Health insurance is among the most crucial investments you can make. However, with many options available, it is easy to get bogged down by choices. While you should ask your insurance agent questions, it’s easier to understand and choose the best coverage if you know some terms used in policies. 

A Guide to Useful Health Insurance Terms

1. Premium 

Simply put, the premium is the monthly, quarterly, or annual amount you pay for your health insurance plan. This cost depends on various factors, such as your age, medical history, and whether you’re covering dependents. Fortunately, you may be able to offset some of this premium with tax credits through the Affordable Care Act. 

2. Deductible 

Individuals typically pay an amount known as the deductible before the coverage begins. For example, if you have a $500 deductible and a $2,000 medical bill, you contribute $500, and then the provider will supply the remaining $1,500.  

3. Out-of-Pocket Maximum 

In cases when ongoing and expensive hospital visits are necessary, your out-of-pocket maximum might come into play. It’s the highest amount you would be expected to pay in a calendar year. 

Your health insurance will cover the rest. 

4. Copayment 

After you receive services from a medical clinic or hospital and pay the deductible, you may need to provide a copayment, a percentage of the bill. It may vary depending on whether you’re visiting a general physician or a specialist, the former usually costing less than the latter. Some plans allow co-payments to count toward your annual deductible. 

5. Health Savings Account 

You may be interested in setting aside a few thousand pre-tax dollars specifically for any annual medical expenses that might come up. This is called a health savings account (HSA). You use these pre-tax dollars to pay your deductibles and co-payments. If you do not use them during the policy year, the funds will roll over and gather interest until needed.  

As you master these and other health insurance terms, turn to Mid-Alliance Insurance Associates LLC to find the best policy for your situation. Located in Lincoln, NE, their knowledgeable and experienced insurance agents have been drafting customized plans since 1997. They can also assist with other policies related to your well-being and that of your family, including life insurance. Learn more about their products by visiting their website. If you have questions, call (402) 421-7800.