6 Most Important Health Insurance Terms You Should Know

Traditional health insurance is probably the most important insurance policy you will ever have, no matter your age. Understanding it will help you navigate health care throughout your life.

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6 Most Important Health Insurance Terms You Should Know
4 Min Read December 22nd, 2022

Health insurance can be tricky to navigate, especially when deciphering all of the jargon and terms involved in a policy. From deductibles and premiums to co-pays and co-insurance, it's easy to get overwhelmed. 

There are a lot of health insurance terms that need to be clarified, especially if you're new to the world of insurance. To help make things simpler, we've put together a list of six important health insurance terms that you should know. 

Familiarizing yourself with these tips and terms can help you save money on your premiums and out-of-pocket costs whenever you visit your nearest doctor's office. 

So, whether you're new to the world of health insurance or simply looking for a refresher, this guide is for you. To make things easier, here are six of the most important health insurance terms you need to know!


Finding a good, registered doctor near you or taking a trip to the Dr office needs your focus and time. Parallelly, while looking up medical offices near you, the financial cost of bills and treatment can start pre-occupying your mind. But this is nothing to worry about if you are familiar with the terms of your medical insurance and know the best ways to use it. 

When buying health insurance, you must understand the types of payments you might be responsible for. A co-payment, or co-pay, is a fixed amount you must pay each time you visit the doctor or fill a prescription. 

This is one of the many terms you'll need to know before buying health insurance. Make sure to do your research and ask lots of questions to find the best plan for you.

In 2020, 91.4 percent of the population had health insurance for full or part of the time. This count is increasing day by day. 


A deductible is the money you have to pay out-of-pocket prior to your insurance provider starting to pay its share of the costs. 

There are several considerations to make when it comes to deductibles:

  • The higher your deductible, the lower your premiums (monthly payments) will be.
  • You may be able to lower your deductible if you agree to pay a higher premium.
  • Some services, like doctor's visits, may not have a deductible.


Co-insurance is the percentage of a medical bill you're responsible for after meeting your deductible. For example, if you have a 20% co-insurance and your bill is $200, you would be responsible for $40.

This can be tricky because it means that even if you have met your deductible for the year, you still might have to pay co-insurance on top of that. Make sure to read your policy carefully to see what your co-insurance is. Typing in a patient’s co-insurance is a major part of the medical billing process. What is the medical billing process? It’s the process of generating health care claims to submit to insurance companies for the purpose of obtaining payment.

Out-of-Pocket Maximums

Your out-of-pocket limit is the most you'll have to spend annually for covered procedures. Your health insurance plan will pay 100% of the costs for eligible treatments after your out-of-pocket maximum has been reached.

So, if your out-of-pocket maximum is $3,000 and you've already paid $2,500 in deductibles, co-payments, and co-insurance, you'll only have to pay $500 more before your health insurance plan pays 100% of the costs.

In-Network Providers

When you have health insurance, you want to ensure that your money is being used as efficiently as possible, which means using in-network providers. 

That means that if you use an in-network medical office, you'll likely pay less out of pocket than if you go to a medical center that isn't in your network. 

So how do you know if a provider is in-network? The best way is to check with your insurance company. Once you find your preferred doctor with a simple Google search stating "medical centre near me," call your insurance provider to know if your doctor is an in-network provider. 

They should have listings of doctors and medical offices who are in-network providers on their website or be able to give you a list over the phone.

Once you've found a provider you like, it's always a good idea to double-check that they're still in-network before making an appointment. Things can change, and you want to avoid being stuck with a hefty bill because your doctor is no longer in-network.

Claims and Reimbursements

Now that you know the basics of health insurance let's talk about some of the specific terms you'll need to know. We'll start with claims and reimbursement.

A claim is a demand for compensation that you submit to your insurance company. Your insurance company will then review the claim and decide how much, if any, of the expenses they will reimburse you for.

It's important to note that not all claims are alike. Some claims are simple, while others can be more complex. For example, if you have a pre-existing condition, your insurance company may require additional information before processing your claim.

You will be compensated if your claim is accepted, and you receive a reimbursement check from your insurance company. This check will be for the amount that your insurance company has approved for you to receive.


Health insurance is important in ensuring that you and your family are covered in case of illness or injury. 

By familiarizing yourself with these six key terms, you can ensure that you have the right coverage for your needs.

We trust this has clarified things for you and the six most important health insurance terms. As you can see, each term is important in its way. Be sure to consult an insurance agent to learn more about health insurance and find the right policy for you and your family. 

Health insurance is a complex topic, but it's important to understand the key terms. With this knowledge, you'll be able to make informed decisions about your health insurance coverage the next time you visit your nearest doctor.


  1. What should be your top priority while selecting a health insurance strategy?

When choosing an insurance plan, there are several variables to consider, but the two most important ones are cost and coverage. 

First, you should confirm that the providers you use or want to use (the doctor nearest to your location, your preferred primary care physician, specialists, hospitals, etc.) are in-network and included in the plan you select. 

  1. What factors are most crucial while selecting health insurance?

You should consider the monthly premiums, the provider network, the prescription formulary of each plan, and the anticipated out-of-pocket expenses, depending on your needs. The ideal strategy for your demands and budget will be determined by considering them all.

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Editor's Note

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Many complications come up when someone needs long-term health care. Two major concerns are who will provide the care and how the care will be paid for. Since long-term health care costs are expensive and family members are usually unable to provide quality care, especially for a long period of time, having a plan is vital.

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