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20 Terms To Know Before You Enroll For Health Insurance 

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Written by: Benavest

BenaVest is an Insurance Agency dedicated to providing knowledge, services of Insurances like Health, Life, and Retirement. We want dedicate our time to bringing you the best services possible.

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August 31, 2020

It is a good idea to brush up on these 20 terms before you enroll in your health insurance plan. These terms will familiarize you with many of the intricacies of health insurance plans and the Obamacare Marketplace.

 

Affordable Care Act

Commonly referred to as ACA or Obamacare, the Affordable Care Act is the healthcare reform signed into law in March 2010. One of the goals of the ACA is as its name implies, to make health care affordable for the masses.

 

Coinsurance

Coinsurance is the amount you will need to pay for covered services after your deductible has been met. Depending on your plan and whether you have paid the deductible you will likely pay coinsurance for most of the services you get done. Coinsurance is a percentage of the cost of a covered service.

 

Copayment

Copayment is a fixed amount of money that you will need to pay for covered services after your deductible has been met. Your plan will guarantee the copay for some services. For example a regular visit to the doctor’s office may be $100 but your insurance plan guarantees that, after your deductible has been paid, all you need to pay is a copay of $30

 

Deductible

A deductible is the amount that you must pay for covered services in a given year before your health insurance plan takes over and begins to pay things for you. 

 

Different plans vary depending on what level you have of insurance you may need to pay more or less deductible in a given year.

 

Dependant

Dependants are children or a spouse that is claimed as a personal exemption tax reduction. Anyone you claim on your tax return is a dependent. Because of the ACA you may qualify for a tax credit to help you pay for your dependents.

 

Normally you can have multiple dependents under a health insurance plan. Having more dependents raises the annual deductible.

 

Drug formulary

A drug formulary is a list of prescription drugs that are covered by your insurance plan. If there are any necessary drugs that you need to but then you may be able to purchase those drugs with a Flexible Spending Account or Health Savings Account.

 

Effectuation date

Effectuation date is the day that your health insurance plan begins. Your plan will normally begin once you have made your first payment.

 

Essential health benefits

Thanks to the ACA all health insurance plans are required to offer the essential health benefits. These benefits include:

  • Ambulatory services
  • Pregnancy and childbirth
  • Pediatric services
  • Preventive services including many different kinds of doctor’s visits and health screenings.
  • Prescription drugs
  • Hospitalization, even overnight stays if necessary
  • Mental health and substance use disorder services
  • Emergency services and urgent care
  • Rehabilitation services
  • Lab services

In-network

In-network is when a doctor, hospital, or other primary care provider have contracted with your insurance plan to agree on the costs that will be covered and costs that you will pay. 

 

Marketplace

The health insurance Marketplace is the one-stop-shop and enrollment service that was made by the ACA. In the health insurance Marketplace, you will be able to shop for multiple different kinds of health insurance plans. The majority of states will run the Marketplace on HealthCare.gov

 

Metal Levels

Metal levels are the levels of coverage a specific plan covers. All plans provide the same quality of care. The difference in these plans is related to the ratio your plan will pay for your health care services and the amount of money you pay for health care services out of pocket.

 

Metal Level Paid by Insurance Paid By You
Bronze 60% 40%
Silver 70% 30%
Gold  80% 20%
Platinum 90% 10%

 

Network types

The most common health insurance plans available on the Marketplace are HMO, PPO, EPO, and POS.

 

(HMO) Health Maintenance Organization

This is the most common type of plan. These plans primarily cover preventive care services and require someone with an HMO to have a primary care physician.

 

(PPO) Preferred Provider Organization

These plans offer more flexibility when it comes to choosing a healthcare provider, specialist, or hospital.

 

(POS) Point Of Service 

These plans cost less, if the patient uses services and health care professionals in-network.

 

(EPO) Exclusive Provider Organization 

Only in-network services and providers accept this plan (except in emergency situations).

 

Open Enrollment Period

The Open Enrollment Period is the time of year where you can shop and enroll in health insurance plans on the Marketplace. It normally runs from November 1, to December 15.

 

Out-of-network

Out-of-network doctors, hospitals, or primary care providers do not accept costs approved by a person’s health insurance company. Individuals are responsible for the payment of services that are done out-of-network. 

Out-of-pocket maximum

An out of pocket maximum is the maximum amount you will ever pay in a year with an ACA plan. Once your yearly deductible has been met, you will no longer need to pay for any of your health insurance services. This is especially helpful for people with preexisting conditions that know they will need to visit their primary care providers many times in a given year. The out-of-pocket maximum ensures that an unlimited amount of health care is available to everyone for a limited amount of money out of pocket in a year.

 

Premium

Premiums are the monthly fee you are charged for remaining in a plan with your health insurance provider. These premiums do not get calculated for your out-of-pocket maximum. They simply keep you in your health coverage plan and guarantee how much copay, coinsurance, and deductible you will pay for your health insurance.

 

Pre-existing conditions

A Pre-existing medical condition is a health issue that an individual has gotten before enrolling for health insurance. Some common pre-existing health conditions include, diabetes, asthma, cancer and more. Before the ACA health insurance agencies could either deny coverage for individuals that had pre-existing conditions or charge them more for their coverage. Now that can not happen, health insurance agencies can no longer discriminate against these individuals.

 

Preventive services

Preventive services are services that are carried out by primary health care providers, or hospitals. The ACA has also mandated that most preventive care services are covered by all health insurance plans. 

 

Special Enrollment Period

If you miss the (OEP) Open Enrollment Period to enroll in health insurance coverage you may still qualify for (SEP) Special Enrollment Period. You must have experienced a Qualifying Life Event to enroll with SEP. These life events include:

 

  • Losing healthcare coverage because of job loss or decrease in hours
  • Marriage
  • Moving
  • Having or adopting a child
  • Making too much money to qualify for Medicaid or Medicare
  • Aging out of a parent’s health insurance plan

 

Normally Special Enrollment Periods last for 60 days. 

 

Subsidy

Depending on what plan you get and the amount of income you make, you may qualify for a subsidy. Subsidies are tax credits that are paid to qualifying individuals to help them pay for their insurance premiums. Another form of subsidy is Cost Sharing Reductions. These subsidies reduce the cost of copayments, coinsurance, and deductibles.

 

Conclusion

 

Now that you are armed with all of this information on health insurance terms, you can go to the ACA Marketplace and shop for the perfect plan that fits you best!

 

For more information on insurance plans look here.

 

Source: Healthsherpa.com

 

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