Understanding Health Insurance Part 1: Vocabulary

Navigating the healthcare system in the United States is challenging to say the least. Part of this is due to the confusing health insurance system in our country. What is a deductible? How much is my co-pay? What does out-of-pocket maximum mean? To make sure you are making the correct choice when selecting a health insurance plan, it is crucial to learn how health insurance works and what to look for when purchasing coverage.

This is part 1 of a 3-part blog post. Read below to learn more about key terminology you will want to know when selecting your health insurance policy.

Words to know and look for:

• Insurance Policy – a contract between an individual and an insurance company detailing everything that is covered by a health insurance plan, including the terms and conditions. Most insurance policies operate on a yearly contract.
• Policy Holder – the individual(s) covered by the health insurance policy.
• Dependent – a person who is eligible for coverage under a policyholder’s health insurance plan. A dependent may be a spouse, domestic partner, or child.
• Premium – the amount you pay per month or per year to the insurance company for healthcare coverage.
• Deductible – the amount you pay out-of-pocket during a policy year for some benefits before coverage starts. Once you hit a specific dollar amount out of pocket in that year, your insurance will start to pay its share.
• Co-pay – the amount you pay at the time of service. Example: paying $30 every time you visit your doctor or paying $50 each time you see a specialist for care. The actual dollar amount differs per plan but most often this cost is standardized by the plan you select.
• Out-of-Pocket Maximum – the maximum amount of money you pay in deductibles and co-pays in a year before the insurance company starts paying for all covered expenses.
• In-Network – healthcare services and providers that are covered under your insurance plan. In-network providers are often the cheapest option for you as the policyholder.
• Out-of-Network – healthcare services and providers not covered by your insurance plan. Using services outside of your network often result in higher costs to you as the policyholder.
• Pre-Existing Condition – any chronic disease, disability, or other condition you have at the time of application. Any treatments related to pre-existing conditions often result in higher premiums.
• Waiting Period – when accepting a new job that offers insurance to employees, often (but not always) employer-sponsored insurance plans require the new employee to wait a certain amount of time before qualifying to enroll in their health insurance plan. This waiting period varies but usually lasts 90 days.
• Enrollment Period/Open Enrollment – this is the time window when you can apply for health insurance or modify your existing policy.
• Qualifying Life Event – outside of the enrollment period, a policyholder can modify their plan if they experience a qualifying life event. This includes – marriage, divorce, birth of a child, changes to individual/household income, or relocating out of state.

Health insurance provides you with peace of mind when taking care of your health. By signing up for the appropriate health insurance plan, you are making sure that you will not be stuck with paying for expensive medical costs out of pocket.

Individuals can obtain health coverage through two options: individual coverage or group coverage. Individual coverage is purchasing coverage directly from the insurance company. While group coverage is often provided through eligible employment or student status when an organization negotiates with the insurance company for coverage for a large amount of individuals.

Ohio State students are required to hold some kind of health insurance. If you are an international student, you are required to sign up for insurance through the Student Health Insurance policy. If you are a domestic student enrolled in a degree program and enrolled in at least six (6) credit hours for undergraduates, at least four (4) credit hours for graduate and professional students and at least three (3) credit hours for post-candidacy doctoral students, you are automatically enrolled in this insurance plan. Domestic students have the option to withdraw from the Student Health Insurance plan if they have coverage elsewhere. For more information on Student Health Insurance visit the Student Health Insurance website and read their FAQs page for answers to common questions.

References:

Health Insurance Literacy: Student Health Insurance (osu.edu)

Understanding Health Insurance (medicalbillingandcoding.org)

-Jordan Helcbergier, Wellness Coordinator