Understanding your health insurance options or the features of a health insurance plan you are already part of is important for being able to take advantage of all of the medical services available to you.
Unfortunately, much of the terminology used to talk about health insurance and its many associated issues is specific and sometimes outright confusing. As a result, it can be helpful to review the most commonly found terms in health insurance discussions. Read on to discover the meanings behind the most commonly used terms in health care.
Terms Concerning Basic Health Care Regulations
- Health Insurance Provider: A health insurance provider is the company that offers health insurance. Popular national health insurance providers include Humana, Blue Cross Blue Shield, Aetna, UnitedHealthcare and many more. These are not to be confused with health care providers like doctors, nurses and specialists.
- Health Care Network: In most cases, when a network is mentioned, it is referring to the doctors and facilities that the health insurance plan has established relationships for affordable services. You may also come across terms like “in-network providers,” meaning those medical professionals who have established working relationships with the health insurance plan provider and out-of-network providers who have no established relationships.
- Plan Beneficiary: The health care plan’s beneficiary is the person who is applying for insurance and who will be receiving medical care under the plan. If you are part of a Family Health Insurance Plan (see below), there will be multiple beneficiaries to your health insurance plan.
- Affordable Care Act (ACA): The Affordable Care Act (ACA), also commonly referred to as Obamacare, is the most recent set of federal regulations that created many of the most important guidelines for health insurance plan minimums. You will often see terms that are associated with ACA regulations in terms of plan benefits and affordability standards.
- Minimum Value: According to ACA guidelines, a health care plan meets minimum value requirements if it covers at least 60 percent of an enrollee’s total cost for care and provides access to adequate health care providers.
- State Health Insurance Marketplace: The state health insurance marketplace is where your state of residence provides you with information on available health insurance plans in your area. Some states have their own online marketplaces while others depend on the federal insurance marketplace. The Marketplace will help you figure out which insurance plans you are eligible for, regardless of how it is structured.
- Penalty: ACA regulations dictate that individuals who do not buy health insurance without meeting one of the exemptions will be fined a penalty. This rule is called the individual mandate. This penalty is 2.5 percent of the individual’s income or $695 in 2017, whichever is higher. The individual mandate has been repealed, so it will no longer apply after 2018.
Common Terms Used to Describe Insurance Costs
- Premium: This is the amount you regularly pay for participation in the health insurance program, usually on a monthly basis.
- Out-of-Pocket Costs: These are the costs you pay in addition to your monthly premium, such as deductibles, copayments and co-insurance fees.
- Deductible: This is the amount you must pay before your health insurance coverage will start contributing to your medical costs, although deductibles do not apply to every procedure. Deductible amounts can vary drastically from plan to plan.
- Copayment: This is a fixed amount that you must pay before receiving a specific medical service. Copayments are usually separate from deductibles. For example, your plan could ask you to make a $15 copayment for every doctor visit that will continue even if you meet your deductible maximum because copayments do not usually count toward deductible limits.
- Co-Insurance: This is the percentage of medical costs that you are required to pay after you have met your deductible limit. A plan at the Platinum Level (see below), for example, covers 90 percent of total medical fees starting from the time that the enrollee has paid the total deductible amount.
- Cost-Sharing Reductions (CSR): Cost sharing reductions (CSR) are essentially out-of-pocket savings opportunities for eligible health care applicants. In most cases, CSR benefits are possible beginning from the Silver Level (see below) and above.
Common Terms Used to Describe Health Insurance Policy Elements
- Open Enrollment Period: The open enrollment period is the time of year, typically from December into the end of January of the next year, when you can choose a new health insurance plan. Most people who fail to submit an application for health insurance during this period will have to pay the penalty and wait until the next open enrollment period to receive health insurance.
- Pre-Existing Condition: Pre-existing conditions are illness or other medical problems that you are aware of during the time you are applying for a new insurance plan. In the past, health insurance providers were able to deny coverage to those with serious pre-existing conditions that would end up costing them too much money, but new ACA regulations have made it clear that pre-existing conditions can no longer be held against potential applicants.
- Preventive Care Visits: Preventive care visits are doctor visits that are not scheduled due to an illness or injury, but instead to help you maintain your health and prevent you from having health problems. ACA regulations also require adequate health care plans to provide a number of free or low-cost preventative care visits.
- Non-Preferred Providers: Non-preferred providers are also known as out-of-network health care providers, which are basically the doctors and hospitals who are not in established agreements with your health insurance provider.
- Emergency Services: Emergency services are services for unexpected accidents or illnesses that require immediate medical attention. Emergency medical services are often exempt from many of the restrictions placed on other medical services.
- Explanation of Benefits: The Explanation of Benefits (EOB) is essentially a receipt that outlines what medical services you have received and their associated costs. An EOB clearly shows how much you must pay and how much your insurance company is paying.
Common Types of Health Insurance Plans and Coverage Levels
- HMOs: Health Maintenance Organizations are a type of health insurance plans that provide enrollees with a set provider network and centralized care through a primary care physician who recommends specialists as needed.
- PPOs: Preferred Provider Organizations are health insurance plans that offer participants the option for partially covered out-of-network care in addition to completely covered in-network care and does not require a recommendation to see all specialists.
- EPOs: Exclusive Provider Organizations are very similar to PPOs except that they offer no coverage for out-of-network medical care.
- POS Plans: Point-of-service plans provide a great deal of freedom to enrollees to choose their own doctors and medical facilities but require a recommendation from a primary care doctor to see specialists.
- HDHPs: High-Deductible Health Plans also offer enrollees a great deal of choice when it comes to their provider network but ask for higher deductibles with the expectation that they will not face any serious medial issues in the nearby future.
- HSAs: Health Savings Accounts are optional parts of HDHP insurance. HSAs provide a tax-free savings account to individuals who have chosen to buy an HDHP insurance plan.
- FFS Plans: Fee-for-service plans are less common today but have been grandfathered in at some companies. FFS plans allow enrollees to pay a set amount for medical services, regardless of which provider they visit.
- Family Health Insurance Plans: Family health insurance plans offer the primary beneficiary the option to add eligible family members onto their health care plan at an additional cost.
- Employer reimbursement plan: Some employers may offer their employees an employer reimbursement insurance plan, in which they allow employees to purchase a health insurance plan on the state marketplace to be reimbursed by the employer later on.
- COBRA: COBRA refers to the Consolidated Omnibus Budget Reconciliation Act that allows for employer-related insurance coverage to be carried over for a specific period of time for former employees who just left the company.
- Catastrophic Health Insurance Plans: Basic health insurance plan option for adults younger than 30 and in good health
- Platinum Coverage: Healthcare plans that cover 90 percent of total medical costs
- Gold Coverage: Healthcare plans that cover 80 percent of total medical costs
- Silver Coverage: Healthcare plans that cover 70 percent of total medical costs
- Bronze Coverage: Healthcare plans that cover 60 percent of total medical costs