INSURANCE TERMS
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Allowable Charge—Also referred to as Allowed Amount or Maximum Allowable. This is the most insurance will cover for a specific service.
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Annual Maximum—Generally refers to dental insurance. This is the most a plan will pay for covered services during the plan year.
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Balance Billing—You, the member, may be asked to pay the difference between the billed charges and the insurance company’s usual and customary reimbursement. This only applies to non-network providers.
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Coinsurance—The plan’s share of the cost of covered services which is calculated as a percentage of the allowed amount. This percentage is applied after the deductible has been met. You pay any remaining percentage of the cost until the out-of-pocket maximum is met. Coinsurance percentages will be different between in-network and nonnetwork services.
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Copays/Copayments—A fixed amount you pay for a covered service. Copays can apply to office visits, urgent care or emergency room services. Copays will not satisfy any part of the deductible. Copays should not apply to any preventive services.
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Covered/Eligible Expenses—These are services, procedures, and supplies covered under the insurance plan. Covered does not mean paid in full by the plan but rather applied to the deductible, coinsurance, copay, out-of-pocket maximum, etc.
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Deductible—The amount of money you pay before services are covered by the insurance carriers. Services subject to the deductible will not be covered until it has been fully met. It does not apply to any preventive services, as required under the Affordable Care Act.
Emergency Room—Services you receive from a hospital or free standing ER for any serious condition requiring immediate care.
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Health Savings Account (HSA- A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums.
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Lifetime Benefit Maximum— Like the Annual Maximum, this is the most a plan will pay for covered services. This amount does not reset. Once it is met, no more benefits will be paid for anything that applies to that specific lifetime benefit maximum.
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Maintenance Medication—A prescription medication taken regularly to treat an ongoing condition, such as high blood pressure, high cholesterol, diabetes, and asthma.
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Medically Necessary—Health care services or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms, which meet accepted standards of medicine.
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Network Provider—A provider who has a contract with your insurer or plan to provide services at set fees. These contracted fees are usually lower than the provider’s normal fees for services.
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Non-Network Provider—Also known as an Out-of-Network Provider or Non-Participating Provider, a non-network provider is a provider who does not have a contract with your insurer. Services received at these providers are generally much higher than those received from a network provider. This is because they do not have a fee schedule or limit to what they can charge for their services. Plans generally reimburse non-network providers based on the Usual, Customary & Reasonable (UCR) limits. The member can be balanced billed for the difference and is responsible for the remaining charges.
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Out-of-Pocket Maximum—The most you will pay during a set period of time before your health insurance begins to pay 100% of the allowed amount. The deductible, coinsurance, and copays are included in the out-of-pocket maximum.
Prior Authorization—A process by your insurer or plan to determine if any service, treatment plan, prescription drug, or durable medical equipment is medically necessary. This is sometimes called prior authorization, prior approval, or precertification.
Prescription Drugs—Each plan offers its own unique prescription drug program. Specific copays apply to each tier and a medical plan can have one to five separate tiers. The retail pharmacy benefit offers a 30-day supply. Mail order prescriptions provide up to a 102-day supply. Sometimes the deductible must be satisfied before copays are applied.
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UCR (Usual, Customary and Reasonable)—The amount paid for medical services in a geographic area based on what providers in the area usually charge for the same or similar services.
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Urgent Care—Care for an illness, injury, or condition serious enough that a reasonable person would seek immediate care but not so severe to require emergency room care.