How Insurance Works
Your health insurance plan protects you from the unexpected: when you get sick or have to go to the hospital. Plus, it covers certain benefits that help you stay healthy--like a yearly checkup and covered routine screenings and labwork. Watch this video to learn the basics.
|You pay a monthly bill, a premium, for the health plan and the insurance company pays part of the cost for covered medical services.||Your insurance company offers a preferred list of doctors, hospitals and other health care providers. Choosing a provider within the network should result in less out-of-pocket expenses for you.|
To help you better understand your plan, we’ve defined five key health insurance terms you should know:
- Copay: A flat fee (e.g., $15) you pay for covered health services, such as a x-ray.
- Deductible: The dollar amount you must pay each calendar year before insurance begins to pay for certain health services. You pay the plan deductible first then coinsurance (%) may apply.
Coinsurance: The percentage (%) you may pay for services after you meet the plan deductible. It's also known as "cost sharing."
- Out-of-pocket maximum: The most you pay for covered health care services during your plan's calendar year. All of your covered expenses go toward this maximum. Once you reach the maximum, your health care plan pays 100% toward covered services and you don't pay anything.
- Premium: The regularly scheduled amount of money you must pay each month to keep your insurance active.
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