Confused by the jargon of the health insurance industry? Here's some help.
Coinsurance: A percentage of the bill that you have to pay directly. For example, if your coinsurance for hospitalization is 20% and your hospital bill is $10,000, you will owe the hospital $2,000.
Copayment: A fixed amount that you have to pay directly. For example, you may have a copayment of $20 for each doctor visit.
Cost-sharing: The insurance industry term for the combination of coinsurance, copayment and deductible that you are responsible to pay under your policy.
Deductible: The annual amount that you have to pay out-of-pocket before your insurance kicks in.
EOB: Explanation of Benefits. This is a form from your health insurer that tells you what the health care provider charged, what they paid under the contract between the provider and your insurer (usually there's quite a difference), and what you likely owe the provider. The provider can't usually charge you more than what the EOB says you owe to the provider. This form will also have information about your appeal rights if your claim is denied.
Health Maintenance Organization (HMO): An insurance arrangement in which a network of providers agrees to provide your health care. If you go "out of network" (see below), you are out of luck.
Health Savings Account: An account you can set up to cover the cost-sharing amounts on a pretax basis. Unlike a flexible spending account, you don't have to use all amounts in a health savings account in one year and can save up for future health expenses. A health savings account can only be used with a high-deductible health plan.
Out of Network: Seeing a physician or going to a hospital that is not under contract with your plan. Network providers will be listed in your plan's provider directory.
Point of Service (POS): A specialized kind of HMO plan that does provide some limited coverage for out of network services, usually with higher cost-sharing. Very similar to the Preferred Provider Organization.
Preferred Provider Organization (PPO): An insurance arrangement in which you get a higher level of coverage for seeing a provider in the network, but get some coverage for out of network providers.
Primary Care Provider (PCP): A physician who specializes in family medicine or internal medicine (or pediatrics or gynecology, for patients under 18 or women respectively). In some areas, a PCP could be an advanced practice nurse rather than a physician.