Like hospitals, health insurance has many terms. Some terms talk about how much you pay, some about how much they pay, some about whether or not anybody needs to pay, but there are so many that it can feel brutally overwhelming. That’s why we made this quick guide to help you!

So without further ado, here are the most common health insurance terms.

• Allowed Amount: The maximum amount your plan will pay for your bill. Also called eligible expense, negotiated rate, or payment allowance.

• Appeal: Your request to review a decision made by the insurer.

• Balance Billing: When the provider bills you for the difference between the charge and the allowed amount.

• Co-Insurance: Your percent share of the costs of the allowed amount of a covered health care service.

• Co-Payment: The fixed amount paid for a covered health care service.

• Deductible: The amount you owe for health care service before your plan covers any of it.

• Excluded Services: Health care services your plan doesn’t ever pay for.

• Grievance: A complaint to the insurer.

• In-Network Co-Insurance: Your co-insurance for in-network providers.

• In-Network Co-Payment: Your co-payment for in-network providers.

• Medically Necessary: Health care needed to treat a patient.

• Network: The facilities, providers, and suppliers your health insurer/plan contracts with.

• Non-Preferred Provider: A provider who doesn’t contract with your insurer; some plans have “tiered” networks.

• Out-of-Network Co-Insurance: Your co-insurance for out-of-network providers.

• Out-of-Network Co-Payment: Your co-payment for out-of-network providers.

• Out-of-Pocket Limit: The maximum you can pay during a policy period (typically a year) before the plan pays 100% of the negotiated rate. Does not include premium, balance-billed charges, or non-covered health insurance.

• Preauthorization: A decision by your plan that a health care service is medically necessary.

• Preferred Provider: A provider who contracts with your insurer to provide services at a discount to you.

• Premium: The amount that must be paid for your health insurance/plan. Paid monthly, quarterly, or yearly.

• Prescription Drug Coverage: Health insurance/plan that pays for drugs and medication.

• Provider: A physician or health care professional or health care facility who is accredited.

• UCR (Usual, Customary, and Reasonable): The amount paid in your geographic area for a medical service based on the standard charge. UCR is sometimes used to determine the allowed amounts.

We hope this article answered all your questions about insurance terms! At Fairdoc, we are here to inform you, assist you, and answer all your questions. If you have any inquiries for us, feel free to reach out, and stay tuned for future articles!