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Understanding Insurance

As this year winds down and we prepare for 2021, we wanted to provide some updates and education regarding insurance plans. We find that it is important to be familiar with your insurance coverage, and how a new year may impact your plan, especially regarding telehealth coverage in the new year.

As you may know, many insurance plans will renew at the beginning of 2021. We encourage you to reach out to your insurance company to make sure telehealth will be covered under your plan once it renews and to make changes to your plan as needed.


Understanding your insurance plan can be daunting and confusing at times, so we wanted to provide a list of the most common terms that are helpful to understand below, as well as resources to reference when you are looking at your insurance plan.

  1. Cost Sharing- this is a general term that refers to the cost for services covered by a plan or health insurance that you must pay out of your own pocket (sometimes called "out-of-pocket costs"). Copayments, deductibles, and coinsurance are all examples of cost sharing.

  2. Deductible- the amount you owe for health care services that is covered by your health insurance or plan before your health insurance begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services.

  3. Copayment- a fixed amount that you pay for a covered health care service, usually at the time of the service. This is also called a copay.

  4. Premium- the amount that must be paid for your health insurance or plan. This may be payed by you and/or your employer on a monthly, quarterly or yearly basis.

  5. Coinsurance- your share of the costs of a covered health care service, calculated as a percentage of the allowed amount for the service. For example, if the health insurance or plan's allowed amount for an office visit is $100 and you've met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the amount.

  6. Effective Date- the date your insurance plan starts covering you.

  7. Out of Pocket Limit- the highest amount you could pay during a coverage period (usually 1 year) for your share of the costs of covered services. After you meet this limit, the plan will usually pay 100% of the allowed amount.

  8. Claim- a request for a benefit that is sent to your health insurer. This request is made by you or your health care provider for items or services you think are covered. A claim includes reimbursement of a health care expense.

Resources

For comprehensive glossaries of health coverage and medical terms with examples of real-life situations, check out the following links:

Mental Health America also has resources and education about how insurance works and how to go about paying for mental health care:

Lastly, NAMI breaks down the different types of health insurance options and describes who is eligible for each option and what mental health benefits each one typically covers:

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