So Many Acronyms…Finally a Common Sense Explanation of Medical Insurance Plans

When you are trying to find the most affordable medical insurance, you need to understand some basic terms so you know you are comparing apples to apples and coming up with accurate answers. Several terms are very commonly used in medical insurance policies that can reduce the confusion and make it much easier to choose the best coverage and most affordable health coverage available.

· Benefit - the amount the insurance company pays when the insured suffers a loss

· Benefit period - the benefit period is the amount of time involved in an individual claim. In the case of hospitalization, for example, the benefit period begins the first day of the hospital stay and ends when the patient is released from the facility. The benefit period will often extend for up to 60 days after release from a hospital or other qualified facility, counting any return to the facility as part of the original claim.

· Cafeteria Plan - a plan that offers a choice between two or more benefits or a choice between a benefit or cash

· Claim - a request by an individual or their provider to the insurance company to pay benefits for a loss

· COBRA - a federal law that allows employees to continue their insurance coverage after it would normally terminate for up to 18, 24, 29 or 36 months. When a former employee chooses to continue COBRA coverage, they must pay for it themselves. (COBRA insurance is generally expensive and not an affordable health coverage option for most people.)

· Co- Payment - a co-pay is the money paid by the insured person when they see a doctor or fill a prescription. It is usually a small amount and it doesn't count as part of a deductible or maximum amount paid by the insured.

· Deductible - a deductible amount is generally chosen by the insured and can be as small as $500 (or less) or as high as several thousand dollars. The insured party must pay the deductible amount annually before the insurance company pays their share of the bills.

· Flexible Spending Accounts: With a flexible spending account, an employee can choose an amount to be withheld from their paycheck to cover reimbursement of certain medical expenses their health insurance doesn't pay. Flexible Spending Account money is taken out of the employee's check before taxes are assessed.

· Grace Period: the time period that follows the premium due date when the coverage and policy remain in force.

· Health Maintenance Organization (HMO): a medical organization providing a wide range of widespread health care services for a specified group of enrollees for a fixed, pre-paid premium.

· Managed Care: coordination of financing and delivery of health care services to produce quality yet affordable health care coverage. Managed care puts limits on the use of services and the charges of providers.

· Out-of-Network Care: medical services obtained by managed care plan members from non-contracted health care providers. In many plans, such care will not be reimbursed unless the insured obtains previous authorization.

· Out-of-Pocket Maximum: This refers to the total amount of money an insured is required to pay toward their medical expenses on their own. Out of pocket maximums are typically an annual amount.

· Preferred Provider Organization (PPO): managed care arrangement consisting of a group of hospitals, physicians and other providers contracted with an insurer, employer or other group to provide health care services to covered persons in exchange for prompt payment and higher patient numbers.

While there are many other terms used throughout the medical insurance field, these are some of the ones you can expect to find. Understanding these and other common insurance terms will help you determine the most affordable medical insurance for your individual needs.

Tom Carolan is the Director of Client Services at http://www.BestHealthcareRates.com. Check out our free quote tool to get an affordable medical insurance quotes from top companies in your region.1-877-812-5111.