your effective date is the first day your plan begins to cover health expenses. It’s typically the first of the month after you’ve applied for coverage. Your benefit period is from your effective date to when you’ll need to renew or switch plans. For those who enroll during Open Enrollment, the benefit period is often one calendar year from 1/1 to 12/31.

Evidence of Coverage (EOC) or Certificate of Coverage
A document full of every detail you can think of about coverage, a member's rights and responsibilities, and plan’s the associated costs. It’s required that all members receive one, because it is the go-to resource for any coverage questions.

Explanation of Benefits (EOB)
An explanation of benefits is a statement sent by a health insurance company explaining what medical treatments and/or services were paid for on their behalf. The EOB is commonly attached to a check or statement of electronic payment. It’s the result of an insurance claim and is designed to provide clarity into who paid what, why they paid it, and when.

Is my prescription covered? The formulary, or drug list, answers this question. It’s a line by line list of drugs covered by your insurance with details on how they might be priced.

Prior Authorization
Sometimes insurance companies require a pre-approval of services before processing coverage. Many plans have specific forms that must be completed by your doctor to authorize the claim. It sounds restrictive, but it helps cut down on unnecessary treatments which, in turn, helps cut down on costs for you.

Medically Necessary
Part of the prior authorization process is determining if the service is medically necessary. This means that the service is actually treating a condition or disease according to clinical guidelines. Is this how a typical doctor would proceed? If so, it’s probably medically necessary. There are of course exceptions and Bright Health works closely with providers to make sure members receive quality care.

Understanding Your Insurance Network

Insurance companies contract with doctors, hospitals, laboratories, clinics and other facilities to provide you care at a negotiated rate. These doctors and facilities that have a contract with your insurer are considered in-network. You will typically pay less for services provided by an in-network health provider than one that is out-of-network.

Any healthcare provider that isn’t contracted with your insurer is out-of-network. This doesn’t mean those doctors will turn you away, or that out-of-network expenses will be 100% out-of-pocket. It is generally better for both your care and your wallet to stay in-network whenever possible.

Primary Care Provider (PCP)
What we call a PCP, you likely just call “my doctor.” Oftentimes, good care comes from having someone who knows you personally, understands your health history, and has an investment in your well-being. By selecting an in-network primary care provider, you receive consistent care with generally lower costs. Your PCP should be your first stop for most doctor’s visits outside of emergencies.

See these terms in action by exploring the Individual and Family plans Bright Health offers. Join. Save. Be happy.
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Author: Stephanie Sample

November 26, 2018