How many times have you looked at a summary sheet from you health insurance provider or a statement from your most recent doctor’s visit and felt like you were trying to read a foreign language?  We have put together a short list of the most common terms thrown around in the Health Insurance world and provided brief definitions to help you better understand what they mean to you.

Premium: The monthly cost of the medical insurance.  Depending on what type of plan you are on this is either paid by you entirely or the cost is shared by your employer.

Deductible: The amount that each member must pay yearly for covered services BEFORE the plan begins to pay.  After you hit your deductible you pay only your portion of the co-insurance.

Co-Insurance: The shared cost of insurance so that you and your insurance company share the risks.  This translates into the insurance company paying a certain percentage of your health care bills, while you pay the remaining percentage.  The percentage of co-insurance varies based on the plan.

Co-Payment: This is the fixed fee for utilizing in-network services such as doctor’s office visits or prescriptions.  Under some plans this is outside of the deductible and on others you have to meet your deductible before only having to pay the co-payment.

Out of Pocket Maximum: This is the dollar limit that YOU have to pay  out of pocket for all covered services during the calendar year.  This usually includes your deductible.

Formulary: A carrier specific list of preferred covered drugs which may include both generic and brand name medications.  Most times, members pay less for formulary versus non-formulary drugs.

If you need any assistance “deciphering” the various aspects of your health insurance plan please feel free to contact us at erinhaubner@wealth-mgt.net or briandamiani@wealth-mgt.net or via phone at (925) 462-6007.

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