Balance Billing:

Balance billing is the fee for a particular service that exceeds what the insurance plan recognizes as the allowable charge for that service. The additional payment, or the “balance,” is then the individual’s responsibility.

For example: a plan’s coinsurance policy says it covers 60% of a medical visit and the patient must cover 40%.  For a $100 bill, an individual would assume that they would be responsible for $40, and the insurance company would cover the other $60.  But the allowable charge is only $50.  So, in reality, of a $100 charge, the plan covers 60% of up to $50, leaving the individual responsible for 40% of $50 and the entire balance of $50.  So rather than paying $40 for the visit, as expected, the individual is responsible for $70.

Coinsurance:

The cost-share percentage an individual must pay for an out-of-network service.  For example, many plans have a 70%/30% coinsurance rate, which means the plan will cover 70% of the out-of-network service (but see “balance billing”), and the individual will pay 30%.

Copayment/Copay:

A set dollar amount that an insured individual pays for an in-network medical service.  This is often $15 or $20, but sometimes up to $50 per visit.

Deductible:

An amount the insured must pay before the insurance plan will begin to make any payments, including for in-network or out-of-network services.  Note that the deductible amount is often separate, and a different amount, for in-network and out-of-network services.  For example, there is a $2,000 deductible for in-network services, and $5,000 deductible for out-of-network, and so a $100 payment for an out-of-network service will only count towards the out-of-network deductible, and $0 will be counted towards the in-network deductible. 

Explanation of Benefits (“EOB”):

A statement sent from the health plan to an insured individual listing services that were billed by a health care provider, the allowed amount for each service, the total amount paid by the plan, and the total amount of individual responsibility for the claim.

In-Network:

A group of physicians, hospitals, and other health care providers that a health plan has contracted with to deliver medical services to its members.  Usually, when seeing an in-network provider, the individual is only responsible for a copay. 

Out-of-Network (“OON”):

Physicians, hospitals, and other health care providers that are not contracted with the plan to provide health care services.  Depending on your plan, services provided by an out-of-network provider may not be covered at all or may be only partially covered (see “coinsurance”). 

Out-of-Pocket Maximum (“OOP Max” or “MOOP”):

The highest dollar amount an individual will have to pay for covered services in a given plan year.  After the OOP Max is met, the plan pays 100% of the costs of covered benefits until the end of the plan year.  Note, however, the limitation to covered services, which means that the expenses that count towards the OOP Max are deductibles, copayments, and coinsurance payments, but not those for not covered services, for example, balance billing amounts or where there is no out-of-network provider coverage for your plan.

Premium:

Monthly payment amount for insurance plan.  This is often covered partially by an employer, but may be paid in full by an individual.  Note that your monthly premium does not count towards one’s deductible or OOP Max. 

Provider Directory:

A directory of all the in-network providers for your insurance plan. For those providers listed on the directory, an individual’s responsibility is (or should be) only a copay. Providers not listed on a plan’s provider directory will (usually) be considered out-of-network.