Blog Post  Health Insurance Terms

Insurance can be intricate and difficult to understand with varying policies, providers and requirements. A common understanding of frequently used terms between consumers and insurance providers can be very helpful in paving the way for clear and effective communication. That’s why we’re breaking down some health care terms that are advantageous to know:

• Benefit Limit – A specified limit on the visits or dollars allowed for a specific covered service.

• Co-insurance – A percentage of the allowed charge, after a copayment, if any, that an insured will pay for covered services under a health benefit plan.

• Co-payment – A fixed dollar amount paid by an insured to a physician, hospital, pharmacy or other health care provider at the time the insured receives covered services.

• Deductible – An annual dollar amount that must be paid by an insured for specified health care services that the insured uses before the health plan becomes obligated to pay for covered services. Some health plans may include separate prescription drug deductibles. The deductible amount does not include the premiums that the insured pays.

• Eligible Dependent – The spouse or child of an eligible person, individual or eligible employee, subject to the applicable terms of the health plan covering such individual or employee.

• Mandated Benefit – A health service or category of health service provider that a carrier is required by its licensing or other statute to include in its health plan.

• Medical Necessity or Medically Necessary – Health care services that are consistent with generally accepted principles of professional medical practice as determined by whether (a) the service is the most appropriate available supply or level of service for the insured in question considering potential benefits and harms to the individual; (b) is known to be effective, based on scientific evidence, professional standards and expert opinion, in improving health outcomes; or (c) for services and interventions not in widespread use, is based on scientific evidence.

• Preventative Health Services – Any periodic, routine, screening or other services designed for the prevention and early detection of illness that a carrier is required to provide pursuant to Massachusetts or federal law.