Health Insurance Terms
In order to choose the best health insurance option, prospective beneficiaries must understand the plans they are purchasing.
Purchasing the right plan will help recipients get the most out of their health care services. However, many terms that are used in health care are confusing. Thus, it will be helpful for many residents to learn the most common terms used when referring to aspects of health insurance. Continue reading to discover the most commonly used term in health insurance and what they mean.
Health Care Regulation Terms
One of the most important terms in health is “plan beneficiary.” The beneficiary is the person who enrolled in the healthcare plan and is receiving the medical services under the plan. There can be multiple beneficiaries under family health insurance plans.
Furthermore, it is important to understand the following terms:
- Health insurance provider— This is the company that supplies the healthcare plan. Not to be confused with medical providers such as doctors and nurses.
- Health care network – A health care network comprises of the physicians and facilities that have a relationship with the health insurance provider. Medical service providers who are “in-network” have this established relationship with the health insurance company and have contracts to provide services at more affordable costs.
- State health insurance marketplace – This is the marketplace, usually found on official state websites, in which state residents can select their health insurance plan. However, in some states, residents will be required to use the federal health insurance marketplace. The marketplace also helps enrollees determine the insurance plans they qualify for.
- Affordable Care Act (ACA) – The ACA is a recently enacted set of federal regulations that establish guidelines for health insurance minimums. The purpose of this act is to make health care more affordable for citizens.
- Minimum value – This term is associated with ACA guidelines. It is a requirement that health care plans are required to meet. Plans must cover a minimum of 60 percent of a beneficiary’s total cost of care and provide access to medical professionals who can adequately provide the necessary care.
- Penalty – This term is also related to ACA guidelines. It states that residents who forego health insurance without meeting the exemption requirements will be penalized by a fine. Residents are penalized 2.5 percent of their income or $695, whichever is greater. However, this penalty was removed at the end of 2018.
Insurance Costs Terms
There are a number of terms related to costs that residents will come into contact with when dealing with health care. One of the most used terms is “premium,” which is the monthly amount that beneficiaries are required to receive their insurance.
Furthermore, many residents may be familiar with the concept of a deductible, which is the amount that policyholders must pay before their health insurance company begins contributing to costs. The following are other pertinent terms related to cost:
- Out-of-pocket costs – These are the costs that beneficiaries pay on top of their premiums. This includes deductibles, copayments and co-insurance fees.
- Co-insurance – This is the percent of cost that enrollees are required to pay after meeting their deductible. Depending on the plan type, residents can have up to 90 percent of their costs paid for after reaching their deductible limit.
- Copayment – These are fixed costs that enrollees pay for specific services. These are usually separate from deductibles.
- Cost-sharing reductions (CSR) – These are cost reductions that beneficiaries can receive for certain services if they are eligible. Typically, they are for residents with Silver level plans and above.
Health Insurance Policy Terms
A number of terms are related to aspects of health coverage policies. One term is the “open enrollment period.” This refers to a period of time, usually from December to the end of January, in which residents select their new health care plan for the year. Those who fail to enroll or purchase insurance will be subject to a penalty.
Below is other significant terminology that is used when talking about healthcare policies:
- Pre-existing condition – These are conditions or illnesses that residents were aware of during the time they applied for their insurance. Previously, applicants were denied because of their pre-existing conditions, but ACA regulation changed this.
- Explanation of benefits (EOB) – This is basically a receipt of the services that a beneficiary received and the costs associated with those services. It indicates how much the enrollee paid and how much the policy provider is responsible for.
- Preventative care visits – These are visits that enable residents to maintain their health and prevent future health complications.
- Emergency services – These are visits for unexpected illnesses or accidents that require immediate medical attention.
- Non-preferred providers – These providers are also called out-of-network providers. They do not have an established relationship with an enrollee’s health insurance provider.
An array of coverage levels are available for enrolling residents to select from. Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO) are the most well-known coverage levels when it comes to health insurance. HMOs provide beneficiaries with a set network and requires them to obtain a referral from a primary care doctor to visit a specialist.
Conversely, PPOs allow beneficiaries to visit out-of-network physicians with partial coverage and to visit specialists without a recommendation. Below are other coverage options that residents can elect:
- Exclusive Provider Organizations (EPO) – These are similar to PPOs. However, coverage is not provided for out-of-network care.
- Point-of-Sale (POS) plans – These plans give beneficiaries freedom to choose their preferred doctors and medical facilities but sometimes require a referral from a primary care doctor.
- High-Deductible Health Plan (HDHP) – These plans have high deductibles and come with the expectation that the enrollee will not experience a major medical issue in the near future. However, beneficiaries will have more freedom in choosing their medical care providers.
- Health Savings Accounts (HSA) – These are optional plans that residents can enroll in that allow enrollees to save pre-tax dollars toward health-related services.
- Consolidated Omnibus Budget Reconciliation Act (COBRA) – This permits employer-supported insurance plans to be carried over for a certain amount of time after an employee leaves the company.
- Employer reimbursement plan – These plans allow beneficiaries to be reimbursed by their employers after purchasing insurance through the health insurance marketplace.
- Family health insurance plan – These plans allow primary beneficiaries to add qualifying family members to the health plan.
- Bronze coverage – Plans that cover 60 percent of total medical charges.
- Silver coverage – Plans that cover 70 percent of total medical charges.
- Gold coverage – Plans that cover 80 percent of total medical charges.
- Platinum coverage – Plans that cover 90 percent of total medical charges.