Getting insurance shouldn’t be rocket science.
Between figuring out what a co-pay is and if a catastrophic plan is really as bad as it sounds, health insurance can be hard. We’ve put together the basics to get you on your way to making confident decisions.
Common Terms
Co-Pay
A fixed amount (for example, $15) you pay for a covered healthcare service, usually when you get the service. The amount can vary by the type of covered healthcare service.
Deductible
The amount you owe for covered healthcare services before your health insurance plan begins to pay.
Co-Insurance
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 co-insurance 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% co-insurance payment would be $20. The health insurance plan pays the rest.
Maximum Out of Pocket
The most you pay during a policy period (usually one year) before your health insurance or plan starts to pay 100% for covered essential health benefits. This limit must include deductibles, co-insurance, co-payments, or similar charges and any other expenditure required of an individual which is a qualified medical expense for the essential health benefits. This limit does not have to count premiums, balance billing amounts for non-network providers and other out-of-network cost-sharing, or spending for non-essential health benefits.
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.
Dependents
A child or other individual for whom a parent, relative, or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, individuals may be able to claim a premium tax credit to help cover the cost of coverage for themselves and their dependents.
Types of coverage
In the new health insurance market, each plan is categorized by its “actuarial value”, the share of health care expenses the plan will cover. Bronze plans are less generous toward the consumer, meaning the consumer will pay more out of pocket than a Silver and a Gold. However, they will also have a lower monthly premium. There is no “one size fits all”, it is important for you to find your comfort level.
Plan Covers 80%
You Pay 20%
Plan Covers 70%
You Pay 30%
Plan Covers 60%
You Pay 40%
Plan Covers Less Than 60%
You Pay More Than 40%
Provider Choices
Depending on your plan, you may be somewhat limited in how you choose a doctor or healthcare provider. Insurance companies typically have their own networks of providers – some plans limit you to only those providers, while others give you more options.
Exclusive Provider Organization (EPO)
As a member of an EPO, you can use the doctors and hospitals within the EPO network, but cannot go outside the network for care. There are no out-of-network benefits.
Health Maintenance Organization (HMO)
As a member of a HMO, you must stay within the network and typically need to assign a Primary Care Physician (PCP). Your PCP is relied on by the carrier to be active in your care and keep claims low. HMO plans typically require you to both stay in-network and seek referrals for care from your PCP, otherwise you may be responsible for the entire bill.
Preferred Provider Organization (PPO)
Is a managed care organization of medical doctors, hospitals, and other healthcare providers who have agreed with an insurer or a third-party administrator to provide healthcare at reduced rates to the insurer’s or administrator’s clients.
Point of Service (POS)
This plan combines characteristics of the health maintenance organization (HMO) and the preferred provider organization (PPO). The POS is based on a managed care foundation—lower medical costs in exchange for more limited choice.