Defining Unusual Health Insurance Words – “Network,” “Waiting Period,” and “Exclusion”


The Insurance Barn

Below is one of our posts from earlier in the year.  My hope is that you are able to use the information to help you better understand your health insurance policy.

Do insurance policies read like legal contracts to you?  If so, there’s a reason.   They are contracts.  Many people can get confused when reading a health insurance policy.  Part of the problem is that insurance companies use words that most people do not use in normal conversation.

I grew up thinking that there were “absolutes” in this world.  Yes meant yes and no meant no in my childhood.  Today, things have changed.  Everything is relative.  “No” no longer means “it is not possible.”  “No” means, “do it advised but you can do it at your own risk.”

For the last couple of years I have been advising readers of this blog that a health insurance policy is a legal contract.  It uses words with absolute definitions.  There is very little room for interpretation.  If you violate the terms of your contract, the insurance company will not pay your medical costs.

Excuses like, “I did not know better” or “This facility was more convenient” fall on deaf ears.  Insurance policies are absolute.  You must know what you can and cannot do if you are going to use them.

In order for you to understand your policy, you must understand the words that are in the policy.

Most policies have a “Definitions” section early in the policy.  Ideally, this section will define the words that are in the policy that the average American does not use frequently.  The definitions in that section take precedence over anything that you might read on the internet.  It is part of your contract.  If you do not understand something in your policy, check the Definitions section of your policy before you Google a term.

The definitions and descriptions in this and future posts are general in nature.  Use them only as a guide of what to look for when you are trying to learn how to use your health insurance.

NETWORK

A network is a group of medical providers who have contracted with an insurance company.  They have agreed to limit their charges and fees for patients who are insured through the same insurance company.  Most insurance companies will pay more generously if the insured uses a medical provider who has agreed to limit their charges and fees.

If you elect to use a medical provider who is not in your insurance company’s network, be prepared to pay all or at least a greater amount of their bills.

WAITING PERIOD

A waiting period is a segment of time in which the insurance company will not pay any bills.   They are typically used by insurance companies to avoid people waiting until they have a problem and then applying for health insurance after they are already showing symptoms.

For example, a common waiting period involves pregnancy.  Some policies with maternity coverage will not pay full benefits if the pregnancy is diagnosed within the first year of the policy.  That is to prevent people from doing without health insurance until they are ready to start a family and then sticking the insurance company with a $ 12,000 bill while they pay only $ 2000 in premiums.

EXCLUSION

An exclusion is anything that could cause a medical bill for which the insurance company states up front they will not pay.  One that is very common that is often over-looked is an exclusion against “cosmetic” treatment.

Unless a licensed physician is able to prove that a medical procedure is required for health reasons, many health insurance companies state in the Exclusion section of their policies that they will not pay for any of the associated medical bills.

In most policies, the exclusions make perfect sense.  Occasionally, you might find one that does not.  It is your responsibility to read your policy and act before there is a problem if there is an exclusion with which you do not agree.

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