In its simplest definition, Health insurance is a means to mitigate the financial risk that arises from unforeseen expenses for healthcare (or a health risk). Typically, health insurance is offered as an annual subscription where by the subscriber or the sponsor of the subscriber makes monthly payments (premiums) to the insurer to cover the financial risk arising from a health risk. The health insurance plan purchased provide access to predetermined quantities of care in form of benefits. Key terms to understand
- Insurance sponsor: The entity that pays the premiums on behalf of the individual receiving the health benefits; Sponsors may be large and small employers, Medicare , State Medicaid agencies, Veteran’s Administration, Or the individual themselves. Employers provide health benefits for their employees and the employees’ families
- Premium: The monthly fee for the insurance. According to KFF.ORG the premiums covered by employer sponsored insurance for a single individual have risen nearly 3.5x since 2000 (from $6,438 to $22,463 in 2022); The employer vs employee contribution shares have remained about the same with some employer segments tipping higher towards the employee share of the premium.
- Deductible: The amount a member (or subscriber) must kick in for care, before the insurer pays anything. The lower the premium, the higher the deductible. Since 2003 the deductibles for a single individual have risen from $300 to $1700 in 2022 (nearly 4.4x); Cost share paid to out of network providers does not accrue towards the annual deductible or the out-of-pocket max.
- Co-pay: Member’s cost for routine services, co-pays do not apply to the deductible
- Co-insurance: The percentage that the member must pay for care after the member has met the deductible.
- Out-of-pocket maximum: The absolute max the member will pay annually. Co-pays and any cost shares paid towards out of network charges are not accrued towards the annual out-of-pocket maximum.
Over time, as the financial risk of care has increased with rising cost of care, the share of the cost born by the individual consumer has increased more than the cost share born by the employer or the insurance plan.
Coming soon –
- Different types of care sites and settings
- Searching for care professionals
- Preparing for appointment with a care provider
- Condition specific questions
Please submit your questions or suggestions to myhealthq@myhealthq.com
