Health Insurance Basics and Policy Provisions
Cost-sharing vocabulary
A deductible is what the insured pays before benefits begin. Coinsurance is the percentage split after the deductible (e.g., 80/20). A copay is a flat dollar amount per service, common in managed care. The out-of-pocket maximum caps the insured's exposure for the year. Traps: copays often do not count toward the deductible, and coinsurance applies to the allowed charge, not the billed charge.
Managed care vs. indemnity
Indemnity plans reimburse after the fact with no network. HMO - closed panel, PCP gatekeeper, referrals required, no non-emergency out-of-network care. PPO - network discounts, no referrals, higher cost outside the network. POS - hybrid; out-of-network allowed with a referral. EPO - network only, no referrals.
The renewability ladder
Noncancelable: the insurer can neither cancel nor raise premium. Guaranteed renewable: cannot cancel, but can raise premium by class. Conditionally renewable: renewal only under stated conditions. Optionally renewable: the insurer chooses. Always ask who holds the renewal power.
Time-based limits
Probationary period - waiting time before coverage applies. Elimination period - the disability-income waiting period before benefits start. Benefit period - maximum duration of payment. Preexisting condition look-back and exclusion periods apply in some products; ACA-compliant major medical bans preexisting-condition exclusions. Coordination of benefits prevents double payment - the primary plan pays first.
Other products
Disability income (own-occupation vs. any-occupation, residual disability, key-person, business overhead), long-term care (elimination period in days, benefit period in years, inflation rider), Medicare Supplement (standardized plans A–N), and Part D drug coverage.
Rule of thumb: read the question's time words. Days signals an elimination or probationary period; years signals a benefit period or a look-back.