When you walk into a government office or a school or a hospital, you could feel a bit lost if you are not used to the terminologies that are used. Sometimes you hear a couple of abbreviations being used that are not too familiar to you. Of course, all of us know a few basic short-forms that are commonly used; but this might not be sufficient when you have to deal with issues like insurance or something equally important. It is for this reason that familiarity with terminologies is recommended. Read on to find out about three of the most commonly used terms that you would hear when you are trying to choose from the various Medicare Supplement Plans 2021 that are in the market today.

Getting To Know More About Deductibles

As the word indicates, deductible refers to something that is being deducted; in insurance parlance too, there is no difference. When you say that your deductible is high, it means that you are paying a high amount that is being deducted from your account at a regular interval. This could be either monthly or quarterly and, in some cases, annually too. Therefore, you could define a deductible as an amount which is a fixed payment that you make towards medical or healthcare services and/or prescriptions before your coinsurance starts. Now, you need to understand what coinsurance and copayments mean to get the entire picture.

The Other Two Important Terms

Copayments and copays are the same; when you talk about a copay, it refers to a fixed amount or a set rate that you pay for a prescription or for a doctor visit or for any other kind of medical care. The point is that this amount is fixed and does not change when the kind of service changes. Coinsurance is the other term you need to know about. This refers to a certain percentage of the cost of the medical care, that you have to pay over and above the deductible. Here again, this percentage is fixed and agreed upon when you sign up for the insurance plan.

Once you are clear about these three terms you would know what an insurance agent is talking about when he or she starts spewing out terms like cold water. Without this, you could be paying unnecessarily for a service or overpaying for a healthcare benefit that would otherwise cost much less. Getting more information always helps with wise decision making.