By Anabelle Fernández

Health insurance is a contract between you and your insurance company. With the plan that you buy the company agrees to pay part of your medical expenses with sickness or injuries. Even when you need care that costs more than what you pay in premiums and deductibles, the insurance will cover it.

Below are four terms, referring to the disbursements that all insured clients should know and understand when acquiring a medical plan.

1. The insured must pay a premium when acquiring a health policy. This premium can be paid annually, semi-annually, quarterly or monthly. It will depend on 2 fundamental aspects: the age of the person and the amount of the deductible chosen.
2. Unless the policy specifies otherwise, when the insured incurs medical expenses, it is necessary that the insured first covers the amount of his deductible before the insurance coverage becomes effective. There are 2 ways to pay the deductible, per policy year or medical event or annual deductible which means that all medical expenses incurred during the policy year will be subject to a single deductible. For example, suppose that your policy year is from the June 1st of this year to May 31 of the following year and that you contracted a deductible of $ 1,000 (one thousand dollars) with the policy. In July of this year, you must go to the emergency room and the total cost of the service is $1250. You pay your deductible which is $1,000 and the balance, which is $250, is covered by the insurer. There is another expenditure again in December that costs $500. The insurer is obligated to pay that $500 because you had already covered your $ 1,000 deductible in the previous event.
3. You may have to pay a coinsurance or co-payment, which is part of the cost of the medical service that the insured pays out of pocket, after paying the deductible. Co-insurance is usually a percentage, for example 20% of the total cost. The copayment, on the other hand, is a fixed amount instance you may have to pay $10 or $20 for a prescription drug or a doctor's visit.
4. The policy contract stipulates the maximum amount that an insurer has to pay in case of using the policy. This is known as "Stop Loss". This concept is generally applied to the co-insurance amount, as follows: “The insured will pay 20% of the medical expense, for co-insurance up to a maximum of $ 2,000 (ie)”. This means that if your account is $50,000 in coinsurance you would pay $ 10,000 but since your contract says that the maximum is of $2,000 that is all you will owe. If the policy does not specify a "Stop Loss", the insured must understand this well, because in a hospitalization he could be paying a lot of money out of pocket.

There are many types of health insurance policies, which can offer very different benefits. What your health insurance policy usually includes is related to its price. Policies with the lowest premiums may not cover many services and treatments.

You may see products that resemble health insurance, but they do not offer you the same protection as full coverage policies. Some examples are contracts that only cover certain diseases. There are those that only provide for hospitalization expenses or policies that simply cover injuries suffered in an accident. Some plans offer discounts for health services (prepaid medicine). Do not confuse products similar to medical insurance with a real medical expenses policy.  Complete health insurance usually covers most health problems.

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