Insurance Terminology

Health insurance can be confusing. This guide explains common insurance terms you may see on your insurance card, Explanation of Benefits (EOB), or medical bill.

📖 Why Understanding Insurance Matters

Knowing basic insurance terminology can help you:

• Understand your healthcare costs
• Avoid unexpected bills
• Verify your coverage before treatment
• Make informed healthcare decisions
• Understand what your insurance plan pays for

🏥 Common Insurance Terms at a Glance

🏥 Health Insurance Plan

A health insurance plan is a contract between you and your insurance company that helps pay for covered medical services.

Your specific benefits, costs, and covered services will depend on your individual plan.

📊 Network Comparison

💳 Premium

A premium is the amount you pay to maintain your health insurance coverage.

Premiums are typically paid:

• Monthly
• Quarterly
• Annually

Paying your premium does not mean all healthcare services are free.

💵 Copay (Copayment)

A copay is a fixed amount you pay for certain healthcare services.

Examples:

• Primary Care Visit: $25 Copay
• Specialist Visit: $50 Copay
• Urgent Care Visit: $75 Copay

Copay amounts vary by insurance plan.

📊 Deductible

A deductible is the amount you must pay for covered healthcare services before your insurance begins sharing costs.

Example:

If your deductible is $2,000, you may be responsible for the first $2,000 of eligible medical expenses before insurance starts paying according to your plan benefits.

📈 Coinsurance

Coinsurance is your share of the cost of a covered service after you've met your deductible.

Example:

Your insurance plan may pay 80% and you pay 20%.

If a covered service costs $1,000:

• Insurance pays $800
• You pay $200

🛑 Out-of-Pocket Maximum

Your out-of-pocket maximum is the most you will pay for covered healthcare services during a plan year.

Once you reach this limit, your insurance typically pays 100% of covered services for the remainder of the plan year.

This may include:

• Copays
• Deductibles
• Coinsurance

Premiums generally do not count toward your out-of-pocket maximum.

📊 Understanding How Insurance Costs Work

Healthcare Service
        │
        ▼
   Deductible
(Pay First Amount)
        │
        ▼
  Coinsurance
(You Share Costs)
        │
        ▼
Out-of-Pocket Maximum
(Max You Pay Per Year)
        │
        ▼
Insurance Pays 100%
(For Covered Services)

💵 Insurance Cost Example

Medical Bill: $5,000

Step 1:
Deductible = $2,000
You Pay: $2,000

Remaining Balance = $3,000

Step 2:
Coinsurance = 20%

Insurance Pays: $2,400
You Pay: $600

Total You Paid = $2,600

🌐 In-Network Provider

An in-network provider has a contract with your insurance company to provide services at negotiated rates.

Benefits of using in-network providers may include:

• Lower out-of-pocket costs
• Reduced coinsurance
• Lower deductibles
• Simplified claims processing

🚫 Out-of-Network Provider

An out-of-network provider does not have a contract with your insurance company.

Receiving care out-of-network may result in:

• Higher costs
• Reduced insurance coverage
• Larger patient responsibility

Always verify network participation with your insurance company before receiving non-emergency services.

📝 Prior Authorization

Prior authorization is approval required by some insurance companies before certain services can be performed.

Common examples include:

• Advanced imaging (MRI, CT scans)
• Surgical procedures
• Specialty medications
• Certain specialty services

Approval requirements vary by insurance plan.

🔍 Explanation of Benefits (EOB)

An Explanation of Benefits (EOB) is a statement from your insurance company explaining:

• Services received
• Amount billed
• Amount paid by insurance
• Patient responsibility

Important

An EOB is not a bill.

It is a summary of how your insurance processed a claim.

📄 Claim

A claim is a request for payment submitted to your insurance company after healthcare services are provided.

Claims may be submitted by:

• Healthcare providers
• Hospitals
• Laboratories
• Imaging centers

🎯 How a Medical Bill Is Processed

Visit Occurs
      ↓
Provider Submits Claim
      ↓
Insurance Reviews Claim
      ↓
Explanation of Benefits (EOB) Issued
      ↓
Insurance Pays Covered Portion
      ↓
Patient Receives Remaining Balance (if any)

👨‍⚕️ Primary Care Provider (PCP)

A Primary Care Provider (PCP) is the healthcare professional who helps manage your overall health and coordinates your care.

Examples include:

• Family Medicine Physicians
• Internal Medicine Physicians
• Nurse Practitioners
• Physician Assistants

Some insurance plans require you to select a PCP.

🩺 Specialist

A specialist is a healthcare provider with advanced training in a specific area of medicine.

Examples include:

• Cardiologists
• Orthopedic Surgeons
• Neurologists
• Gastroenterologists

Some insurance plans require referrals before seeing a specialist.

🏥 Facility Fee

A facility fee is a charge associated with operating a hospital or hospital-based facility.

Facility fees help support:

• Nursing staff
• Medical equipment
• Emergency preparedness
• Laboratory services
• Imaging services
• Hospital operations

Facility fees are separate from provider charges.

❓ Frequently Asked Questions

Why do I have a bill if I have insurance?

Most insurance plans require patients to share costs through deductibles, copays, or coinsurance.

What if I don't understand my bill?

Our Billing Department can help explain charges, insurance payments, and patient responsibility amounts.

How do I know if a service requires prior authorization?

Contact your insurance company or our team before receiving non-emergency services.

What if my insurance changes?

Please notify us as soon as possible and bring your updated insurance card to your next appointment.

📞 Need Help?

Billing Department

📞 (737) 241-9033

✉️ billing@familyhospitalsystems.com

🎫 Submit a Billing Support Ticket

Customer Support & Care Coordination

📞 (737) 238-0936

✉️ Support@familyhospitalsystems.com

🎫 Submit a Support Ticket