by Edwardo Sneneh, Illinois Insurance Agent, Chicago

Health insurance is one of the most important issues in the life of Americans, yet many individuals do not fully comprehend certain important aspects of their health insurance policy. Understanding health insurance terminology will allow you to take better decisions about coverages. It will allow you to better file your insurance claims and prevent you from making costly claim procedures.

Regardless if you have an individual policy, or you are part of a group benefits, many of the .  As long as you know what these terms mean, and how they determine your benefits, you will be able to understand the explanation of benefits that you get from the insurance provider.  Knowing policy terminology will also help you decide if certain test and procedures would be affordable and covered on your possible.
 InsuranceNavy is a Chicago, Illinois based agency and a leader in the Illinois Health  Insurance, Hospital Insurance and Illinois Major Medical Insurance. Our agency represents several health insurance carriers in the States of Illinois, and is offering its services through several locations in the Chicago area.

For fast and free consultation, quick quotes please call one of our licensed health insurance agents at:

(708) 233-4848

The following are the few important terms everyone should familiarize themselves with:

Health Insurance Policy Deductible: The amount specified by your health insurance company that the insured person or member must pay first  before the insurer pay anything.  The range of deductible is from $0 to $5,000. The normal deductible is $500 to $1,000. Deductibles can be per calender year or, less common, per claim. Higher deductible means lower monthly premiums.

Health Insurance Out Of Pocket Expense: This is the amount of money (sometimes expressed as a percentage of certain amount (ie 20% of the first 5,000) that the insured may pay as a maximum out-of-pocket, before the insurance will pay at 100%. 

Example:  If there is a deductible of $1,000 on a policy with a coinsurance rate of 20% of the first $5,000 then the out of pocket expense of $1,000 (20% X 5,000).  If the customer incurs a medical bill of $4,000 then the customer will pay the first $1,000, then 20% of the remainder ($3,000) or $600 as a coinsurance. The remaining balance of $2,400 (4,000 less 1,000 less 600) will be paid by the insurance company. The customer, in this example, is not supposed to pay more than the deductible plus the additional $1,000 out of pocket, even if the bill is much larger.

Co-Pay: Co-pay is a set fee set up by the insurance company to pay for a doctors visit, or trip to the emergency room.  Typical doctor office visit co-pay is $20 per visit, and typical emergency room copay is $75 per visit.

In Network / Out of Network: Every health insurance, major medical policy will have a group of medical and health care providers (physicians, medical facilities, and hospitals) that are considered to be a part of their network. Insurers may use different networks for their different plans.  Using different health network may subject the insured to pay higher deductibles, higher coinsurance (out of pocket maximum), and higher co-payments.

Major medical and other hospital insurance policies have other rules regarding alcoholism rehab, mental health, drug rehab, and outpatient surgeries. Those rules are normally stipulated in benefit booklet.  All health insurance companies have customer service numbers with professional people who may answer your questions.
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