Many health insurance terms are unfamiliar to members. Some can be downright confusing. We get it. We’ve put together a short list of the most common health insurance terms and definitions. Because the more you understand these terms, the better equipped you’ll be to make smart healthcare decisions for you and your family.

Allowable Charge

The maximum dollar payable under an insurance plan for a particular service. Contracted providers have agreed to accept this amount as payment in full. Non-contracted providers may seek additional reimbursement above this amount. Please keep in mind that some insurance plans apply a deductible and/or coinsurance. In those cases, the amount members are required to pay is based on the allowable charge.

Calendar Year Maximum

The maximum dollar amount or maximum number of days, visits or sessions that a member has healthcare coverage for a specific service in one calendar year. If a member exceeds these maximums, no more benefits for that covered service will be provided during the same calendar year. For example, a member’s health insurance plan might cover 20 speech therapy visits a year. The member would have to pay 100 percent for additional visits.

Coinsurance

The percentage of an allowable charge that a member pays for a service, not including any copayments or deductibles. For example, if the member’s plan has an 80/20 coinsurance rate, Blue KC will pay 80 percent of the allowable charge for eligible expenses and the member will pay the remaining 20 percent.

Copayment

The dollar amount that a member usually pays each time that a specific covered service is performed. Typically, copayment amounts are listed on the member ID card.

Deductible

The amount of covered expenses that a member must pay in a calendar year before benefits are paid by Blue KC.

Individual Deductible
The amount of covered expenses an individual must pay before benefits are paid by Blue KC.

Family Deductible
The amount of covered expense that an entire family (subscriber and all dependents) must pay before benefits are paid by Blue KC.

Explanation of Benefits (EOB)

A statement provided to the member that lists healthcare service(s) obtained, amount(s) paid by the plan and the total amount that a member may owe to a provider.

Out-of-Pocket Maximum

Most benefit plans have an out-of-pocket maximum. If the total dollar amount that you have paid in deductibles, coinsurance, and in most cases, copayments, reach this maximum amount in a calendar year, then Blue KC will pay 100 percent of the allowed charges for covered services for the remainder of that calendar year.

Thanks for taking the time to familiarize yourself with the language that’s a part of our business. And to review your specific member benefits, log in to MyBlueKC.com.