GLOSSARY OF HEALTH INSURANCE TERMS

Co-Insurance: This is a percentage of the amount the insurance company will pay after you reach your deductible. For example, after you reach your deductible, you could choose to pay 20% of the next $10,000 in bills (i.e. $2000) and the insurance company pays 80% (i.e. $8000). It's like a second deductible thats helps to spread out your medical bills. After you reach the deductible and co-insurance, the company pays 100%.

Co-Pay: This is an amount you are willing to pay for office visits and Rx. Most people choose a $10 to $40 co-pay on office visits. Co-pays are different for Rx depending on whether it is a generic or brand drug. Co-pays usually raise the price of your premium.

Deductible: You choose a dollar amount of which you are willing to pay first before any benefits are paid by the Insurance Company. Deductibles range from $0 to $5000 per individual, and are usually doubled for a family of 2 or more. The higher the deductible you choose, the lower the premium.

Health Savings Plans: The IRS has come out with a policy that if you purchase a One Deductible Plan with a high deductible, you can qualify to open a health savings account (HSA) where you can deposit pre-tax dollars....its like a medical IRA. The premiums for these types of plans can save you up to 50% from traditional plans. The money that you save can then be deposited into an HSA. Whatever you deposit into the HSA is deducted from your gross income. You then pay your deductibles and other medical bills, including Rx, vision, dental, etc. with these pre-tax dollars. This is a form of self-insurance and it is really a smart way to pay for your medical bills.

HMO (Health Management Organization): With an HMO policy, you MUST go to a primary physician before you can get treatment for any condition. The network is small and restricted to HMO doctors only. The discounts on services are not as good as PPOM.

One Deductible Plan: These are plans where you choose a higher deductible (over $1500), and after you reach that chosen deductible, the insurance pays 100%. Most plans also include office visits, preventative and Rx in the benefit. (See also Health Savings Plans).

PPOM Network (Preferred Provider Organization of the Midwest): The largest network of doctors in Michigan and available in most other states as well. If you own a PPOM policy, then you are elegible for discounted rates from these doctors. You can go to any doctor in this network. All of the health policies that we sell are PPOM.( See Health Management Organizations)

Traditional Health Plans: Those that have a lower deductible (under $1500) and include Rx and office visit co-pays. They are usually higher priced premiums compared to a One Deductible Plan