In our first two segments of health insurance terms explained, we highlight what you need to know to help you understand costs and enrollment eligibility. Today, we’ll close the chapter on this series by outlining those health insurance terms and conditions to help you follow through on choosing the right plan for you and your family.
1. Verifying Eligibility for Other Coverage Based on Your Employer
It’s important that you first understand that you’re looking at plan options through the most cost-effective lens. If you’re eligible for other program benefits or assistance, choosing prematurely could leave you overpaying for coverage. Make sure you explore these key health insurance terms and programs before selecting a plan.
Medicaid & CHIP
Before you select a coverage plan, make sure you don’t first qualify for programs like Medicaid or CHIP. Usually reserved for state verified residents who fall below a certain income threshold, these programs can provide coverage to individuals and families. Even if you’re working, you might be eligible to take advantage of some of the latest flexibilities within these programs.
If your employer offers Individual Coverage Health Reimbursement Arrangement (ICHRA) benefits, you’ll have an opportunity to be reimbursed for out-of-pocket expenses. In order to take advantage of these reimbursements, you will need to choose an insurance plan yourself via the Marketplace. But before you enroll, check with your employer’s designated ICHRA administrator. Some companies are reimbursing employees for monthly premiums, which could afford an opportunity to choose a more expensive plan than you originally intended.
If you have access to COBRA coverage (Consolidated Omnibus Budget Reconciliation Act,) you might want to weigh your options financially before committing. This allows employees who are facing unemployment or a reduction in hours the chance to stay on the employer’s group plan. However, you would be responsible for paying the monthly premium in full, which for some can be over $1,000. In these scenarios, individuals can typically find more affordable coverage via the ACA Marketplace, with premium tax credit subsidies that can make those monthly premiums far more affordable.
2. Coverage in Terms of Claims
Before choosing a plan, it’s imperative you understand what claims you can expect to submit during the plan year. Of course, you can’t predict every healthcare need. But those appointments you can plan for will help you budget and compare coverages before choosing a plan.
How Many Visits Do You Plan
Most ACA health insurance plans cover preventive care appointments, like physicals and routine lab work, 100%. But if you know you have an upcoming procedure or non-routine visits, it might be worth looking into a higher-tiered health insurance plan. You can’t predict every health need, but knowing you have to have a knee replaced this year will help you look at deductibles, out-of-pocket maximums, and in-network providers a little differently to be the most cost-effective for you.
How Many Prescriptions
Prescription costs can be outrageous for some individuals who rely on more expensive treatments, like insulin. Before enrolling in a health insurance plan, be sure to review the provider’s coverage for routine prescription costs. Some plans may seem affordable, but in the end, they can be costly if you’re on the hook for more of those pharmacy expenses.
Out-of-Pocket Expenses and Risk Assessment
Once you’ve calculated any anticipated claims you plan to have this year, you can then review your leftover budget. In other words, after you’ve paid your monthly premium, do you have enough of a budget left to help with copays, coinsurance, and deductibles for those unexpected doctor visits or scans? Again, it’s impossible to predict whether or not you’ll need emergency care. But do your best to project what it might cost should you have an emergency room visit for a broken arm, as an example. Some individuals are generally healthy or younger with fewer health risks, while older Americans or at-risk people may find it necessary to enroll in higher-tiered coverage plans, just in case.
3. This vs. That of the Coverage Options
Of all your potential and sometimes confusing options, you might find yourself coming down to a “this or that” decision. Here are health insurance terms to help you decide which direction will offer the most benefits to you and your family.
On Exchange vs. Off Exchange
You are free to choose a health insurance provider wherever you can find one. This means exploring your on-exchange and off-exchange options. An on-exchange plan is one that is only available via the Marketplace or state-based exchange. These plans offer unique pricing and are eligible for any applicable premium tax credit subsidies the individual may have. These plans are usually more affordable. An off-exchange plan is one offered exclusively outside of the ACA and public exchange parameters. The coverage may differ and could be more substantial.
However, these plans are typically more expensive and don’t qualify for the tax credit discounts.
Public vs. Private
When you see plans labeled as public and private, they’re usually categorized by government and non-government provisions. A public health insurance plan, including Medicare, is sponsored and regulated by the government. Private health insurance plans are those you can leverage through an employer or via the ACA Marketplace. Those private plans can then be segmented into plan types, like HMO, PPO, EPO, and POS. If your household and financial situation qualifies for a public plan, your out-of-pocket expenses will likely be less.
Group vs. Individual
Any health insurance product provided to employees by an employing company or association is considered group coverage. Any health insurance products you buy on your own, independent of your employer, are considered individual coverage. If your employer provides a Health Reimbursement Arrangement benefit or Flexible Spending Account, you’ll still likely be responsible for choosing an individual plan. Those HRA and FSA benefits are designed to help you offset out-of-pocket costs associated with your individual health insurance plan expenses.
There are a few dedicated resources to help you make your final enrollment and plan decisions. If you still need help deciphering, Healthcare.gov can always be a helpful place to start. The Centers for Medicare & Medicaid (CMS) can also be helpful should those programs apply to you.
And when you’re ready to decide, with plan comparisons and enrollment via the Marketplace, you can browse with W3ll. This free service allows you to calculate eligibility and premium tax credits. You can compare plans of all tiers and see apples-to-apples numbers in terms of premiums, copays, deductibles, and more.