for your LIFE and HEALTH

HEALTH INSURANCE

Co-payments or Co-insurance

Co-insurance or a co-pay is a percentage of each claim above the deductible paid by the insured. For a 20 percent health insurance co-insurance clause, for example, you would pay the deductible plus 20 percent of the covered losses. After the insurer pays 80 percent of the losses up to a specified ceiling, the insurer will start paying 100 percent of the losses.

Deductible

A deductible is the amount of loss paid by you before the insurance kicks in. Either a specified dollar amount, a percentage of the claim amount, or a specific amount of time must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage.

Family Coverage

Family coverage is defined as the contract holder and his or her dependents. Dependents include a spouse and unmarried dependent children including legally adopted children, step-children and children of a domestic partner if the child depends on the contract holder for his or her support. Some states also include unmarried domestic partners under the definition of family.

In-Network/Out-of-Network

Managed care plans have agreements with certain doctors, hospitals, and health care providers (in-network) to provide a range of services to plan members at reduced cost. Generally, you have less paperwork and lower out-of-pocket costs if you stay in-network. However, you give up some flexibility. If you decide to go out-of-network—i.e., use a health care provider that is not part of the managed care plan—you will generally pay more for your health care services because you are required to pay the difference between in-network and out-of-network costs.

Managed Care

Managed Care Plans include HMOs and PPOs. These plans are an arrangement between an employer or insurer and selected providers to provide comprehensive health care at a discount to members of the insured group and to coordinate the financing and delivery of health care. Managed care uses medical protocols and procedures agreed on by the medical profession to be cost effective, also known as medical practice guidelines.

Preexisting Condition

A preexisting condition is a medical condition diagnosed before joining a new plan. Many insurance plans will not cover preexisting conditions and some will cover them only after a waiting period. However, in 1997, Congress passed the Health Insurance Portability and Accountability Act (HIPPA), which mandates that preexisting conditions be covered without a waiting period when an individual who has been insured during the previous 12 months joins a new group plan.

HIPAA (Health Insurance Portability and Accountability Act)

HIPAA established national standards for the portability of insurance and set security standards for electronic health care information. HIPAA regulates the availability and breadth of group and individual health insurance plans, amending both the Employee Retirement Income Security Act and the Public Health Service Act. HIPAA prohibits any group health plan from creating eligibility rules or assessing premiums for individuals in the plan based on health status, medical history, genetic information or disability. It does not apply to private individual insurance. It also limits restrictions that a group health plan can place on benefits for preexisting conditions. HIPAA also includes rules aimed at increasing the efficiency of the health care system by creating standards for the use and dissemination of health care information. The final rule adopting HIPAA standards for security was published in the Federal Register on February 20, 2003. This rule specifies a series of administrative, technical, and physical security procedures for covered entities to use to assure the confidentiality of electronic protected health information.

Primary Care Physician

Under managed care plans such as HMOs or POS plans, the first contact for health care is the primary care physician—often a family doctor, internist or pediatrician. A primary care physician monitors your health and treats most basic health problems. In many plans, the insured must have a referral from the primary care doctor in order to receive covered care from a specialist.

Information Source: Insurance Information Institute. www.iii.org