Learn the Language of Health Insurance Plans

There are lots of different kinds of health insurance, from plans that cover medical services and prescription medicines to plans that cover dental expenses; disability insurance that replaces income lost due to extended illness or injury to long-term care, and so on.

"In the United States, people typically refer to the plans that cover medical expenses as 'health insurance,' and these plans are usually bought by employers and offered to employees as part of their compensation, or 'benefits,' "says Kurt Stammberger, vice president of marketing for Vimo, a company that provides comparison shopping information for health insurance.

Health insurance plans are usually sold once, then renewed on an annual basis. So when a consumer buys health insurance (either directly or through an employer), the insurer agrees to pay for health expenses as long as the premiums are paid on time and the account is in good standing.

Health insurance plans come in two flavors: "fee-for-service" or "managed care". Both types of insurance cover major medical, surgical and hospital expenses, and are often referred to as "major medical plans."

Fee-for-service plans pay the medical service provider a fee for each service provided to a patient, and that patient can usually go see whatever health care provider they wish. Managed care plans, on the other hand, pre-pay contracted providers for each member's coverage in advance. Members are offered a financial incentive to use providers who belong to the plan.

Here are a few common terms that you'll probably run into:

Deductible - This is the amount you must pay out-of-pocket before the insurer will pay anything. Deductibles can vary widely, ranging from nothing to a few thousand dollars.

Co-insurance amount - This is the percentage of your medical expenses you must pay after you reach your deductible. This will typically range from 10 percent to 30 percent.

Maximum out-of-pocket amount - This is a maximum amount you are required to pay in a given year, after which the insurer will pay 100 percent of the cost of covered medical expenses.

Covered benefits - Types of medical services the insurer will pay for.

Exclusions - Types of medical services the insurer will not pay for.

"It's true: there's a lot of jargon, and plans are difficult to evaluate and compare," says Stammberger. "But it's important, and worth your time. Carefully review plan descriptions, and take your time to understand the coverage of any plan you're currently under - or considering purchasing."

To comparison shop for a health insurance plan that's right for you, go to www.vimo.com.

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