10/ 30/ 2007
Health-care literacy doesn't stop at the doctor's office. You also need to understand your policy. Understanding the terminology most often used by insurers increases your and your employees' knowledge, which makes all of us more educated consumers of our health-care dollars. You can learn more about the terms most often used by medical providers and insurers from the National Association of Underwriters. In the meantime, review these simple definitions of common terms:
Premium: A prepaid payment for medical benefits made to a health plan by employers or employees.
Deductible: A flat amount a policyholder pays for covered services before insurance begins to share the cost of those services.
Co-payment: A fixed amount a policyholder must pay out-of-pocket for a specified service at the time the service is rendered.
Claim: An itemized statement of services and their costs provided by a hospital, physician's office or other provider. Claims are submitted to the insurer (either by the policyholder or the provider) for payment of the costs incurred.
Pre-certification: Authorization to deliver health-care service issued before any service is rendered. Making sure the service was authorized is the responsibility of the policyholder. Failure to receive authorization can result in your insurance company denying the claim.
Underwriting: A process performed by the insurance company to determine if and on what basis an insurer will accept an application for insurance.
Explanation of Benefits: A document sent to an insured (the patient) when the plan or insurance company handles a claim. The document explains how reimbursement was made or why the claim was not paid, and if any additional information is needed. The appeals procedure should be outlined to advise the insured of his/her rights if there is dissatisfaction with the decision.
Network providers: Limited grouping of providers in a managed-care arrangement with several delivery points. Enrollees may be required to use only network providers or may incur additional costs for using out-of-network providers for medical services.
Find out more from NFIB's health-care team at http://www.NFIB.com/page/healthcarecorner.html.
