Health insurance can be both wonderful and wonderfully frustrating. We all know how confusing it can be, especially when the New Year starts. Plans, networks and copays change – deductibles reset – referrals required…

How do you squeeze in the time to make sense of all this on top of your already busy lives?

We at Quality Family Physicians have decided to help by putting together this list of the most common health insurance terms.

Copay

• Fixed/flat fee that you pay each time you receive a health care service
• Fee is usually different for each type of doctor you see

Coinsurance

• Instead of a fixed fee, a percentage that you pay for a particular health care service
• Ex – your health insurance pays 80% of the cost, you pay the other 20%

Deductible

• Amount you must pay out of pocket toward health care services before your health insurer starts to pay for your health care services
• Usually starts over at the beginning of each year
• Ex – Your deductible is $250 and starts Jan 1. Office visit on Jan 7 costs $60 – typically you pay a $10 copay and your health insurer pays $50. Until you meet your deductible, you are responsible for paying the full $60. Therefore, after the Jan 7 office visit, you will still have to pay $190 ($250 – $60=$190 remaining) out of pocket toward your office visits until you have ‘met your deductible’ and your health insurer begins to pay.

Network

• Health care providers that contract with a health insurer
• Ex – Physicians, pharmacies, hospitals
• Depending on your insurance, your health insurer may not pay for services given by a health care provider who is “out-of-network”
• Your costs are almost always lower when using an “in-network” provider

Referral

• Process that we do for you and your health insurer so that your visit to another health care provider is paid for by your health insurer
• Specialist physician (ex – cardiologist)
• Physical therapy
• Please note – We cannot obtain a referral through your insurance until we know who you are going to see and when (you can submit this information on our website after you have made your appointment). After you give us that information, we call your insurance company to tell them where you are going, why you are going and when you are going. In turn, they give us an authorization number. Occasionally they will determine that it is not medically necessary for you to receive these services and deny the referral.

Precertification/Prior Authorization (Medication)

• Process that we do for you and your health insurer so that a ‘non-preferred’ or ‘brand name’ medication is paid for by your health insurer (see your insurance company’s formulary, list of preferred medication, for information on what medications are covered)
• The process typically involves you meeting a certain set of medical criteria set by your health insurer, us forwarding documentation of that criteria to your health insurer, review of the documentation by your health insurer and health insurer denial or approval.
• Prior to medication authorizations, your health insurer may request that you try/fail their ‘preferred’ medications first

Precertification/Prior Authorization (Testing)

• Process that we do for you and your health insurer so that certain tests (ex. CT scans, MRI, etc) are paid for by your health insurer
• Similar to Medication authorization above
• Prior to authorizing testing, your health insurer may require less expensive preliminary testing (such as x-rays) or Physical Therapy first

If you have any questions, just ask us!