Health Insurance Terms That You Need To Understand

Health insurance is essential for most people, but only some understand it. It comes with a lot of words and terms that make people confused about it more than ever.

But, it is important to know and understand what is included (and what is not) in your insurance policy. Having knowledge about your plan can be beneficial for you when the time comes.

Here are some common terms and their definitions to help you understand your plan.

Prior Authorization

This happens when your insurance company look into your medication if it is included in your coverage. They need to make sure that you have the right medication. You need prior authorization if your drugs:

• May be toxic when ingested together with other drugs.
• Are usually abused or misused.
• Are taken only for specific medical disorders.
• May cause adverse side effects.

HMO/PPO

These refer to Health Maintenance Organization and Preferred Provider Organization. You can use your HMO to see a specialist, but you need to get a referral from your primary healthcare provider first. You should adhere to this guideline, except in emergency cases.

It is more flexible with PPO. You do not need to get a referral to see a specialist outside your network, though it can cost you more.

Step Therapy

This is when you initially take some medications for low prices, then step up to higher-priced drugs. For example, the drugs prescribed by your doctor are not effective in relieving your condition. You can try costly drugs through step therapy. But, you should try the initial prescription drugs first and show that they are ineffective to you, in order to get covered.

HRA/HSA

You can typically get HRA (Health Reimbursement Arrangement) through your employer. It refers to the fund that your employer will use to reimburse your medical expenses that are not included in your health insurance.

On the other hand, Health Spending Account (HSA) is the money that you allocate in your account to be used for your medical expenses.

Coordination of Benefits

There are times when you need to buy another type of insurance in addition to the one you already have. If you have two plans, it should benefit you twice over by taking advantage of both coverage. The coordination of benefits help you utilize these two plans by making them work together.

The terms above are essential and beneficial for you in the concept of insurance. It pays to understand what you are getting from your health insurance. At Choice Enrollment, we put our clients first by offering them policies that they can afford. Learn more about our policies and services by calling our agency at (719) 481-1616​. You can also request for a free quote by CLICKING HERE.