Many of the terms you encounter when dealing with health insurance are not familiar. While these terms can be confusing, the better you understand them, the better you will be prepared to successfully gain coverage and access to the treatments that are right for you. “Speaking the language” also helps avoid misunderstandings and minimize extra steps or back-and-forth with your insurance company. Here you will find some key insurance terms and definitions. Understanding the meanings of these concepts will help equip you to better address any barriers and make smart decisions that will benefit you and your family.
When I had to change plans, I felt like I was reading Greek! Once you get past the slick brochures, the terms that describe what health insurance actually does and doesn’t cover, for me, were almost impossible to read! I had never heard of many of those terms before. Taking the time to understand what they are trying to say makes it easier to communicate, though, and ultimately saves my time by avoiding confusion between me, my doctor and my insurance company.”—T1D patient, NY
When insurance companies contract with a doctor, hospital, pharmacy or medical equipment supplier to include them in the plan’s network, they agree to specific amounts that will be paid for items or services rendered by those providers. This contracted rate, usually called the “allowed amount” or “allowed charges,” can be significantly lower than what the providers would charge if you did not have the insurance company negotiating these discounts on your behalf. You will usually see a note of what the allowed amount/allowed charge is on the explanation of benefits you receive from your insurance company, and it typically comes after the amount that the provider bills (which is their non-negotiated rate).
Providers set charges for the various medications, items and services they provide, in the same way that a retailer sets prices on items sold in its store. This amount is the provider’s “billed amount” or “billed charge” and represents what you would pay if you had no insurance. When you have insurance, the insurer will negotiate a discount from the provider’s billed amount/charge, which can protect you from what you would otherwise have to pay. On the explanation of benefits you receive from your insurance company, you will see the provider’s billed amount/charge, usually followed by the allowed amount/charge that the insurer (and you) actually pay.
A claim is a request for payment that you or your doctor submit to your health insurance company when you receive care or services. The insurance company reviews the claim for its validity and then pays you or your doctor. If you submit the claim, you are usually reimbursed, while if your doctor does so, they are paid.
GST taxpayers can't claim any pending input tax credit if this return is not filed by November 30, 2024 for FY 2023-24
