Healthcare 101

Health Insurance can feel a little overwhelming, especially with all the industry jargon. Of course, our AAA Minneapolis independent insurance agents can help decode some of these terms, but the five common terms below are an important first step in deciding what questions to bring to your agent.

Premium

Your premium is the amount you pay each month to keep your health insurance active. Even if you don’t use your health insurance that month, you’ll still need to pay your premium to remain covered and pay for the services you may need later in the year.  

Deductible

Your deductible is the amount of money you must pay out-of-pocket before your insurance kicks in. Lower deductible plans may have higher premiums, and vice versa.  

For example, if your deductible is $1,000 and you have a surgery that costs $1,500, you’ll pay the first $1,000 and your health insurance will typically pay the remaining balance.  

Co-Pay

A copay is a flat fee that you pay for certain services, like a doctor visit or filing a prescription. The amount will vary depending on the service, and whether the provider is in or out of your network. Usually, it’s listed clearly on the back of your insurance card, though some services may be laid out more clearly on the insurance company’s website.  

Co-Insurance

Coinsurance is a percentage of the cost of medical services after your deductible has been met. For example, if your coinsurance is 20% and the service costs $1,000, you’d pay $200, and your insurance would cover the remaining $800.  

Out-Of-Pocket-Maximum

This is the most you’ll have to pay for covered healthcare expenses throughout the year. Once you’ve hit this limit, your insurance plan will pay 100% of the remaining covered costs for the year.

Essentially, each healthcare plan differs through a combination of each of these costs. Understanding these terms can help you choose the plan that works best for the combination of your healthcare and financial needs.

At AAA Minneapolis, we’re happy to walk you through your options and find a plan that works best to suit your needs. Feel free to set up an appointment to explore what plans are available in your area.