The specifics of how we buy health insurance for ourselves, our family, and our business has changed over the past few years. Many people have a hard time navigating all the different terms that are associated with health insurance reform. Obamacare, ACA, what does it all mean?
We’ve put together a brief guide to some of today’s most prominent, need-to-know pieces of health insurance lingo, in the hopes of making the sign-up experience that much less confusing for you.
Affordable Care Act (ACA). This is the official name for the comprehensive healthcare reform law enacted in March 2010. The law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010 and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act” is used to refer to the final, amended version of the law.
Agent. This is what we are here at Axess Advisors. An agent or broker is a person or business who can help you apply for help paying for coverage and enroll you in a Qualified Health Plan (QHP) through the Marketplace. They can make specific recommendations about which plan you should enroll in. They’re also licensed and regulated by states and typically get payments, or commissions, from health insurers for enrolling a consumer into an issuer’s plans. Some agents and brokers may only be able to sell plans from specific health insurers.
Benefits. The healthcare items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan’s coverage documents. In Medicaid or CHIP, covered benefits and excluded services are defined in state program rules.
Claim. A request for payment that you or your healthcare provider submits to your health insurer when you get items or services you think are covered.
Coinsurance. Your share of the costs of a covered healthcare service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You pay coinsurance after you’ve met your deductible. For example, if the health insurance plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your 20% coinsurance payment would be $20. The health insurance plan pays the rest.
Copayment. A fixed amount (for example, $15) you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered health care service.
Deductible. The amount you owe for covered healthcare services before your health insurance plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve paid $1,000 for covered services. Some plans pay for certain healthcare services before you’ve met your deductible.
Donut Hole, Medicare Prescription Drug. Not as delicious as it sounds: most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a “donut hole”). This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
Health Maintenance Organization (HMO). A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
Medicaid. A health insurance program for low-income families and children, pregnant women, the elderly, and people with disabilities. Some states have expanded their Medicaid programs to cover all adults below certain income levels. The federal government provides part of the funding for Medicaid and sets guidelines for the program, and states administer the program. Medicaid benefits vary somewhat between states and may have a different name in your state.
Medicare. A Federal health insurance program for people who are age 65 or older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Network. The facilities, providers, and suppliers your health insurer or plan has contracted with to provide health care services.
Obamacare. An informal name sometimes used to refer to the health coverage plans available through the Health Insurance Marketplace. Obamacare often also refers to the Affordable Care Act.
Preferred Provider Organization (PPO). A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
Premium. The amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly or yearly.
We hope this list has been able to answer some of your basic questions about the Affordable Care Act. If you have any questions about how to enroll or how Axess Advisors can help make enrollment easier, contact us here. If the term you’re looking for wasn’t in our list, check this more exhaustive list on the government website.