Introduction
Health insurance and healthcare services are inexplicably intertwined, and understanding one necessitates understanding the other. Simply put, you can't escape insurance in the healthcare landscape, thus it's critical that you understand basic health insurance terminologies. Having this information will allow you to better comprehend insurance coverage in telehealth, as well as dramatically improve the quality of your services and education when it comes to working in healthcare. It ensures you’re well equipped and can face inevitable health challenges head-on.
How does health insurance protect you from health and financial risks?
Nobody chooses to become ill or injured, but the majority of people will require medical attention at some point, and many will be unable to purchase necessary services solely from their personal income. This is where health insurance comes in, as it offers benefits and cost coverage, among other things. Health insurance provides essential health benefits for maintaining your health and treating illnesses and injuries, including accidents. Accidents happen, and health insurance provides a fair solution to ensure you're properly reimbursed. Essentially, health insurance protects you against unexpectedly high medical costs, which, as you are probably aware, are all too common in the healthcare industry. You are also entitled to free preventative care with insurance, such as vaccines, screenings, and some tests, even before your deductible is met. In terms of healthcare firms, health insurance ensures that you are protected from some charges and that you do not have to break the bank to pay for services. While it can be difficult to figure this out at first, especially in terms of HIPAA compliance, with the correct checklist in place, you can ensure that both you and your patients have realistic options.
How does health insurance work?
When you have health insurance, your medical bills are paid first by your insurance company. Then, depending on the terms of the plan, they pay for a portion or all of the amount. In some ways, health insurance has often been compared to auto insurance due to its similarities. For example, if your automobile is in a bad accident and requires extensive repairs, or if it must be replaced totally with a new car, car insurance will cover some or all of the costs. Of course, that's a good thing, because the expense of repairing or replacing your car could rapidly exceed the amount you have in your bank account. Health insurance works similarly, if not better because it provides more comprehensive and holistic coverage. Annual exams, immunizations, preventative health, and other regular body and mind checkups are typically covered by health insurance services, ensuring that you may afford healthcare solutions. It promotes health and well-being, as well as the ability to avoid illnesses and diseases before they become serious and widespread. For many clients, health insurance is a must-have for protection, and healthcare businesses are no exception. Understanding common health insurance key terminology is the first step towards understanding the big picture.
Understanding common insurance terminologies in healthcare
We understand the importance of healthcare terminology, and so to help you get started, we’ve collated a list of the most common insurance terms for you to become acquainted with. This is your first lesson in health insurance terminology 101, so don’t be concerned if this is overwhelming or intensely unfamiliar to you! In no time, you’ll be able to understand the terms and operations at ease and with full confidence.
Co-insurance
This refers to your share of the costs of an insurance health care service, which is typically calculated as a percent (for example, 30%) of the allowed amount for the service. This means that you must pay co-insurance as well as any deductibles. For example, if your health insurance allows $200 for an office visit and you've met your deductible, your 30% co-insurance payment would be $60. The remaining sum is then covered by health insurance or a plan.
Co-payment
A co-payment is the set amount (for example, $25) paid for a covered health care service, and is usually at the time the service is provided. The fee varies depending on the type of insured health care service but is always a fixed amount or flat fee.
Deductible
This is the amount of money you must pay each year before your insurance policy begins to pay for qualified medical bills. For example, if you have a $500 deductible, your plan will not pay until you have fulfilled your $500 deductible for eligible health care services subject to the deductible. It’s important to keep in mind that the deductible might not be applicable to all services due to its nature.
Network & non-preferred provider
Your network refers to your health insurer or plan's contracted facilities, providers, and suppliers that also offer healthcare services. In other words, your network can consist of doctors, hospitals, and any healthcare provider with whom insurance companies have agreements to offer services at reduced rates. In general, you will likely pay a smaller amount for services provided by providers in your network. In regards to your non-preferred provider, this simply refers to a service provider who is not in a contract with your usual health insurance plan or provider. Seeing a non-preferred provider will cost you more money, and you may need to check out your health policy to consider other options or alternatives such as a ‘tiered’ network.
Allowable charge
This is the cash amount that a health insurance company considers to be an appropriate charge for medical services or supplies based on the rates in your area. It is also known as the "allowed amount," by various other services. Essentially, it is considered the maximum sum on which payment for covered health care services is based, and in some cases, you may be required to pay the difference if your supplier charges more than the permissible amount.
Benefit
A term you’re probably familiar with, a benefit is simply the sum paid by an insurance company to a plan member for relevant medical expenses.
Claim
A claim refers to a request by a patient, or their healthcare provider, for the insurance company to pay for the medical services used. Healthcare businesses will have to go through a claims process to receive reimbursements and have them approved, which can be particularly meticulous with many being rejected or denied.
Dependent
This is any person, whether a spouse or a child, who is covered by the health insurance plan of the patient. Each health insurance organization has its own rules and regulations concerning this, and it is highly recommended to check them out in further detail.
Health Maintenance Organization (HMO) plan
HMOs demand the usage of specified, in-network provider networks, and encompass healthcare funding and delivery systems that offer full healthcare services to members in a certain geographical area.
Health savings account (HSA)
HSA is intended to supplement a type of health insurance known as an HSA-qualified High-Deductible Health Plan (HDHP) and refers to a personal savings account. Individuals can use pre-tax earnings to pay for medical bills, with monthly rates for HDHPs often being lower than those for regular health plans, which makes for a viable option. Customers who have an HSA-approved HDHP can also invest the money they save on premiums in the HSA to pay for future eligible medical expenses which are highly beneficial.
Take home message
Insurance terms can be difficult to learn and understand, but once you do, your options become significantly more expansive. By being on the same page, you can effectively connect with insurance carriers and coordinate and communicate insurance plans with patients. Knowing the terminology can provide you with more insight and improve the quality of services as well as the efficiency of claim reimbursements and processing. Insurance is an important aspect of any private health practice, as are creating budgets, evaluating EHRs, and improving finances pertaining to telehealth. It's an excellent technique to ensure that you're paid and that your patients are taken care of.
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