The Affordable Care Act makes health care available to more people. For many, this will be the first time they’ll use a health insurance plan. Health insurance, like many other things in life, has terms to describe certain things. In this post, we’re going to look at a few of the most commonly used health insurance terms to know.
1. Affordable Care Act- the ACA is the federal law that was passed by Congress and signed into law in March 2010.
2. Health Insurance – helps pay part of the cost when you’re sick or hurt. Health insurance is a contract between you and your insurance company. You buy a health plan from the company. They agree to pay some of your medical costs when you are sick.
3. Premium – this is the amount that you pay for your plan. For some qualified people, the government may provide a subsidy to help pay this amount.
4. Covered Services – this describes what is covered, or able to be paid for, by your health plan. It’s important to know what is covered to help save money.
5. Benefit - this is the amount that your insurance company will pay for covered services.
6. Exclusion – these are items that are not covered under the plan. The cost for these services is usually full price and you will pay for out-of-pocket.
7. Provider – this is used to describe any provider of service – including doctors, hospitals, and pharmacies.
8. Network – the facilities, providers and suppliers that contract with your insurance company to provide medical services. Using these providers, also known as “staying in-network,” is one way to save money.
9. Non-participating – this describes a doctor or provider that doesn’t have a contract with your insurance company. Services for these providers typically cost more because they are not in-network.
10. Claim – this is a request for payment from your provider to your insurance company to be paid for medical services.
11. Allowed Amount – this is the maximum amount that your insurance company pays for medical services. The deductible, copay and coinsurance are based on this amount.
12. Coinsurance – this is your share of the costs of a covered health care service, calculated as a percent. This usually comes into play after meeting your deductible.
13. Copay – this is a set dollar amount, or fee; you pay for a covered health care service, usually when you receive the service.
14. Deductible – this is a fixed dollar amount that you pay before your insurance company starts to pay for covered services. This amount is set up front and is typically good for a period of one year.
15. Out-of-Pocket Maximum - this is the maximum amount that you or your family pays for a set period, usually a year, before the insurance company picks up your copays, coinsurance and other out of pocket expenses. It’s important to note that the maximums are typically different for in- and out-of-network providers and these two amounts are usually not combined.
16. HSA (health savings account) – this is a savings account that you can put money into to help pay for medical expenses. You are not taxed on the money you add. You have to have a qualifying plan to have an HSA and this is regulated by the government.
This just covers a few of the most commonly used health insurance terms and definitions that you’ll come across in using your insurance plan. I enjoy hearing from each of you so please take a minute to drop me a line and let me know about some terms you have come across. Until next time…