Insurance Words, Explained Simply

The amount you pay every month just to have health insurance — whether or not you use it. Like a monthly subscription fee.

The amount you must pay OUT OF YOUR OWN POCKET for medical services each year before your insurance starts paying. Think of it as your "entry fee" before coverage kicks in.

A fixed amount you pay for a specific service at the time of the visit, like $20 for a doctor's appointment. It's separate from your deductible.

After you've met your deductible, coinsurance is the percentage of costs you still share with your insurance company. It's different from a copay — it's a percentage, not a fixed amount.

The most you will EVER have to pay in a single year for covered services. Once you hit this limit, insurance pays 100% for the rest of the year. It's your financial safety net.

In-network means a doctor or hospital has agreed to accept your insurance and charge set rates. Out-of-network providers haven't agreed — you pay much more or full price.

Permission your insurance company requires BEFORE you receive certain services, treatments, or medications. If you get care without this approval, insurance may not pay.

Your insurance plan's official list of covered prescription drugs. Only drugs on this list are covered at the expected price — drugs not on the list may cost much more or nothing.

Most insurance plans group drugs into tiers (1, 2, 3, etc.) based on cost. Tier 1 generics cost the least. Tier 3 or 4 brand-names cost the most. Your copay or coinsurance depends on the tier.

A document from your insurance company showing what was billed, what they paid, and what you might owe. It is NOT a bill. Do not pay it. It's just an explanation.

A request for payment submitted to your insurance company after you receive medical care. Usually your doctor submits this automatically — you shouldn't have to do it yourself.

A denial means your insurance refused to pay for a service or medication. An appeal is your formal request for them to reconsider the decision. You have the right to appeal every denial.

Your main doctor who handles routine care, coordinates referrals to specialists, and knows your overall health history. Also called a "family doctor" or "general practitioner."

An approval from your primary care doctor (PCP) that some insurance plans require before you can see a specialist. Without it, your insurance may not cover the specialist visit.

A specific window of time each year when you can sign up for, change, or drop health insurance coverage. Outside this window, you usually can't enroll unless you have a "qualifying life event."