Typically, a deductible is the amount of money you pay each year before your health insurance plan starts to pay for covered medical expenses. For example, with a $100,000 heart surgery bill, you would be responsible for paying the first $1,000. After this $1,000 deductible is met, the insurance company will pay a percentage of the bill in what is called the coinsurance.

Coinsurance is a cost-sharing requirement where you are responsible for paying a certain percentage and the insurance company will pay the remaining percentage of the covered medical expenses after your deductible is met. For a health insurance plan with 20% coinsurance, once the deductible is met, the insurance company will pay 80% of the covered expenses while you pay the remaining 20% until your out-of-pocket limit is reached for the year. Typically, the out-of-pocket limit is the maximum amount you will pay out of your own pocket for covered medical expenses in a given year. For a plan with a $2,000 out-of-pocket limit, you will pay a $1,000 deductible and $1,000 coinsurance while the insurance company covers the remaining $98,000 of the heart surgery bill. Even if you are hospitalized again in the same year, the insurance company will pay 100% of your covered expenses within the limit of the lifetime maximum.

A co-payment or co-pay is a specific flat fee you pay for each medical service, such as $30 for an office visit, after which the insurance company often pays the remainder of the covered medical charges. For example, you were not feeling well and went to see your doctor who charges $200 for the office visit and your insurance plan has an office visit co-payment of $30, then you will only be responsible for the $30 and the insurance company will cover the remaining $170.

Most health insurance plans do NOT require this. Most companies today offer plans wherein the deductible usually only applies while hospitalized or for more major procedures, such as CT scans or MRIs. Most plans today provide doctor and prescription co-pays.

This is the amount of money one would pay out of their own pocket towards their medical expenses in any given year. Out-of-pocket expense includes the co-payments, coinsurance and deductibles. The term annual out-of-pocket maximum also refers to the total amount the insured would have to pay for the whole year, excluding premiums.

A network is comprised of doctors, hospitals and other providers that have contracted and pre-negotiated their fees with an insurance company. For example, when you have gall bladder surgery, the hospital's charges are discounted through the network's pre-negotiated contract and this maximizes your out-of-pocket savings, whereas, if you did not have health insurance, your out-of-pocket liability would be the hospital's actual retail charges. Most providers participate in-network, however, occasionally there are providers that could be out-of-network, which results in higher out-of-pocket costs. Considering the potential savings, always stay in-network if at all possible.

A Primary Care Physician, or PCP, is your family doctor that you first visit for most common illnesses. A specialist is a doctor that your PCP might refer you to if your condition requires further diagnosis or treatment. For example, if you contacted your PCP complaining about chest pains, your PCP might refer you to a cardiologist who would have more advanced equipment and training to help you.

What is a pre-existing condition?

A pre-existing condition is a health condition that you have prior to a policy's effective date.

It will depend upon the condition, its severity, treatment and the cost of medications. Some pre-existing conditions will not exclude you from obtaining coverage, however, the insurance carrier may issue a policy to you with a waiver clause on that particular condition, which in many cases can be removed after a certain period of time.

There are guaranteed issue health plans available that will cover most pre-existing conditions, however, they do not provide the same level of benefits as a major medical policy.

Health insurance companies will not provide individual coverage if you are currently pregnant. Your local welfare office may be able to provide assistance depending on your income level. You may also contact local obstetricians to arrange a monthly payment plan.

A Preferred Provider Organization is a network of physicians and hospitals who have contracted with insurance companies to accept reduced fees for their services. As a result, your out-of-pocket expense will be lower. Another characteristic of PPOs is the ability to make self-referrals. PPO plan members can refer themselves to doctors of their choice, including specialists, as long as those providers are in the PPO network. You can see providers that are NOT in-network, however, your out-of-pocket cost will be higher. If you have a PPO plan, it is best to seek care from network providers to keep your expenses to a minimum.

A health maintenance organization (HMO) is a type of Managed Care Organization that provides a form of health insurance coverage that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. Unlike PPO health insurance, care provided in an HMO generally follows a set of care guidelines provided through the HMO's network of providers. When you choose to become insured under an HMO plan, you must choose a doctor in-network referred to as a Primary Care Physician or PCP. You will initially seek services from a PCP for any health issue and they will refer you to a specialist if needed.

Most HMOs require you to select a specific doctor as your primary care physician or PCP who will refer you to a network specialist if necessary. Although HMOs require you to initially seek services from a PCP, exceptions are typically made for emergencies. A major benefit of an HMO is that maternity is generally a covered expense.

PPO plans provide more flexibility to choose doctors and hospitals. These plans don't require you to have a referral to see a specialist, and you can see doctors outside the network, however, you'll pay a larger share of the cost of your care. Maternity benefits are not offered on many PPO plans.

HSAs (Health Savings Accounts) combine an IRS-recognized qualifying high-deductible health insurance policy with a Health Savings Account. The HSA, similar to an IRA, can be opened at a bank or financial institution. You can fund up to 100% of your deductible amount into an HSA account annually. Funding is not required, however, any contributions to the account can be used to pay for current and future medical expenses on a tax free basis. All funds set aside in your HSA grow tax-deferred until age 65, when funds can be withdrawn for non-medical purposes (ordinary tax applies), or tax-free when used for medical expenses.

Plans that are available through your place of employment, if offered. Usually there is a waiting period of 30, 60 or 90 days before your coverage becomes effective. Group plans cover your pre-existing conditions as soon as you become eligible. By law, an employer is required to pay at least 50% of your monthly premium. Although not required, some employers pay 100% of the employee's premium and may, at their discretion, pay a portion of your dependents' premium.

Guaranteed Issue Health Insurance has no restrictions on pre-existing conditions. These products will cover individuals  who do not quality for a standard major medical policy.

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers with 20 or more employees to offer employees the opportunity to temporarily continue their group health care coverage under their employer's plan if their coverage ends due to termination, layoff or other changes in employment status (referred to as "qualifying events"). The qualifying event requirement is satisfied if the event is the death of a covered employee; the termination (other than by reason of the employee's gross misconduct), a reduction of hours of a covered employee's employment; the divorce or legal separation of a covered employee from the employee's spouse; a covered employee becoming entitled to Medicare benefits under Title XVIII of the Social Security Act; or a dependent child ceasing to be a dependent child of the covered employee under the generally applicable requirements of the plan and a loss of coverage occurs.

HIPAA stands for the Health Insurance Portability and Accountability Act, which is a law mandating that anyone belonging to a group health insurance plan must be allowed to purchase health insurance within an interval of time beginning when the previous coverage is lost. The law protects employees, especially those with long term health conditions who may be reluctant to leave jobs due to pre-existing condition clauses which will limit coverage under a new insurance plan and from losing health insurance due a change in employment status.