Top 5 Health Insurance Terms You Should Know

Shopping for insurance isn’t an easy feat in Tulsa, especially for individual health insurance plans. The terminology that accompanies health insurance can be very overwhelming and confusing if you’re not in the medical or insurance field.

If you really want to get the best health care plan, use a health insurance broker, like Derby Insurance Solutions in Tulsa OK. They have the experience and knowledge required for understanding your options for an individual plan. We hope you will review and understand the following 5 basic definitions of individual health insurance.

1 – Premium

This is a very common word in health insurance terminology. The premium amount is your payment to the insurance company on a monthly or quarterly basis in order to keep your coverage in place. This is typically the very first cost you will see when researching different insurance plans and one you have to consider. However, while the premium may look like a reasonable amount, don’t forget to take in account other factors and amounts; deductible, coinsurance, out-of-pocket maximums, and copayments. All of which are described more below.

2 – Copayment

The copayment, often called ‘co-pay’ is the flat amount owed to your health insurance provider for a service covered under your plan. Let’s look at an example. Say you are required to pay a copayment of $30 each time you visit your primary care doctor. You also have to pay $10 for each generic prescription prescribed and filled. The copayment will vary by each plan available and the type of coverage you chose. A helpful tip: If you visit the doctor frequently you should look for a plan with an affordable co-pay.

3 – Deductible

The deductible amount is another important factor to keep in mind when reviewing different insurance plans. This amount must be paid before your insurance company starts paying for the services used. Deductibles will vary as well based on the insurers. As an example; the deductible of one plan might be for all services used while another plan could have different deductibles for each service covered. Deductibles often have a significant impact on the overall premium amount. Lower deductible plans will often provide more significant coverage but the premium costs will be higher. A helpful tip: Try to keep the deductible at an amount no greater than 5% of your annual gross income.

4 – Coinsurance

This is actually a percentage of the charges you’re allowed for services covered under your plan that you are required to pay. An example: The health insurance provider may take care of 70% of hospitalization costs, leaving you with only 30% to pay. The coinsurance is the 30%. The coinsurance is what you typically pay once you’re deductible has been met. This cost can also affect the premium price of the insurance plan. If you see a plan with a low coinsurance, the premium costs are likely to be higher.

5 – Out-of-Pocket Costs

When reviewing health insurance plans you’ll be seeing an amount for out-of-pocket costs. This number is the maximum you will be required to pay over the course of a year or however long the benefit period is. This amount does not include your balance-billed charges, your premium, or services used that aren’t covered under your plan. This amount will also vary depending on the plan but sometimes includes the deductible, coinsurance, and copayments. When you reach the maximum of out-of-pocket expenses, your insurance provider will then start paying 100% of the amount allowed under your covered services.


If you are looking for health insurance or have more health insurance questions. Contact Derby Insurance Solutions today, and one of our friendly insurance agents will help you with your health insurance needs.