I was watching “Trouble with the Curve” the other night, a movie (starring Clint Eastwood and Amy Adams) about an aging baseball scout and his troubled relationship with his daughter. In the movie, there's a lot of “baseball talk.” If you are unfamiliar with the sport, the language of baseball can create a barrier that prevents you from fully enjoying and/or understanding the film.
You may have the same problem when it comes to talking about your health insurance.
In one of the first scenes of the movie, Adams’ character is on a date with a gentleman and overhears the waiter tell someone Jair Jurrjens just threw a no hitter. She asks for clarification and the waiter proceeded to tell her that Jurrjens only walked one guy and nearly had a perfect game and that he was “blowing guys away.” Adams disagrees and states that Jurrjens is a “sinker-ball guy. He’s crafty, makes his living on the corners.”
It’s possible that last paragraph could have been written in latin and would have made more sense to you. For those who speak baseball, that one scene shows you just how much baseball means to Adams’ character and how knowledgeable she is about the game and players.
Why It’s Important To Speak The Language
Like baseball, you want to have a firm grasp on the basic concepts and terms surrounding health insurance so you can fully understand their importance and value.
Any agent or broker who is worth your time should first make sure you can speak the language. Before they even start to assess your current situation, they should ask you if you are familiar with a Health Savings Account or if you know what the deductible is?
If they jump right in and start telling you about the benefits of Anthem’s zero percent coinsurance on HSA’s but warn you about their aggregate deductibles, you might want to throw a glass of water in their face.
Getting to Know the Lingo
There are a handful of terms you will need to be familiar with to adequately purchase a health insurance plan. Let’s take a look at what they are and what they mean.
Premium: The amount you pay each month to the health insurance company to maintain your coverage.
Copayment: Or “copay” is a set dollar amount that is required to be paid up front for specific types of service, like doctor's office visits and prescription medications.
Deductible: The annual amount of money you are required to pay first before your policy starts paying a percentage.
Coinsurance: The amount that you are required to pay for covered medical services after you have satisfied your deductible.
Out-of-pocket Maximum: The total amount of money you are financially liable for on an annual basis.
You are guaranteed to come across these terms, along with a handful of others, during your search. They also make up the foundation of the health insurance language.
Round Two: More Key Terms
Effective Date: Date that you select for your policy to start. (The earliest effective date you can have is the date you complete, sign and submit the application)
In-Network Provider: Doctors and hospitals that have agreed to provide treatment at a discounted rate for an insurance company's members.
Out-of-Network Provider: Doctors and hospitals who have not agreed to provide treatment at a discounted rate for an insurance company's members.
Out-of-Network Deductible: The annual amount of money you would be required to pay if you receive treatment from an out-of-network doctor or facility.
Balance Billing: The amount of money an out-of-network doctor or hospital can charge you beyond your deductible and out-of-pocket max.
The most important thing to take away from these terms is to always stay in-network, if you can. If not, you face the very real possibility of a hospital trying to bill you for excess money beyond your policy limits.
The Bottom Line
Regardless of what you have experienced in the past, it’s not that hard to become fluent in health insurance. You don’t want to spend your hard-earned money on the wrong plan because you didn’t take the time to understand the terminology.
Of course, we only covered a handful of terms you will run across during your health insurance search. The most important thing to remember is to work with someone who is willing to take the time to teach you the language.
Sure its overwhelming at first, but it's hardly rocket science.
Have you work with someone who wasn’t willing to teach you the language? What are some insurance terms you are uncomfortable with?