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from wikipedia.org

A Health insurance policy is a contract between an insurance company and an individual. The contract can be renewable annually or monthly. The type and amount of health care costs that will be covered by the health plan are specified in advance, in the member contract or Evidence of Coverage booklet. The individual policy-holder's payment obligations may take several forms:

  • Premium: health insurance denver The amount the policy-holder pays to the health plan each month to purchase health coverage.
  • Deductible: The amount that the policy-holder must pay out-of-pocket before the health plan pays its share. For example, a policy-holder might have to pay a $500 deductible per year, before any of their health care is covered by the health plan. health insurance denver It may take several doctor's visits or prescription refills before the policy-holder reaches the deductible and the health plan starts to pay for care. health insurance denver
  • Copayment: The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. For example, health insurance denver a policy-holder might pay a $45 copayment for a doctor's visit, or to obtain a prescription. A copayment must be paid each time a particular service is obtained. health insurance denver
  • Coinsurance: Instead of paying a fixed amount up front (a copayment), the policy-holder must pay a percentage of the total cost. For example, the member might have to pay 20% of the cost of a surgery, health insurance denver while the health plan pays the other 80%. Because there is no upper limit on coinsurance, the policy-holder can end up owing very little, or a significant amount, depending on the actual costs of the services they obtain.
  • Exclusions: health insurance denver Not all services are covered. The policy-holder is generally expected to pay the full cost of non-covered services out of their own pocket.
  • Coverage limits: Some health plans only pay for health care up to a certain dollar amount. health insurance denver The policy-holder may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some plans have annual or lifetime coverage maximums. In these cases, the health plan will stop payment when they reach the benefit maximum, health insurance denver and the policy-holder must pay all remaining costs.
  • Out-of-pocket maximums: Similar to coverage limits, except that in this case, the member's payment obligation ends when they reach the out-of-pocket maximum, and the health plan pays all further covered costs. health insurance denver Out-of-pocket maximums can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year. health insurance denver
 

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