In part 1 of the 2 part blog series, we tried to explain the meaning of 10 terms associated with health insurance to our readers. In part 2, we bring you another set of 10 terms which a student must know before buying student health insurance in the US. Those readers who haven’t read part 1 of this blog series can click here to go to part 1.
COVERED HEALTHCARE EXPENSES
11. PREFERRED ALLOWANCE – It refers to sum of money that a preferred medical provider will accept as payment for the covered medical expenses of the insured patient whenever he or she undergoes treatment.
The preferred allowances for treatment and procedures are pre-fixed between the health insurance company and the medical provider. Therefore, when an insured patient seeks treatment, the hospitals charge only that much amount in the medical bill. This is applicable only in ‘In-network’ hospitals and medical institutions.
12. USUAL AND CUSTOMARY CHARGES – When an insured person gets treated in a medical provider that is not an in-network institution (i.e. out-of-network hospital), the health insurance provider accepts to bear the usual and customary charges as per the plan terms.
The usual and customary charge is determined by the health insurance company as the normal cost of treatment after analyzing the fee charged by similar providers for that particular treatment or procedure in that area. Health insurance providers are only liable to bear that portion of the medical bill which falls under the category of usual and customary charges.
13. MEDICAL EVACUATION – The provision for medical evacuation in a health insurance plan covers transportation cost to evacuate an insured person from place of accident and to be taken to the nearest hospital. Some medical evacuation benefits also include transferring the insured person back to his home country under certain circumstances.
14. REPATRIATION OF REMAINS – This provision in health insurance plan helps in repatriation of mortal remains of an insured person back to his or her home country in case of death. This facility covers the expenses incurred in transporting the insured person’s mortal remains.
Note: It is mandatory for international students studying in US on F1 visa to have health insurance that include medical evacuation and repatriation of remains cover.
15. PRE-EXISTING CONDITIONS – The pre-existing conditions refer to disease or ailments that a person buying health insurance was already suffering from at the time of purchase of the health insurance plan. Most health insurance plans in countries like India either do not provide cover for pre-existing diseases or have a waiting period ranging from 6 months to 2 years for certain types of diseases before they are covered.
However, in the US, the Affordable Care Act mandates all ACA Compliant as well as ACA comparable plans such as Student Cover plans for international students studying in the US to cover pre-existing diseases.
16. ANNUAL MAXIMUM PER INJURY OR ILLNESS – While the sum insured per year for an insurance plan may start from $ 100,000 up to unlimited amount, certain health insurance plans (including Student Health Insurance plans), put a cap on the maximum expenditure that the plan would cover per injury.
For example, a plan may have sum insured of $500,000 but it may pay for treatment expenses only up to $100,000 per injury (for e.g. fractured leg) per year.
17. IN-PATIENT – It refers to treatment that an insured person undergoes after getting formally admitted in the hospital or such medical provider. Health insurance plans, covering costs only for In-patient treatment, do not compensate the insured person if the treatment is undertaken without getting formally admitted in the medical institution.
18. OUT-PATIENT – It refers to the treatment that an insured person undergoes treatment in a hospital or medical institution without getting admitted. The Out-patient treatment is usually undertaken when the degree of sickness or injury is minor in nature. In India ‘Out-patient’ treatment is also referred to as OPD i.e. Out-patient department.
19. LIFETIME MAXIMUM BENEFIT – The lifetime maximum benefit is a limit set by certain plans wherein an insured person does not get covered for treatment after that limit is reached even if he or she purchases that health insurance plan.
For example, if a health plan has a lifetime maximum benefit of say $1 million, a person who has availed $1 million worth of benefits due to treatment for various injuries and illnesses, in say 4 years. He or she will no longer be covered by the health insurance company after that limit is reached. However, ACA compliant and comparable plans such as Student Cover plans (SC Plus and SC Elite) do not put a cap on lifetime benefits.
20. EXCLUSIONS – These are certain treatments, injuries, illnesses or ailments that are excluded from a plan’s coverage. For example, a health plan that provides cover for facial reconstruction surgery or dental surgery in case of injury may not cover treatment for cosmetic surgery or dental procedure not associated with treatment for injury.
Let’s Wrap Up!
Health insurance terms could be quite confusing at times. Before purchasing any student health plan, students should thoroughly understand the meaning of terms and jargon association with health insurance. This will not only help a student to choose a better plan but would also help avoid an inconvenience arising out of ignorance of such terms.
Disclaimer: This blog was written based on the personal research of the writer. Readers are advised to exercise discretion and read the insurance document, its terms and conditions as well as meaning of those terms as mentioned in the documents before taking purchasing any health insurance plan. Student Cover will not be liable for any wrongful interpretation of the content of this blog.