Health insurance is a pretty straightforward concept: You pay your insurance carrier a monthly premium, and your insurance carrier helps pay for your medical costs.
Unfortunately, what’s not straightforward about health insurance is just about everything else. Healthcare coverage varies by plan type, insurance carriers, the network of doctors that carrier offers and state laws. Plus, each plan has its own set of conditions and coverage amounts for specific medical services.
With so many moving parts, health insurance is tricky to sort out. But luckily, you don’t have to be an expert to find affordable coverage! You just need to learn the basics. Before you search for a plan, check out these 14 need-to-know health insurance terms.
14 Must-Know Health Insurance Terms
1. Patient Protection and Affordable Care Act
The Affordable Care Act (ACA), also known as Obamacare, is a federal law that requires almost every American to have health insurance. The ACA also sets new rules for when you can buy health insurance and what your plan must cover. (Click here for more details on Obamacare).
2. Open Enrollment Period
A set period of about three months when you can enroll in an ACA-compliant health insurance plan. When you sign up for a plan during Open Enrollment, your coverage will begin on or after January 1 of that coverage year.
3. Special Enrollment Period
A period of about 60 days when you can sign up for an ACA-compliant plan, even if Open Enrollment is over. You can only qualify for Special Enrollment if you have a qualifying life event, such as a job change, move, divorce, marriage, birth or adoption, or a 26th birthday.
A form of government-funded financial assistance that lowers your monthly premiums or out-of-pocket costs. Health insurance subsidies are available to people with household incomes below certain levels.
A Health Maintenance Organization (HMO) is a popular type of ACA-compliant health insurance plan. It includes a group of healthcare providers that contract with the HMO and your insurance carrier to provide medical services for you. As an HMO member, you typically won’t be covered if you see a healthcare provider outside your HMO network.
A Preferred Provider Organization (PPO) is another popular type of ACA-compliant plan. A PPO contracts with a network of healthcare providers that are covered by your insurance carrier. You can be covered if you see a healthcare provider outside your PPO network, but you’ll have to pay more.
7. Primary Care Physician (PCP)
A primary care physician (PCP) is your primary contact for all of your healthcare needs. If you have an HMO, you must choose a PCP to perform your wellness visits, routine checkups, and screenings, and to write any referrals to see a healthcare specialist. If you have a PPO, you don’t need a PCP — you can make an appointment with any doctor or specialist in your plan’s network.
8. In-Network Provider
A healthcare provider (PCP, specialist, hospital, clinic, or other medical facility) that is part of your HMO or PPO network. Services from an in-network provider are charged at a discounted rate, so they’ll be much cheaper than services from an out-of-network provider.
9. Out-Of-Network Provider
A healthcare provider that is not included in your HMO or PPO network. You will typically pay much more (possibly full price) to receive care from an out-of-network provider.
The monthly payment you make to your health insurance provider to keep your coverage. Premium rates vary based on the plan you pick.
Also known as a copay, this is the fixed dollar amount you pay to visit a healthcare provider. For example, you might have a $20 copay for a doctor visit, a $40 copay for urgent care, or a $150 copay for the ER.
The amount you pay before your insurance carrier pays for any part of your medical bill. Once you pay the deductible, it will be satisfied for the rest of the year.
After you pay the deductible, coinsurance is the percentage of the medical bill that your insurance carrier will pay. For example, if you have 80-20 coinsurance, your insurance carrier will pay 80% of covered services included on your medical bill. (The higher coinsurance percentage is always paid by your insurance carrier.)
14. Out-Of-Pocket Maximum
The maximum amount that you will pay for medical expenses during the year. Once you reach your out-of-pocket maximum, your insurance carrier will pay 100% of any medical bills that you might have for the rest of the year.
In 2017, the maximum out-of-pocket limit is $7,150 for an individual plan and $14,300 for a family plan.
Learn The Lingo, Find A Plan!
Healthcare coverage protects you and your family from paying the full price of costly medical bills. While health insurance is a must, it can be tricky to figure out which terms actually apply to you — and which terms you can ignore. That’s why we’re here to help!
Regency West Insurance Services offers free, personalized support while you shop for a plan. Just fill out a contact form or give us a call at 858-699-0286. You’ll be put in touch with a friendly, licensed health insurance agent. These insurance experts will answer your questions, clear up your confusion, and help you pick a plan today.
You know the health insurance basics. Now leave it to a licensed agent to find the best coverage for you and your family!