Health literacy is the ability to find, understand and use health information to make smart decisions about your well-being. Navigating the healthcare system can feel overwhelming, especially with all the technical jargon and complex steps involved.
Whether managing your own health or helping a loved one, understanding health information is crucial. Improving these skills can lead to better health and prevent worsening conditions.
One critical area of health literacy is understanding health insurance. Health insurance helps cover medical costs, but to use it effectively, you need to know key terms.
Key health insurance terms you should know
• Premium: A premium is the monthly amount you pay to keep your insurance active, even if you do not use it. If you do not pay your premium, your policy could be canceled.
• Network: A network is a group of doctors, hospitals, and other healthcare providers that have agreements with your insurance company. When you use in-network providers, your costs are lower because the insurance company has pre-negotiated rates. Using out-of-network providers usually costs more because they do not have these agreements.
• Deductible: Your deductible is the amount you need to pay out-of-pocket for medical care before your insurance starts to pay its share. For example, if your deductible is $500, you must pay that amount before insurance kicks in for most services.
• Copay: A copay is a fixed amount you pay for specific healthcare services. For instance, you might pay $20 for a doctor’s visit or a prescription while your insurance covers the rest.
• Coinsurance: This is the percentage of the healthcare cost you pay after meeting your deductible. For example, if your coinsurance is 20% and you get a $200 bill, you pay $40, and your insurance covers the rest.
• Out-of-pocket maximum: An out-of-pocket maximum is the most you will pay in a year for covered services. Once you reach this limit, your insurance will cover 100% of your costs for the rest of the year. This protects you from very high medical bills. Keep in mind that there are separate limits for in-network and out-of-network services.
• Balanced billing: This happens when an out-of-network provider charges you the difference between their fee and what your insurance covers. To avoid this, try to use in-network providers whenever possible.
Why health literacy matters
Understanding these terms can help you make informed decisions about your healthcare, choose the right doctors and treatments, and avoid surprise bills.
For instance, knowing the difference between in-network and out-of-network providers can save you hundreds or even thousands of dollars. If you qualify for programs like Medicare, Medicaid, or Tricare, understanding your benefits is equally important. These programs can offer significant cost savings, but they also have their own rules and terms.
How to improve your health literacy
Improving your health literacy does not have to be complicated. Start by asking questions during doctor visits and reviewing your insurance materials carefully. Many insurance companies offer online resources or customer service representatives who can explain your benefits in plain language.
By taking the time to understand your health insurance, you can reduce stress, save money, and ensure you get the care you need. Good health starts with good information — and the confidence to use it.
In conclusion, health literacy is a vital skill, especially when it comes to navigating health insurance. By learning key terms and understanding how your insurance works, you can take control of your health and make the best decisions for yourself and your loved ones.
For information about services and programs available to you through Carson City Health and Human Services, visit gethealthycarsoncity.org, or call 775-887-2190. You can visit the CCHHS office at 900 E. Long St., in Carson City or follow CCHHS on Facebook at facebook.com/cchhs, or Instagram @GetHealthCarsonCity.