Important Health Insurance Terms & What They Mean: Part 2

Your health insurance policy comes with a heap of jargon that needs to be fully understood, for your own benefit. Here is a glossary of 15 terms that can help you when going through your policy document.

1. Inpatient Care: Inpatient care refers to treatment received by the policyholder at a healthcare facility for more than 24 hours/with an overnight stay.
2. Outpatient Care: Outpatient care refers to healthcare treatment that does not require an overnight hospital stay or a hospital admission. It is important to note that some insurance plans do not cover outpatient treatment costs.
3. Ancillary Services: These include services provided by the healthcare facility other than the treatment. Biometric tests, physical therapy, and physician consultations are some such services. Policies have certain limits on the kind of refunds offered towards ancillary services.
4. Applied to Deductible (ATD): The amount paid by the policyholder for healthcare services to the hospital/healthcare provider and goes towards the payment of the annual deductible.
5. Capitation: Capitation is a fixed payment that a patient makes to a health insurance company or healthcare provider if they have availed various healthcare services to recoup costs incurred.
6. Pre-authorisation: Certain health insurance policies require that their policyholders avail their permission prior to planned hospitalisations. Coverage may be denied if a policyholder has not received authorisation.
7. Pre-Certification: A process similar to preauthorization whereby patients must check with insurance companies to see if a desired healthcare treatment or service is deemed medically necessary (and thus covered) by the company.
8. Pre-existing Condition (PEC): A pre-existing condition refers to a medical condition that the policyholder had and was aware of before taking up the policy. In the case of treatments for such conditions, the insurance company may levy a waiting period before coverage. A PEC may also make an individual ineligible for certain types of policies as well.
9. Waiting Period: The waiting period is a fixed period of time a policyholder might have to wait before availing certain benefits from the policy. come in effect.
10. Self-Pay: When a policyholder goes for treatment to a healthcare provider not within the network of the insurance company, then they will be expected to pay from their own pocket or self-pay. They can then apply for a reimbursement from the insurance company.
11. Cumulative Bonus: If a policyholder does not make any claims during a year, the sum insured for the same policyholder will be increased by a certain small percentage during the next year, without an increase in the monthly premiums paid.
12. Supplemental Insurance: A supplemental insurance is a secondary insurance policy that can help cover for deductibles and copays incurred by the policyholder from the first/primary health insurance policy.
13. Non-Covered Charge (NC): Before you sign up for an insurance policy or file for a claim, you need to know that there are certain treatments and health services that will not be covered by your policy. These are known as non-covered charges. A cosmetic surgery is an example of an NC.
14. Usual Customary and Reasonable (UCR): For each type of treatment, there is a UCR or a stipulated amount determined by the insurance company. If the healthcare provider charges more than the UCR for a certain treatment, the policyholder will be expected to pay the difference.
15. Patient Responsibility: Payments for anything beyond the Usual Customary and Reasonable (UCR) or Non-Covered Charge (NC) and will not be covered by the insurance company inevitably becomes the patient’s responsibility. This could also refer to the policyholder’s share in a  co-pay or co-insurance policy.

For more terms related to health insurance, read Important Health Insurance Terms & What They Mean: Part 1.