Health insurance is a complicated business full of unfamiliar terms and loads of math. At its essence, though, it's really not that hard to understand. Making sense of health insurance requires knowing the types of plans available, knowing their rules and limitations and becoming familiar with commonly used terms.

Types of Plans

Know the types of plans and who they serve. Private health plans are the most common. These are the insurance plans people get as benefits from their employers. People can also buy private health plans for themselves. Medicaid is publicly funded health care for poor people and their families. Medicare is publicly funded care, generally for people older than 65.

Styles of Plans

Health care plans take one of three styles: HMO, PPO and POS. HMO stands for health maintenance organization. It provides care through a network of doctors and has lower out-of-pocket costs but limits your choice of doctors. PPO stands for preferred provider organization. This style contains a network of doctors available at discounted prices. Members have the freedom to see other doctors but will pay more for their services. POS stands for point of service and combines aspects of HMO and PPO plans.

Common Terms

Understand the common terms. A premium is the amount you pay every year to belong to the health plan. It is determined by several factors, including your age, your health history and whether you smoke. A co-payment is the amount you pay out of pocket for a particular service, such as a doctor's visit or emergency room visit. A deductible is the amount you must pay for a service before the provider contributes to the cost. A flexible spending account is a special type of savings account in which you put aside a portion of your earnings every week for medical expenses. Money you set aside in this account is nontaxable, but the money must be used by the end of the year.

About COBRA

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. This law allows people to keep their employer-provided coverage temporarily after being laid off or losing their job for a reason other than gross misconduct. COBRA also allows covered family members to retain their benefits temporarily after a person has died. COBRA coverage generally lasts 18 months but can last as long as 36 months under extenuating circumstances.

Source:

American Speech-Language-Hearing Association

agencyinfo.net

Department of Labor