Affordable Healthcare 123 Tees Explains Health Insurance Terminology for College Students

Between passing finals, securing college funding, and balancing jobs, education, and social lives, busy college students often put issues such as health insurance on the back burner. However, in the professional world, it will help to know what those health insurance salesmen are really talking about. Affordable Healthcare 123 Tees explains the professional terminology used when negotiating rates and benefits with your insurance company.

Deductible

You probably already know what a deductible is. In fact, you can deduce the meaning fairly easily. However, you may not understand exactly how it applies to a health insurance policy.

Health insurance companies promise to pay a certain percentage of your medical care. This percentage is given after you have paid your share of treatment and medications, called the deductible. Part of the negotiations of your policy includes the amount of deductible. If your policy has a high deductible, then the monthly premiums will be fairly low. If you select a low deductible, your monthly premiums will be quite high.

Premium

The premium is the set amount you pay for your insurance coverage, whether it is health, life, auto, or homeowners’ insurance. In most cases, if you have employer-supplied insurance, your premiums may be completely covered by your employer. As you add family members, you'll have to start paying a higher amount to make up the difference. However, there are various techniques you can employ to alter the amount of the premium.

Copay

Copays and deductibles are often used interchangeably by consumers but are actually quite different in function. A copay is the amount you pay for each doctor visit or prescription. It may be $20 for your primary care physician and $50 for a specialist, or the rates may be $30 and $150, depending on your policy. Prescriptions are also subject to a copay. A good copay can make your daily or monthly medical care quite affordable, and is often sought after in negotiations for health insurance. However, watch out for copay structures that accompany high premiums and find out if your copays are applied to your deductible.

Coinsurance

Coinsurance is the percentage breakdown of the cost of your medical care. This goes into effect after you reach your deductible amount. Most health insurance policies use an 80% to 20% split; this means that once you reach the limit of your deductible, the insurance company will pay 80% of your health care costs while you pay 20%. Then, if you reach your maximum out of pocket amount, the insurance company covers 100% of your care.

Out Of Pocket and Lifetime Maximums

Ask your insurance agent if there are any maximums attached with your policy. Lifetime maximums have been banned since healthcare reform in 2003, in response to people who developed catastrophic medical conditions and consequently lost their insurance. It benefited the insurance companies since they could put a spending limit on your medical care; however, it left many people in financial jeopardy.

The out of pocket expense is to your benefit. Your policy may have a yearly out of pocket maximum, or a lifetime out of pocket maximum. This means that once you reach the stated amount, the insurance company must cover 100% of your medical care costs. Not all policies carry out of pocket maximum amounts.

Catastrophic Coverage

As the name implies, catastrophic coverage is medical insurance you will use only if you encounter a catastrophic health event. Many college students carry this kind of insurance, preferring to pay for their own maintenance care with a low-cost catastrophic plan for backup.

Creditable Coverage

This is a part of HIPAA, which was passed in 1997. With creditable coverage, you can transition smoothly from one health insurance policy to another. The only requirements are that you have been insured for at least a year, and your policies are paid-up. In these cases, you can avoid the exclusionary period that accompanies a new insurance policy.

These terms and their effect on health insurance have not changed with the Affordable Care Act. ACA policies still use all of these terms, and they apply to health policies for college students.