Every American carries one and almost nobody understands it: the insurance card. Here’s the vocabulary, in the order you’ll actually encounter it.
Premium — the monthly subscription. Paid whether you use care or not. The cover charge.
Deductible — what you pay each year before insurance starts helping. A $2,000 deductible means the first $2,000 of care is yours.
Copay — the flat fee per visit. $30 for your PCP, $60 for a specialist. Due at the front desk.
Coinsurance — the percentage split after the deductible. 80/20 means the plan pays 80%, you pay 20%.
Out-of-pocket max — the worst-case cap. Once your spending hits this number for the year, the plan pays 100% of covered care. The number that prevents medical bankruptcy — for covered services.
Network — the list of providers your plan has deals with. In-network means discounted rates; out-of-network means you pay much more, sometimes everything.
Formulary — the plan’s list of covered drugs, in tiers. Tier 1: cheap generics, a few dollars. Tier 4: specialty drugs that can cost thousands a month.
Prior auth — the permission slip. For many procedures, scans, and drugs, your doctor must get the plan’s approval before you receive care. Denied or delayed here, and the care doesn’t happen.
Referral — in the insurance sense: some plans won’t let you see a specialist unless your PCP sends you first. The gatekeeper rule.
EOB (Explanation of Benefits) — not a bill. The receipt the plan sends after care: what was billed, the discount they negotiated, what they paid, what you owe. Read it before you pay anything.
HSA / FSA — tax-advantaged accounts for medical spending. The HSA (health savings account) rolls over year to year and is yours forever. The FSA (flexible spending account) is mostly use-it-or-lose-it.
Put it together and a year of healthcare has a shape: you pay the premium every month, the deductible first, then copays and coinsurance share the load, and the out-of-pocket max is the ceiling. Everything else is details.
Previously: the money trail. Next: the life of a medical bill.