Health insurance can be very confusing. It’s even more confusing if you’re a real estate agent. Here are some basic terms that everyone should know when shopping for real estate health insurance.
The following information comes from HealthCare.Gov:
A deductible is an amount that you pay for covered healthcare services before your insurance plan starts to pay. The site adds that after you pay your deductible, you usually pay only a copay or coinsurance for covered services. As you peruse different insurance options, the goal is to avoid a high deductible.
A copay is the fixed amount you pay for a covered healthcare service after you've paid your deductible. For example, let’s say your real estate health insurance plan’s allowable cost for a doctor’s office visit is $150. Your copay for a doctor's visit is $25. If you haven’t met your deductible, you’ll pay $150. If you have met your deductible, you’ll pay $25, typically at the time of the visit.
Coinsurance is the percentage of costs of a covered healthcare service that you’ll pay after you've met your deductible. As an example, let's say your health insurance plan's allowed amount for an office visit is $100 and your coinsurance is 20%. If you've paid your deductible, then you pay 20% of $100 or $20 for the covered service.
An out-of-pocket maximum is the most you can be asked to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs for covered benefits.
A premium is the price you pay for your health insurance coverage every month. In addition to your premium, you usually have to pay other costs for your health care, including your deductible, copayments, and coinsurance. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit.
PPO stands for Preferred Provider Organization. As you may guess from the name, this is a type of health plan that contracts with specific medical providers to create a network of participating providers. While you will pay less if you use providers that belong to your plan's network, PPOs may provide some coverage for out-of-network providers as well.
Having a better understanding of the real estate health insurance landscape will help you feel comfortable when you make a choice. Whether you enroll in Medicare, an insurance plan exclusively for NAR members, or choose an association health plan, it's vital to be aware of the options you have. You can read more about the options you have here (Link to the other health insurance blog).