Understanding Common Health Insurance Terms & Jargons

Getting a health insurance plan is mandated by law in the United Arab Emirates like Abu Dhabi and Dubai. However, it can prove to be a challenging task to pick out the best coverage in the market if one does not understand the complex insurance jargon. Health insurance terms like deductible and premium can be confusing for someone who is buying an insurance plan for the first time.

It can be extremely difficult to fully understand health insurance but it certainly helps if one knows the commonly used terms of the insurance world. This is where this guide of the top insurance jargon will come in handy for insurance buyers in the UAE. It will prove to be helpful in knowing what these terms actually mean before you pick another plan or decide to compare plans to find one that best meets your requirements.

Here are the commonly used medical insurance buzzwords that often leave policy buyers perplexed:

Deductibles: 

Deductibles are one of the commonly used health insurance terms and it makes up that amount that is to be paid by the insured. It has to be paid by the policyholder before their insurance provider starts sharing the cost of the covered benefits. Let us understand this with an example, for instance, if one has an annual deductible of AED 500, they have to pay this amount before their medical insurance policy starts paying out. Another notable thing to remember about this insurance jargon is that the monthly premiums do not make up for the amount of the deductible. Regardless, your health insurance plan usually covers the cost of preventive visits to the doctor even before one has cleared their deductible amount in full.

Co-insurance: 

Another one of the medical insurance terms is co-insurance which is the percentage of medical bills one has to pay once the deductibles have been fully paid. Suffice it to say that the policyholders are not completely off the hook per year after they have met their deductible amount when it is the matter of medical costs. There is some share of the coinsurance that needs to be paid for your medical expenses. For instance, if your policy suggests that your coinsurance share is 20 % and you have already met your deductibles, then you have to pay 20 % in your subsequent medical bill whereas the insurance provider will cover the rest of the 80 %.

Co-payment:

The co-payment, also known as co-pay is the amount that the policyholder owes every time they avail a medical service. This is one of those medical insurance terms that is a flat fee to be paid by the insured at the time of receiving a treatment or service. The co-pay amount varies depending upon the type of service availed. Here is an example to elucidate better- if a policy holder’s co-pay amount is AED 100 per doctor’s visit then they will have to pay AED 100 each time they visit the doctor. This however has no impact on the amount of deductibles and co-insurance, you still have to pay them. However, it depends on your specific plan and some health insurance plans do not even include co-pay.

Out of pocket maximum:

Simply put, the maximum amount that an insured has to pay out of their pocket for the services covered per year is referred to as the out-of-pocket maximum. This is one of those health insurance terms that define the amount paid annually for costs including the co-pay, the deductible as well as the co-insurance, after this, the health insurance policy takes care of the complete cost of covered benefits. Once the maximum is paid by you, the insurance provider pays for the rest of your medical care. Please remember, however, that this insurance jargon does not include premiums and neither are all the extra services like acupuncture or hearing aids availed by the policyholder. Also, if your health insurance policy distinguishes between the out-of-network and the in-network providers, then the out-of-network providers may not be included in the out-of-pocket maximum as well.

In-network and out-of-network:

This is another one of those complicated insurance jargons that leaves one scratching their heads. Every time you buy a medical insurance plan, your insurance provider will supply you with a network list. This list comprises of the clinics and hospitals that have partnered with your insurer and are approved by the insurance provider. The doctors and healthcare providers mentioned in this list are referred to as in-network providers which means that they accept your insurance policy and that your charges will be covered as per the plan’s coverage. All those hospitals and clinics that are not mentioned in this network list are known as out-of-network. Visiting these out-of-network providers will cost you out of your pocket for the medical services and treatments and you will have to file a reimbursement claim instead.

Pre-existing conditions:

Another one of the complex medical insurance terms that often feature on the details of a health insurance plan is a pre-existing condition. This term refers to any prior health condition or a personal illness that existed before buying and signing of the medical insurance policy and that the insured was aware of. Usually, health insurance companies refrain from offering coverage for any pre-existing conditions of the policyholders until a significant period of time has elapsed or in most cases, the insurance companies refuse to provide any coverage to the applicant at all.

Exclusions:

Another one of the health insurance terms that leaves policy buyers feeling overwhelmed is exclusions. It is not however as daunting as it appears to be. To put it simply, exclusions are merely those things that are excluded or not covered by your health insurance policy. It will be wishful thinking to expect an insurance provider to cover all the medical services and treatments and therefore exclusions become a vital part of any insurance plan. These exclusions might take the form of certain treatments that are not covered n your plan or they might be a waiting period that denies you the ability to make a claim to avail of the policy benefits until a specific time period has passed. It might also be a list of healthcare clinics and hospitals that are excluded from your particular coverage.

Sum Insured:

Sum insured is the payment amount to be paid by the health insurance company in case of an unforeseen event. This is the highest amount your insurance company is responsible to pay when you file a claim. Any expenditure that exceeds the sum insured amount is borne by the insured. The premium of your medical insurance plan may roughly be based on the sum insured amount you choose to avail.

Waiting Period:

This is a time period when an insured is not allowed to file a claim. A waiting period is typically applied to maternity benefits, pre-existing medical conditions, etc. It can range from certain months to certain years. Henceforth, it is advisable to purchase a medical insurance policy at an early stage of your life.

Third-Party Administrator (TPA):

Third-Party Administrators are professional agencies that are liable for coordinating as well as managing medical insurance claims & other related services. An insured needs to contact a TPA (generally available in the hospital premises) to start the claim process. To put it into simple words, TPA is basically a link between the policyholder and a health insurance company.

Cashless Claim:

Under a cashless claim, the insurer settles either the entire claim or the part of the claim directly to the network hospital where the policyholder gets admitted for availing medical treatment. This means you (as a patient and insured) don’t have to pay the hospital bills (except a nominal amount) from your own pocket during a medical emergency.

No Claim Bonus (NCB):

Health insurance companies offer no claim bonus to the policyholder as a reward for not availing of the claim during the period of the medical insurance policy. Few insurers offer the no claim bonus during the policy tenure and some insurers offer an increase in the sum assured as a replacement for NCB. However, the insurers that have no option of an NCB provide a rebate on the health insurance renewal premium.

No claim bonus is the count of the number of years when the policyholder has not raised a claim. It can be accumulated for up to 10 years and can be availed at the end of policy tenure and the amount will be mentioned in the policy document.

To ensure that you do not lose the opportunity to receive the accumulated bonus, it is imperative to renew the medical insurance policy by the premium due date

Network Hospitals:

Network hospital means health care providers, clinics, or hospitals enlisted by the health insurance company or by a third-party Administrator together to offer medical services to the policyholder. Seeking treatment at network hospitals is advantageous, as insurers can avail cashless claim services at the billing department of the network hospital.

Top-up plans:

If you have a medical insurance policy and if you think that the cover is not sufficient according to your requirements, you can purchase a top-up plan in order to enhance the coverage amount. In case of hospitalization, if the claim amount exceeds the coverage amount of your basic medical insurance plan, you are provided with the flexibility to claim the additional amount from that top-up plan.

Add on Covers / Optional Covers:

Health insurance add-on covers are referred to as additional features or coverage that don’t come with the existing medical insurance policy but have to add separately in return for an extra premium. In simple terms, add-on covers are additional benefits that one can buy to get enhanced coverage. Optional covers play a pivotal role in offering insured superior protection against medical emergencies which may require a hefty medical cost.

Restoration Benefit:

As its name suggests, restoration benefit is an advantage wherein the medical insurance provider reinstate the original sum insured after it gets fully finished for the medical treatment in a given time period. For instance, if you have purchased a family floater plan and at the time of hospitalization you utilize the full sum insured at the starting of the policy term, this feature will automatically restore the entire sum insured amount upon the exhaustion of the sum insured.  Hence, it works as a back-up plan during a medical emergency since it reinstates the entire sum insured amount for the insured.

 Outpatient Department Treatment (OPD):

If the policyholder visits a hospital for medical treatment or diagnosis without being admitted to the hospital is referred to as Outpatient department treatment.

In-patient (IP Services):

Inpatient care means medical treatment for which the policyholder has to stay in the hospital for a continuous period of 24 hours or more for a covered event.

Pharmacy Limit:

It is the assured financial amount up to which the insured is eligible to raise a claim for the medication (as prescribed by the health care professional or doctor) in an event of illness.

Portability:

A policyholder may not have fully satisfied with the existing medical insurance policy. If he stops making renewal premium payments and purchase a new health insurance policy, the policyholder will lose all benefits mainly the time-bound exclusions. That is why insurance providers offer portability benefits that allow you to switch to another insurer in case you’re not fully satisfied with the existing medical insurance policy. For doing so, you must inform your current medical insurance provider within forty-five days before the expiry date of the existing medical policy.

Free Look Period:

After receiving the policy documents, one might not want to continue with that specific medical insurance policy. This could be if one is not fully satisfied with the insurance coverage or the terms & conditions of the policy. In such a case, insurance companies provide the option to the policyholder to cancel the medical policy within fifteen days of getting it, provided there is no claim made against the policy. Please note that the 15-day period begins from the date when the policyholder receives the policy document and not from the date of policy issuance. Also, the free look period is valid only in the initial year of policy purchase and not valid for the renewal of medical insurance policies.

Grace Period:

The specified period of time immediately following the due date of a premium during which premium payment can be made in order to renew or continue a health insurance policy without losing the continuity advantages like coverage for pre-existing health conditions and waiting periods. Nevertheless, medical insurance coverage is not provided for the period by which the payment was delayed from the payment due date. Henceforth, it is vital to renew the medical insurance policy as & when the premium is due.

Maternity Cover:

Few medical insurance plans offer coverage for the expenses which are related to maternity but might have a “waiting period” for up to 48 months. Medical plans with a lesser waiting period may be offered at a higher premium cost. Although maternity or childbirth-related expenditures are generally a part of permanent exclusions in most medical insurance plans. In insurance plans, where maternity expenses are covered, the maternity treatment will include the medical cost for a delivery (including Caesarean sections and complicated deliveries) incurred during hospitalization. In addition to this, it will cover pre & post-natal medical expenditures incurred for delivery.

The Bottom Line

Buying insurance might seem extremely confusing but all one needs to do is acquaint themselves with a few basics of the insurance world. Do your research regarding some of the insurance jargons that appear intimidating to you and soon you will be a pro in this subject. With a basic understanding of the several medical insurance terms, you will quickly find a plan that is within your budget and meets all your needs perfectly.

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