Health Insurance Coverage
There are several ways to purchase health insurance coverage; through an insurance broker, an employer, or an online exchange (public and private). One of the most often used resources is the health insurance marketplace. The marketplace, otherwise known as an exchange offers ACA compliant and private non-ACA compliant insurance plans. Whether you are looking at ACA compliant or private ACA non-compliant coverage, an understanding of the differences between plans and available options is important before you make any decisions. One of the more perplexing obstacles when looking for coverage are the terms encountered when reviewing or talking to an agent about tentative coverage. Read on to discover some of the terms or phrases you will see when shopping for health coverage.
The Most Common And Important Terms To Know When Choosing A Health Care Plan
Although there are many plans to choose from with various types of coverage they do share in some of the following attributes:
1. Cost-sharing Plans – Costs are shared between the insured and the insurer;
typically the insured pays a deductible, copays, and a percentage of a medical
costs after the deductible is satisfied.
2. Coinsurance – Is when the insurer and insured each pay a percentage of a
medical cost. If your coinsurance is set at 80/20 then you pay 20% and your
insurance plan pays 80%. Sharing of costs stop for the insured when the out-of-
pocket reaches the maximum limit.
3. Essential Health Benefits – These are the 10 required healthcare benefits
required for all plans under the Affordable Healthcare Act. Although required,
short-term and association plans have been exempted from this ACA rule.
4. High Risk Pool– A group of people who are sicker, have pre-existing
conditions and multiple comorbidities.
5. Bronze, Silver, Gold Level Plans – Tiers of services provided by a health care plan. Tiers differ in percentage of health care costs covered by the insurer. Premiums, deductibles, and co-pays will also vary by tier.
6. Covered Service – A medical service paid for by the insurance plan which can include copays, coinsurance, deductible, and any other means which
is outlined by the insured.
7. Benefit Period – A benefit period varies by plan yet will cover a medical
condition over a specified period of time.
8. Deductible – The insured pays 100% of medical costs until the deductible is
met during the calendar year.
9. Co-payment – The co-pay is the fee you pay when you visit your primary doctor
or specialist.
10. Out-of-pocket – The maximum amount you will spend during the calendar year for medical expenses. The limit is set by the insurer and may not include the
deductible.
11. Network – A specified group of healthcare providers who deliver care to the
membership of a health care plan at a contracted rate.
12. Premium – The cost of the insurance plan.
13. Catastrophic Plan – A low cost health coverage plan with a high deductible and which is suitable for young and/or healthy people or those who cannot afford full coverage.
14. Pre-existing Conditions – A medical condition which was diagnosed and/or
treated before an application is made for insurance coverage.
15. Open Enrollment – A specified period of time on an annual basis when the general public can enroll in healthcare coverage.
16. Cost Sharing Reduction – A government subsidy which lowers the out-of-pocket expense or reduces the premium.
Making A Decision
Everyone needs healthcare coverage, however, shopping for a plan is an overwhelming task if not fully informed. The first step before looking is to make sure you have a good understanding of the needs of your family and yourself. The next step is to become familiar with what is offered in your area and to acquire a firsthand knowledge of the unfamiliar terms, plans, and options before you make a decision.
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