Does it sometimes seem as though the health care and health insurance industries speak their own language? They do! Let us try to explain health insurance terms in plain English.
What is an HSA?
HSA stands for health savings account.
A health savings account, or HSA, is a bank account that allows you to set aside pre-tax money for your health care (along with a few other tax advantages). To open and use an HSA, you must be enrolled in a qualified high-deductible health plan (HDHP), such as any BridgeSpan plan with the title "HDHP" in it. Read more about HSAs and HDHPs.
What is an AHN?
An accountable health network, or AHN, refers to a group of providers who collaborate, communicate and focus on your care. It's just like a network (see below), only it's more proactive about coordinating care tailored just for you.
BridgeSpan AHN plans are available in four counties in Washington state. For more information about networks, and how to understand what's in-network and out-of-network, visit Your provider network.
What is a premium?
A premium is the recurring fee you pay to have health insurance.
Usually, people pay their premiums each month, but it can vary. If you have health insurance through your employer, your share of premium is deducted out of your paycheck. If you buy directly from an insurance company or have a marketplace health insurance plan from BridgeSpan Health, you may choose how to set up your payments.
What is a copay?
A copay is a set price that you pay to health care providers for each office visit.
Note: You may be responsible for more than a copay after a visit.
During your visit, your doctor may need to go beyond having a conversation and basic exam. She or he might order or perform additional services such as:
- Diagnostic tests
- Stitches or minor surgeries
- Blood tests
The cost of those services isn't included in your copay, and they'll be billed separately.
Copays do not count toward your health plan's annual deductible.
Watch the short "What's a copay?" video to the right to find out how your copay works.
What is a deductible?
A deductible is the amount you must pay toward your health care costs before your health insurance starts sharing the cost of care. Your health insurance deductible is an annual expense of your health insurance plan.
Because health insurance is a way to manage the financial risks of illness and injury, your plan's deductibles are one of the ways for you to choose how much of that risk you're willing to manage.
What is coinsurance?
A very common question people have when comparing health insurance plans is "What does coinsurance mean?" Coinsurance means sharing. When you see coinsurance on a plan description, it means that you will share costs with the health insurance company for covered services and claims.
Once your out-of-pocket spending for covered medical expenses has reached your annual deductible (see What is a deductible? above) amount, coinsurance starts paying a portion of your remaining covered medical expenses for the year.
You'll see coinsurance shown as a percentage on a plan description.
A 10 percent coinsurance, for example, means your insurer pays 90 percent of covered costs—but only after you've paid enough of your health care bills to meet your annual deductible. After you meet your deductible, your insurer pays 90 percent and you pay 10 percent.
Generally, the more you pay for your premiums, the lower the coinsurance that you have to pay out of pocket for health care bills.
What is a covered service?
A covered service refers to a drug, office visit, supply, test, equipment or course of treatment that your health insurance covers.
Some health insurance plans cover medical services that other plans don't. One example is a group plan where the employer decides which benefits to cover and which to exclude. One group might consider bariatric surgery medically necessary and cover that service. Another group may decide not to cover bariatric surgery because adding benefits means increasing the premium for everyone.
There are several reasons why a service might not be covered. One reason is that the latest scientific evidence suggests that a particular service has limited medical value or perhaps has not been proven as effective as other treatment options.
Other medical services aren't covered because, while they might improve your well-being, they don't present a direct benefit to your physical health. Examples include cosmetic surgery and certain reproductive medicine procedures.
It can be frustrating when a service that is recommended by your doctor is not covered by your health insurance plan. At BridgeSpan Health, we put very careful and ongoing consideration into what our health plans should cover to balance our members' desire for both coverage and affordability.
What is a claim?
A claim is a request for payment or reimbursement for services you received.
When you receive medical attention, you or someone on your behalf (such as a doctor) submits a claim to your health insurance company asking payment for the medical goods or services you used.
Your insurance company processes the claim by matching it against the details of your policy, such as your deductible, your coinsurance, the network status of your health care provider and your plan benefits.
After processing the claim, your health insurance company will pay the health care provider its share of the bill (or will pay you directly if it's a reimbursement claim). You will then be responsible for paying the balance, if any. The insurance company sends you an Explanation of Benefits statement that describes exactly how much of the claim it paid and what you may owe.
What is an out-of-pocket expense?
Health insurance plans are not designed to pay for every medical expense you'll have during the year. The difference between what we pay toward your health care costs and the total amount owed for your health care costs is what you have to pay—that's your out-of-pocket expense.
Here are some examples of out-of-pocket expenses:
- Pre-deductible expenses: At the start of the year, most of your health care spending is not paid—until you've reached your annual deductible. Your out-of-pocket expenses on covered services count toward your deductible.
- Coinsurance: Once your spending has reached your annual deductible, a percentage of your covered health care expenses is paid by your health insurance plan. This is called coinsurance. For example, if your plan covers 80 percent, then you are responsible for 20 percent of expenses. Your percentage is an out-of-pocket expense.
- Noncovered services. Some health care expenses—like chiropractic, vision and alternative care—may not be covered by your health insurance plan. In those cases, you're fully responsible for paying out-of-pocket for those services.
Watch the short "What is an out-of-pocket expense?" video to the right to understand more about out-of-pocket expenses.
What are prescription drugs?
Prescription drugs are regulated by the Federal Food, Drug and Cosmetic Act of 1938. The regulation states which medicines and dosages require a prescription. Medicines that don't require a prescription are known as over-the-counter (OTC) medications.
What is a formulary?
Formulary is a fancy way of saying, "list." Your health insurance formulary is simply the list of prescription drugs—both generic and brand-name drugs—that are pre-approved for your health insurance plan. If a drug isn't on the list, it's considered nonformulary.
At BridgeSpan, we closely follow both the cost and effectiveness of drugs in the marketplace. We use that data to select which drugs will be part of your prescription coverage.
What is a pool?
Health insurance gathers the individual premiums of many people into one fund, known as a pool, and then uses money from that pool to pay for the health care needs of members of that particular pool.
Your insurance company has many different health insurance pools. How you get health insurance determines which pool you're in. If you purchase an individual or family plan, you're placed in the very large pool of members in your area that also purchased an individual or family plan. If you get health insurance coverage through your employer, you might be in a much smaller health insurance pool that's exclusive to others covered under your employer's health insurance plan.
What is coordination of benefits?
Coordination of benefits, or COB, applies if you have more than one medical, vision, pharmacy or dental health plan. When you have multiple types of health insurance plans, your health insurance companies will coordinate benefits with each other to help you receive the full benefit of those plans. This helps avoid overpayment by either plan and is one of the ways your health insurance companies work to keep premiums lower.