The language of financial services can be a complex one for unfamiliar consumers. As a blend of concepts — often peppered with legal jargon and regulatory caveats — the verbiage can easily confuse the public. David Morrison, owner and advisor for Medicare Education Services, Pottstown, has taken the time to define a few.
He begins with some common healthcare topics.
A copay is a fixed dollar amount that a patient pays for medical care.
For example: Kiesha goes to a doctor and must present a $25 copay for the visit. Or she picks up a prescription and charges her $15 responsibility for the medication on her credit card. The payment is made at the time of service, by the insured.
Copays often hinge on a deductible.
A deductible is a simple concept: It’s the amount paid before an insurance company starts covering expenses.
Consider: Hector is admitted to a hospital Dec. 1, using a plan with a $500 deductible. He must pay that sum (assuming it’s his first medical encounter of the year) before his health insurance kicks in for the remainder of the cost of his stay.
Deductibles generally reset Jan. 1 of every year. So if Hector needs surgery and is scheduled for it New Year’s Day, he will be contributing to his $500 again, less than 30 days after his prior outlay. The second contribution, despite being close to the first, is for the following 12-month period.
Coinsurance is a percentage paid for medical care after a deductible has been met. Many plans establish an 80/20 split of these fees, with the company covering 80 percent and the insured coming up with the remaining 20 percent.
A premium is the monthly cost paid to an insurance provider for coverage.
Medicare can affect these four financial aspects of healthcare insurance. Medicare Education Services’ David Morrison can therefore consult with seniors needing clarity on the issue. As well, questions can be submitted online or to Morrison himself at 484.424.5222.
More on healthcare insurance terms is at Medicare Education Services.