What is coverage?
In health insurance, coverage is a state where a health insurance company or public health insurance program has agreed to assume financial risk for healthcare services provided to a health plan member. The terms of coverage are defined by a contract under a specific health insurance plan.
Coverage is the promise of financial payment for healthcare services as a result of sickness or injury. Financial payment is usually made to the appropriate healthcare providers. In certain cases, payment is made to the health plan member for reimbursement of out-of-pocket expenses.
- The health plan member is financially 'covered' for a portion of the costs of healthcare services
- The health insurance company 'covers' the health plan member
- The health plan defined what services are 'covered' and to what extent financially