08/01/2025
Yup, the healthcare industry in America is totally fine and not intentionally confusing at all... just kidding 🫠
If you feel mixed up by this jargon, know that you are not alone! Here is a brief description of commonly used insurance terms:
• Deductible: The amount paid out of pocket by the policy holder before an insurance provider will pay any expenses.
• Out-of-pocket maximum: The limit on the amount of money you have to pay for covered health care services in a plan year. (ex. once you pay this amount OOP, you will not be directly charged for services).
• Co-pay: The patient's share of the cost for goods or services rendered, with the other share paid by the patient's insurance company. Usually a pre-set amount listed on your card or portal.
• Co-insurance: A portion of the medical cost you pay after your deductible has been met.
• Prior Authorization: A process where a health insurance company requires approval from a healthcare provider before covering a specific medical service or medication.
• Referrals: A formal request from one healthcare provider to another, usually a specialist, to evaluate or treat a patient. Some insurances require referrals (HMOs) to be submitted through them. Certain offices will require a script with your diagnosis information, even if your insurance does not require referrals.
• PPO/HMO/EPO:
- HMO (Health Maintenance Organization), requires using in-network providers. Requires referrals from your P*P to see specialists. Generally, no coverage for out-of-network care (except emergencies).
- PPO (Preferred Provider Organization), has a network of preferred providers.
Does not require selecting a P*P & does not require referrals to see specialists.
Offers coverage for out-of-network care, but at a higher cost.
- EPO (Exclusive Provider Organization), requires using in-network providers.
Does not require selecting a P*P. Does not require referrals to see specialists within the network. Generally, no coverage for out-of-network care (except emergencies).
Still need clarification? Call your insurance company or check out their online portal -- there is usually ample educational information available!
