Let’s face it; we all know that health insurance lingo can be complex and difficult to interpret at times. Especially, if it’s international/expatriate insurance and the terminology isn’t what most people are typically used to. International insurance agents / brokers selling insurance inside the US are required to be licensed in order to even sell various insurance products. So how does the regular insurance consumer know what benefits they are getting when it comes to expatriate insurance terminology?
The following is a brief overview of common expatriate insurance terminology and definitions that are found in expatriate health insurance:
Premium: This is the actual amount of money charged by insurance companies to be insured. An insurance premium can be collected in several ways; monthly, quarterly, semi-annual and of course, pay in full. If the insured (the person to be covered) fails to make a scheduled payment, the insurance company can choose to cancel policy.
Deductible: a deductible is a specified dollar amount that you would pay to a doctor or hospital before the insurance pays for claims. A deductible can offset the cost of your premium (what you pay for the plan itself). The higher you set the deductible, then the lower your premium cost will be. However, in most cases, you will need to pay the deductible before the insurance will pay any benefits (claims).
* Please note: in the UK and some parts of Europe this is also known as an “excess”.
Coinsurance: Coinsurance is a percentage of the medical bill that you pay. Many plans offset the cost of the premium with coinsurance. By sharing a portion of the medical expenses, it reduces the premium rate because you’re paying more out-of pocket. For example, if a plan has 80/20 coinsurance the insurance will pay 80% of the medical expenses and you would pay the remaining 20%.
PPO or Provider Network: PPO stands for Preferred Provider Organization or Network. A PPO is an organization of medical doctors, hospitals, facilities and other health care providers who have a contractual agreement with an insurer to provide health care at reduced rates to the insurer’s or administrator’s clients. You are strongly encouraged to visit medical provider and facilities that are part of the insurance plan network. This usually allows for direct billing and can remove the need for you to pay up front for medical expenses.
Underwriting: International major medical plans are medically underwritten. This means that your family’s medical status and history will be used to determine your eligibility for coverage. When you apply for a major medical plan you will have to answer a series of health history and lifestyle questions. Based on your responses to these questions, the insurer can decide the following things:
- Issue coverage and complete your application
- Request further information regarding your past medical history
- Request that a rider be placed on your application that limits or excludes certain medical conditions
- Request a premium increase due to your medical and/or family history
- Deny coverage
You are notified if the terms will be different than what you applied for – to ensure that you still want to proceed with the policy under new terms or conditions. If you are not happy with anything you can withdraw the application with no penalty.
Usual Reasonable & Customary (URC): Usual Reasonable and Customary is a term that insurers use to describe a limitation on their responsibility to pay for eligible medical expenses. Basically, URC refers to the fee typically charged by a provider for a specific procedure in a specific geographic location. If a particular procedure typically costs $5,000 in the New York City area, and most providers customarily charge about $5,000 for that procedure, the insurance company will not pay your provider in New York City $10,000 for the same exact procedure. Instead, they will limit their payment amount to “Usual Reasonable and Customary” – in this example, $5,000.
Emergency Medical Evacuation: This benefit will provides transportation (emergency air and/or ground) to the nearest hospital that is qualified to provide medically necessary treatment when treatment is not available locally.
Repatriation: In the event of a covered injury or illness resulting in your death, this benefit provides the following benefit: air and/or ground transportation of bodily remains or ashes to the area of your residence, and usually includes reasonable costs of preparation of your remains necessary for transportation.
This is just a few of the most common definitions and benefits that come with most expatriate insurance plans. When choosing a plan that right for you, it’s always a smart idea to pay close attention to the policy benefits and exclusions – making sure that you choose a plan that’s right for you and your health needs.
If expatriate insurance terminology becomes too daunting and you’d like assistance in choosing the right plan for you, please contact one of our licensed expatriate insurance agents. They will be happy to help!