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Common health insurance terms explanation

OSHCstudents – When you purchase health insurance, you may come across some terms such as copay, coinsurance, or deductible. What do these terms mean? Common health insurance terms can be confusing. But learning the definitions can help you to better understand your plan and use it to your benefit.

What is coinsurance?

Your share of your care

For some services, you share the cost with your health plan. Instead of a flat fee like a copay, the percentage of the total cost of your care that you pay is called coinsurance.

A good coinsurance percentage depends on how much coverage you need each year – if you frequently visit the doctor, a plan with a high monthly premium that will likely have lower coinsurance may be right for you; if you rarely visit the doctor, a plan with a low monthly premium but higher coinsurance may work for you.

Many people have a plan that has an 80/20 coinsurance policy, meaning your health insurance provider pays 80% of your medical expenses, and you cover the other 20%, but coverage varies by provider. Say the cost of X-raying, diagnosing and putting a cast on a broken wrist adds up to $1,200. If your plan calls for you to cover 20%, you can expect a bill for $240. Your plan takes care of the rest.

What is copayment (copay)?

Flat fee for a standard service

The flat fee you pay when you use specific services – like having a doctor take a look at your wrist – is called a copayment, or copay for short. You’ll usually pay the set amount, say $40, at the clinic when you get care. Your copay for different types of care likely appears on your insurance card. Compare these costs when you’re deciding whether to call your doctor’s office for an appointment, swing by an urgent care or convenience clinic on your way home from work or head straight to the emergency room.

Deductible definition

What you pay before your plan pays

The amount you have to pay yourself, each year, before your plan will pitch in for your care is called a deductible. For example, if this amount is $500 a year, your plan won’t pay for any of your care until you’ve paid $500 out of your own pocket for things like doctor visits and X-rays (monthly costs, or premiums, don’t count). Let’s say you’ve already paid $300 this year for doctor visits, a few tests and a prescription or two. If you have to seek any more care this year, you’ll pay the first $200 of your costs to hit that $500 amount, and your health plan will help you pay for the remainder of your costs.

Embedded deductible meaning

What you pay for a single family member’s care before your plan pays

If you’re on a family plan, you may have two different amounts you have to pay before your plan starts to help: one for individual family members and one for your whole family’s care combined. The amount for an individual family member is called an embedded deductible, and it can help you save money if one family member has higher medical costs. Once you’ve paid that amount for that family member’s care, your plan will help pay for their care for the rest of the year – even if your family combined hasn’t paid enough yet for the plan to start helping.

Health insurance premium definition

How much you pay each month

The amount you pay for your health plan each month, whether you use any care or not, is called a premium, and your premium is the same amount each month. You might pay your monthly cost yourself; your employer might pay it for you, or you might share the cost. Plans with lower monthly costs usually come with higher costs for care. Plans with higher monthly costs have lower costs for care.

Out-of-pocket maximum

The most you’ll pay for your care

The absolute most you’ll pay for your care for the year is called the out-of-pocket maximum. Once you’ve paid enough to hit your plan’s out-of-pocket maximum, your plan will pay 100% of any other covered care you have for the rest of the year. So, if you faced some big health challenges earlier in the year and your broken wrist is just the icing on the cake, you won’t pay a penny if you’ve already hit this ceiling.

OSHCstudents (source: HealthPartners)

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Baek Ah Yeon

I trust Allianz Care since it is one of the largest insurance companies in Australia, with the medical centres where I only have to pay for what is left from insurance support. (no need to claim later). Besides, those centres are located at the centre of the city, close to schools. Very convenient, right? Credits to Allianz Care for providing reliable medical centres for health check and treatments.

Baek Ah Yeon | University of Queensland

Ariella Pei

I’ve been living with homestay family for 2 years. I’m now 19, I can move out but I don’t want to leave my host, who has become my family. It feels like I’ve met my second family. Thanks OSHCstudents for sending me to this homestay!

Ariella Pei | University of Canberra

Chatchawat Paton

I realised how important insurance was when I started living in Australia. There I switched to using Allianz Care instead of the previous service. Allianz Care is extraordinarily good in its consulting service and customer care. I’ve learned a lot about Australian health care, also I was consulted with mental issues and how to live a healthy lifestyle. I am very happy now.

Chatchawat Paton | Torrent University

Phuong Anh

Having lived in Australia for 2 years, I’ve been reliant on AHM OSHC to pay for my health care, which supports me for other expenses. Last year, I sent my claim requests for several times and always received the claims within two days. Everything is easy, fast and simple.

Phuong Anh | Victoria University

Xiaoyu Cheng

Thanks to Allianz Care, every time I claimed my medical receipts it processed much more quickly and easily than I expected. I was initially a bit concerned since Allianz Care is more expensive than other insurance companies, but now I can ensure that it is totally worth the money.

Xiaoyu Cheng | Monash University

Emma

My homestay was very comfortable and convenient. My host was really kind. He showed me where to shop, which buses to catch, where the nearest train station is, to get off at which station so that I wouldn’t be taken to another suburb. Travelling was easy since the place was close to public transports. It only took 30 minutes to get to my college, actually I could go anywhere easily!

Emma | Macquarie University

Jing Zhang

When told that I was going to live with an Italian family, I was pretty nervous and doubted whether or not they could speak English well as the local people? Yet it was no longer a problem when I saw them. They knew the problems of people who first came to Australia and always tried to help me. I learned so many things about both Australian and Italian culture and enjoyed tasty Italian meals every time. Awesome!

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