New Year, New Coverage: Understanding Your Health Insurance

As the calendar flips to January 1, many of us embark on new beginnings—whether it’s resolutions, goals, or health insurance coverage.  If you’re starting a new health insurance plan this year, now’s the perfect time to familiarize yourself with some key terms to make the most of your policy.  Understanding these concepts can empower you to use your coverage confidently and avoid unexpected costs.

Here are a few important health insurance terms to know:

1. Premium- This is the amount you pay each month for your health insurance plan, similar to a subscription fee. Think of it as your ticket to access coverage—even if you don’t visit the doctor, this payment keeps your insurance active.

2. Deductible- Your deductible is the amount you need to pay out of pocket for certain healthcare services before your insurance starts covering the costs. For example, if you have a $500 deductible, you’ll pay up to that amount for eligible expenses before your insurance kicks in.

3. Copayment (or Copay)- A copay is a fixed amount you pay for specific services, like a $20 fee for a doctor’s visit. 

4. Coinsurance- This is the percentage of costs you share with your insurance after meeting your deductible.  For example, if your plan covers 80% of a service, you’re responsible for the remaining 20%.

5. Out-of-Pocket Maximum- This is the most you’ll pay in a plan year for covered services.  Once you hit this limit, your insurance pays 100% of your covered costs.  It’s a safety net that protects you from excessive medical expenses.

6. Right to Appeal a Denial- If your insurance plan denies coverage for a service or claim, you have the right to appeal the decision.  You can request an internal appeal, where your insurer reviews their decision, including the option for an expedited internal appeal.  You also have rights to an external appeal, which is reviewed by an independent third party. These rights ensure that you have a fair process to challenge decisions about your coverage.

*Remember: Always consult your Summary of Benefits and Coverage (SBC). This document outlines the terms of your policy, including the benefits covered and your cost-sharing amounts. It’s a handy guide to help you understand what your plan does and doesn’t cover, empowering you to make informed decisions about your healthcare. Pro Tip: Save your plan’s customer service number in your phone.  Representatives can answer questions and help clarify confusing details.

Why It Matters

Understanding these terms can help you avoid surprises and budget for the care you need.  Take a moment to review your plan’s Summary of Benefits and Coverage (SBC)—a handy guide that breaks down what’s covered, what isn’t, and your financial responsibilities.

Let’s make 2025 the year of empowered, informed healthcare decisions!  New year, new coverage, and a fresh start for your health.

What health insurance term do you want to understand better this year?  Let us know!