When you try to understand your health insurance plan’s explanation of benefits or look to explore new insurance plans on the marketplace, you might run into a few terms that are new to you. And in an industry chock-full of acronyms and health coverage jargon, it’s easy to get confused. To help you navigate choosing and understanding your health insurance, here are three top categories of health insurance terms, explained.
Health Insurance Cost Terms
There are obviously costs associated with enrollment into a health insurance plan. And while you may already understand the idea behind monthly premiums, there could be a few other cost-related terms that seem to have fuzzier definitions.
One of the most basic health insurance terms everyone usually knows is the deductible. This describes the annual amount you might pay out of pocket for healthcare services before your insurance kicks in and begins to cover services. But where there might be some gray area is understanding what services are considered deductible applicable. Some health insurance plans cover a variety of preventive care doctor visits, for example, regardless of whether or not you’ve met your annual deductible. And using prescription discount platforms, independent of your insurance, may disqualify those out-of-pocket costs from applying to your annual deductible.
Another common health insurance term, especially in regards to plan affordability, is a copay. The copay amount will, of course, vary by plan and by healthcare service rendered and refers to the amount you will pay for each service. Copays might be $30.00 for a visit with your primary care physician. But it might be $75.00 due at the time of service should you visit a specialist doctor. As you explore your health insurance plan options or review your existing plan, you can calculate your copayments towards additional out of pocket expenses you can expect throughout the plan year. Most of the time, copays don’t count towards your annual deductible. However, some plans do have allocations for copays, and reading the details will help you determine how your copay applies.
Once you’ve paid enough out of pocket expenses to meet your deductible, you might now be responsible for your portion of the coinsurance payment. Coinsurance is another health insurance term that represents charges you’ll be expected to pay. Once your insurance coverage kicks in, there is a coinsurance percentage, where you and your provider will split the remaining bills associated with healthcare visits. For example, if your coinsurance is 20%, once you’ve satisfied your deductible, every bill after you can expect to pay $20.00 for every $100.00 you’re invoiced. Your insurance company will pay the other 80% of each bill.
Health Insurance Coverage Terms
Welcome to the world of health insurance, where there’s a new acronym around every corner. And while you may not really need to understand all the types of health insurance plans out there, there are several that you definitely need to know well. And you can’t truly understand your health insurance coverage without having broad familiarity with these health insurance terms.
The Preferred Provider Organization (PPO) plan is a fairly common offering. Your health insurer may only pay a portion of your medical invoice if your healthcare visit is with a provider outside the company’s network. PPOs are great options for many, usually, for those whose doctors, facilities, and hospitals are considered in-network. You are free to visit whomever you like. But it’s important to know how much extra it might set you back if your primary healthcare professionals aren’t in the insurance company’s provider network.
The Health Maintenance Organization (HMO) is another common plan structure. The HMO abides by provider network partnerships much like the PPO does. However, incurring a bill with an out-of-network provider might mean you’re responsible for the whole amount. HMOs are typically the least flexible of all the plans. Coverage could be lost through the HMO, as well, if you change jobs or relocate to an out-of-coverage area.
If you have now or in the past, have had experience with a Health Savings Account (HSA,) you more than likely know everything there is to know about this pre-tax platform. But for those who don’t know or assume it’s similar to a Flexible Spending Account (FSA) with an employer, there’s more to learn. The HSA is like a health savings account where individuals can put in up to $3,350, or more for those over 55, to be used for medical bills and expenses. Using those set-aside dollars for are tax-free and unused funds will typically remain in your HSA account without expiration.
Health Insurance Enrollment Terms
When it comes to signing up for and selecting a new insurance plan, you may already understand the general nature of enrollment. But there are different terms that represent various types of enrollment. And along with them are varying guidelines and restrictions.
Open Enrollment refers to the window of time allocated by the Marketplace for all individuals to buy or make changes to their health insurance plans. During this window of time, usually November through December 15th, you are free to enroll or re-enroll without waiting. Medicare-eligible individuals use this time to make changes to Medicare coverage as well. If you are part of a group plan through an employer, you too will have an Open Enrollment period annually, although it may fall at a different time of year.
Special Enrollment Period
If you miss the annual deadline for Open Enrollment, typically, you’re ineligible to enroll in any Marketplace plan until the next period rolls around again. However, should you or your family experience a qualifying life event or unique circumstance that affects your ability to obtain affordable health insurance, you might qualify for a Special Enrollment Period. Sign up for health insurance outside of the traditional time frames, based on a new life situation, including getting married, moving to a new state, or having a baby. Be mindful of Special Enrollment Period windows of time to enroll, usually 60 days from the first occurrence of the event.
Premium Tax Benefit
The Premium Tax Benefit is a health insurance term you definitely need to know. This refundable tax credit assists eligible applicants to tap into huge savings applied to health insurance premiums. This tax benefit is determined by household income and dynamics. Once approved, a specific dollar amount will automatically be applied as a monthly premium deduction as you browse the Marketplace for insurance plans.
Understanding the various health insurance terms can be invaluable in making your health insurance coverage decisions. For more help unraveling the roster of terms and definitions, to browse your health plans, or calculate a premium tax credit, see the Marketplace through the W3ll lens. Our free service allows individuals and families to learn all the necessary terms and requirements to make the most of today’s affordable health insurance plans.