The words and terms used in the healthcare payments industry, for even the most experienced consumers, can seem like a foreign language. We want to make it less complicated. The better you understand the common terms thrown around in the healthcare space, the better prepared you are to secure the healthcare you deserve.
That’s why we’ve curated some of the most important healthcare terms from reliable sources for you. The following terms are defined by the Centers for Medicare and Medicaid Services (CMS) and Healthcare.gov.
- Allowed Amount
- The maximum amount a plan will pay for a covered healthcare service. This may be called “eligible expense,” “payment allowance” or “negotiated rate.” If your provider charges more than the allowed amount, you may have to pay the difference out of pocket.
- Balance Billing
- When a provider bills you for the difference between the provider’s charge and the allowed amount. The amount shown on this bill indicates the total out-of-pocket expense you should contribute for that service.
- A fixed amount (e.g. $15) you pay for a covered healthcare service. Generally, plans with lower monthly premiums have higher copayments, and plans with higher monthly premiums have lower copayments. The copayment for a High Deductible Plan only activates once you meet the deductible.
- The amount you pay annually for covered healthcare services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services out of pocket. After you pay your deductible, you usually pay only a copayment or coinsurance for covered services. Your insurance company pays the rest.
- Episode of Care
- The total set of services needed to provide treatment for a specific condition.
- A complaint that you communicate to your health insurer or plan.
- High Deductible Health Plan
- A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more healthcare costs yourself before the insurance company starts to pay its share (your deductible). The IRS defines a high deductible health plan as any plan with a deductible of at least $1,300 for an individual or $2,600 for a family.
- In-network Providers
- Healthcare providers (e.g. physicians) or facilities that contract with your health insurance or plan. In-network expenses are typically lower than out-of-network expenses.
- A federal health insurance program for people 65 and older and certain younger people with disabilities.
- Learn more on Medicare at https://www.healthcare.gov/medicare/
- Out-of-network Providers
- Healthcare providers (e.g. physicians) or facilities that do not contract with your health insurance or plan. Your insurance may still pay a certain amount of out-of-network expenses, but overall out-of-network expenses are typically higher than in-network expenses. The remaining out-of-pocket balance, not covered by insurance, is referred to as balance billing.
- Out-of-pocket Costs
- Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren’t covered. If you are uninsured, all medical expenses are considered out-of-pocket costs.
- Pre-existing Condition
- A health problem you had before the date that new health coverage starts, including common conditions such as asthma, cancer and heart disease.
- The amount covered individuals pay for their health insurance every month.
- A physician (M.D. – Medical Doctor or D.O. – Doctor of Osteopathic Medicine), healthcare professional or healthcare facility licensed, certified or accredited as required by state law. Providers help us get the healthcare treatment we need to get better and stay healthy.
- A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions. A non-physician specialist is a provider who has more training in a specific area of healthcare.
Although this list isn’t comprehensive, it’s a great starting point to keep your mind at the forefront of financing the unexpected. Find exact healthcare costs today.
Our information on healthcare costs may differ from fees paid through a health insurance plan. The fees may differ for each insured person, and may be lower or higher than the actual costs listed in the service. If you are covered under a health insurance plan, please check with your health insurance network to compare the amount of the service cost(s) your insurance will cover with the service cost(s) listed on HealthCost.com.