Shopping for Health Insurance: Understanding Important Terms

Shopping for health insurance is a big deal. You don't want to rush through the process, because you want to make sure that you understand exactly what you're getting and that you choose the coverage that makes sense for your medical needs. Luckily, there are many health insurance providers out there. Keep reading to better understand important terms so that you can easily shop for the health insurance coverage that you need: 

In-Network and Out-of-Network 

When you begin to shop around for coverage, you may notice in-network and out-of-network listed in the policy details. Doctors and other medical professionals who operate in your health insurance network accept your insurance. Out-of-network doctors and medical professionals may not take your insurance, or they may accept it, but it will cost you a lot more money to receive care because they don't typically take your insurance coverage. It's generally better to choose a health insurance plan that has doctors and medical professionals who accept your insurance coverage. This keeps the cost of medical care down. 

Premium

When you see health insurance options, you'll be presented with plans and a premium will be listed. This is the amount of money that you pay monthly to keep your policy active. You'll need to continue to pay this amount each month, just like any other kind of bill.

Deductible

Another important term that you may see listed is deductible. A deductible is an amount that you will need to pay before the insurance company takes over the rest of the costs. Many insurance plans have a deductible in place. For example, if your coverage has a $5,000 deductible, you will need to first pay $5,000 worth of insurance costs before your health insurance covers any other costs. If you get a hospital bill for $12,000, you would be responsible for $5,000 of that bill on your own.

Coinsurance 

Some health insurance policies require coinsurance. This is when you share the cost of medical expenses. For example, a policy with 20% coinsurance in place would require you to pay 20% of the costs of care, and the insurance company would then pay 80% of the costs of care. 

Understanding these important terms will help you choose a health insurance policy that meets your needs. If you're ready to invest, be sure to compare health insurance coverage options so that you have a plan that works well for your budget and your needs.