Here’s something you probably won’t find surprising: Americans still struggle with understanding health insurance.
In a survey recently at Carnegie Mellon University, 202 people with employer-sponsored health insurance were given a brief quiz. They were asked to define four basic health insurance terms. The results weren’t great, with only 14 percent of participants able to identify what each of the four terms mean.
Now it’s your turn! Do You Understand Health Insurance as Well as You Think?
(check your answers at the bottom and see how you rank)
If you didn’t do as well as you thought or could use a refresher course, you can find the definitions of the basic terms below.
Health insurance terms you should know
Here are some of the most important insurance terms you should know:
- 1. Co-Insurance: Your share of costs for a covered service. Co-insurance is usually a percentage.
- 2. Co-Pay: The amount you may have to pay at the time you get a service, like a doctor’s visit or a lab test. A co-pay is usually a set dollar amount.
- 3. Deductible: The amount you owe for health services before your insurance begins to pay anything.
- 4. Explanation of Benefits (or EOB): A summary of healthcare charges that your insurance sends you after seeing a provider or receiving a service. It’s not a bill. It lists the services you received and how much your provider charged your health plan for them. If you owe money for your care, you’ll get a bill from your provider.
- 5. Formulary: A list of drugs your health plan covers.
- 6. Network: The facilities, providers and suppliers your health insurer has contracted with to provide health services. Using in-network providers is usually cheaper than going to out-of-network doctors or hospitals.
- 7. Out-of-Pocket Maximum: The most you will pay in a year before your health plan starts to pay 100 percent of your covered services.
- 8. Premium: How much you pay for your health plan. You and/or your employer usually pay premiums monthly, quarterly or yearly. If your premium isn’t paid, you may lose your coverage.
If you have any questions about health insurance, these terms, or would like a free quote today, just call us at 724-929-2300.
Be sure to share your results and see how your friends stack up.
Answers: Q87: 1; Q90: 3; Q5: 1; Q3: 3;