Frequently Used Health Insurance Terms

Authorization: a group of services that require approval from your health insurance coverage prior to the service being rendered. This authorization does not guarantee payment and does not promise to cover the cost of the service.

Coinsurance: your share of the cost for a covered health service, usually calculated as a percentage (like 20%) of the allowed amount for the service.

Coordination of Benefits (COB): the situation in which a patient may have more than one insurance or health coverage for services. Coordination of Benefits is the arrangement that determines which payer will pay first and the percentage each payer will pay.

Copayment: a predetermined amount you pay for a covered medical service that should be paid at the time the service is received. This amount is determined by your health insurance and the type of coverage you have and can vary based on the type of service. For example: a copayment of $25 is due when you see you primary care doctor. A higher copayment may be due if you are referred to a specialist such as a dermatologist, cardiologist or other specialist.

Deductible: an amount you owe for covered health care services before your health insurance begins to pay. Generally, a deductible amount starts at the beginning of a calendar year or at enrollment into an insurance plan.

Explanation of Benefits (EOB): a statement that looks similar to a medical bill sent by a health insurance company or other payer that provides detail of a medical insurance claim and explains what portion is paid to the provider

Network: doctors, hospitals and other service providers that have contracted with a health plan to provide medical services to the members of the plan.

  1. In-network means that the provider participates or contracts with that plan and accepts the payment terms of the health plan
  2. Out of network means the provider does not participate or contracts with the plan and you may have more out of pocket expenses.

Premium: an amount that is paid for health insurance or medical coverage. This may be paid entirely by you, or paid by an employer, either partially or totally. This amount can be paid monthly, quarterly or yearly.