Common Insurance Terms & Scenarios

Insurance Card

What it means: An insurance card is a small card (paper or digital) that shows proof you have insurance. It has important information doctors need to bill your insurance.

Scenario: When Sam visits a new doctor off campus, the receptionist asks for his insurance card. Sam shows the card on his phone, so the clinic knows which insurance company to contact for payment.

Premiums

What it means: A premium is the money you pay to have insurance, even if you do not see a doctor. Think of it like a membership fee.

Scenario: Emmanuel is a college student and pays $1,300 each semester for the student health insurance plan. Even in semesters when Emmanuel feels healthy and never goes to the doctor, he still pays the premium to keep the insurance active.

Co-Pay

What it means: A co pay is a set amount of money you pay each time you get certain services, like seeing a doctor or picking up medicine. That money goes toward the total paid for that visit.

Scenario: Alex goes to the campus health clinic for a sore throat. The insurance plan says the co pay for a doctor visit is $20. Alex pays $20 at the front desk, and insurance helps pay the rest. If Alex’s total out-of-pocket expense for his visit was $60, he would only owe $40 due to paying his $20 copay at check-in.

Deductible

What it means: A deductible is the amount of money you must pay first each year before your insurance starts helping pay most medical bills.

Scenario: Maria’s deductible is $400. Earlier in the year, Maria paid $300 for lab tests and $100 for an X ray. After paying a total of $400, Maria has met the deductible. Now insurance will start paying a bigger share of her costs.

Co-Insurance

What it means: Coinsurance is when you and your insurance share the cost of care after you meet your deductible. It is usually shown as a percentage.

Scenario: After meeting his deductible, Jordan needs physical therapy that costs $100. His plan has 20% coinsurance. Jordan pays $20, and insurance pays $80.

Out-of-Pocket Maximum

What it means: The out of pocket maximum is the most money you have to pay in one year for covered medical care. After you reach this amount, insurance pays 100% of covered costs.

Scenario: Lina has a serious illness and needs many doctor visits. Over the year, she pays premiums, co pays, and coinsurance. Once she reaches her $7,500 out of pocket maximum, she does not have to pay anything more for covered services that year.

Referral

What it means: A referral is permission from your main doctor to see a specialist, like a skin doctor or heart doctor. Some insurance plans require this.

Scenario: Aisha visits her primary care doctor for knee pain. The doctor says she needs to see an orthopedic specialist and gives her a referral. Without the referral, Aisha’s insurance might not help pay for the specialist visit.