Individual health insurance plans can be difficult and confusing. Many unemployed, self-employed individuals and those who work for employers that do not provide health insurance spend hours trying to understand insurance language to find good coverage and the low premium. Not all insurance plans are the same. The first step in exploring the many different types of individual health insurance plans is to learn all about the basic insurance terminology and common features associated with individual health care plans.

Deductible:

The deductible is a fixed dollar amount that an individual must pay out of pocket before the insurance company will begin to cover the costs of any health care services. If a plan has a deductible of $250, then the insured must pay $250 out of pocket, after $250 has been reached, the insurance company will begin to assume responsibility for health care costs, based on co-insurance selected.

Co-Insurance:

Co-insurance is a technique that health insurance providers use to split the cost of your health care services. The insurance company pays for part of the cost and the individual pays the remaining balance that is due. Some standard percentage rates for co-insurance include 80/20 and 90/10 plans. On a 80/20 plan, the insurance company pays for 80% of costs incurred, while the individual is responsible for the remaining 20%. Most major health insurance companies will limit the amount of money that an individual is responsible for paying out of pocket on a yearly basis. This is called “out of pocket maximum, typically limited to $2,000 – $3,000 per year. Once out of pocket maximum is reached, the insurance company will pay 100% of any charges sustained afterward.

Co-Pay:

Co-pay is an amount that an individual will pay for health care services. Different services are assigned different dollar amounts of co-pays. Standard co-pay for a visit to a family doctor might be from $20-$30 per visit, depending on the amount selected during purchase of a plan Premiums: Health insurance plan with a high percentage participation rate such as 80/20 has a lower monthly premium, while plans with lower percentages 90/10 or 100/0 will feature higher monthly premiums. Higher co-pay rates for different health care services have lower monthly premium. Higher deductible has lower monthly premium.