The mystifying world of health insurance terminology can be intimidating. Arming yourself with a clear understanding of common insurance terms can help you make informed decisions about your health.
To ensure you move forward with confidence, here is a breakdown of the jargon and words that you may encounter the most.
Adjusted Gross Income: A person’s total income for the year, minus certain adjustments.
Agents/Brokers/Enrollment Counselors: Trained professionals who can help assist consumers with their health insurance enrollment. There is no cost to use their services.
Allowed Amount: The maximum amount your health plan will pay for a covered healthcare service.
Balance Billing: When the cost for a healthcare service is greater than what is allowed by your plan, you may have to pay the difference.
For example, if the cost for a healthcare service is $100 and the allowed amount is $80, your provider may bill you for the remaining $20.
Binder Payment: The first initial payment to your health insurance carrier completes your enrollment. If you fail to pay your first month’s premium, your policy will not take effect and you will not be enrolled in coverage.
Co-insurance:
The percentage you pay for covered health services after your deductible is met. Your health insurer or plan pays the rest of the allowed amount. Depending on your plan, your portion of the co-insurance could range from 20-40%.
Co-payment:
The fixed amount you pay for a medical visit or medication, e.g., $15 per visit, is usually paid at the time you receive the service. This is considered part of your out-of-pocket costs, separate from premiums and deductibles. This may vary by the type of health care services being provided.
Deductible:
The amount you must pay for health care services during a coverage year before your health insurance carrier starts covering costs. For example, if your plan has a deductible of $1,000, you will have to pay for any covered healthcare services that are subject to the deductible until you reach the $1,000 amount. After that, your plan will start covering costs according to your plan benefits. The deductible may not apply to all services.
Dependent: A person who is eligible for coverage under a policyholder’s health insurance plan. A dependent may be a spouse, domestic partner, or child. In some cases, you may also be able to cover a grandchild, an adult child with a disability, a foster child or someone for whom you are the legal guardian.
Emergency Medical Condition: An illness, injury, symptom (including severe pain), or condition severe enough that it requires immediate medical attention.
Emergency Medical Transportation: Ambulance services for an emergency medical condition. Your plan may include transportation by air, land, or sea.
Emergency Room Care/Emergency Services: Services provided to treat an emergency medical condition. Services may be provided in a licensed hospital’s emergency room or any location providing emergency medical services.
Excluded Services: Healthcare services that your plan does not cover or pay for.
Explanation of Benefits: A document that outlines the costs of a visit, what your health insurance policy covers, and how much you may owe. This is not a bill.
Habilitation Services: Healthcare services that help you keep, learn, or improve skills and functioning for daily living.
e.g., therapy for a child who isn’t walking or talking at the expected age or someone recovering from a stroke. May be inpatient or outpatient services.
Hospital Outpatient Care: Care in a hospital that does not require an overnight stay.
Hospitalization: Admission to a hospital as an inpatient that usually requires an overnight stay.
In-Network: Physicians, hospitals, or other healthcare providers your health insurer has contracted with to provide your health services. You may pay less when receiving in-network healthcare.
Medically Necessary: Healthcare services that are provided to a patient to prevent, evaluate, or diagnose an illness, injury, condition, disease, or its symptoms. Services deemed medically necessary must meet recognized standards of medicine.
Modified Adjusted Gross Income: The figure used to determine eligibility for premium tax credits and other savings for Marketplace health insurance plans.
Network: Providers, healthcare facilities and suppliers who have contracted with your insurance company to provide services.
Non-Preferred Provider: A provider who does not have a contract with your insurance carrier. You may pay more to see a non-preferred provider.
Out-of-Network: Physicians, hospitals, or other healthcare providers your health insurer has not contracted with to provide your health services. Costs for out-of-network healthcare are typically higher.
Out-of-Pocket Costs: Medical Expenses that aren’t covered by your insurance plan. Out-of-pocket costs include deductibles, co-insurance, co-payments, and charges for services not covered.
Out-of-Pocket Maximum/Limit: The most you’ll pay for covered services within a coverage year. After you reach this max limit your health plan will pay for 100% of the costs.
Out-of-pocket limit does not include:
- Your monthly premium
- Out-of-network care and services
- Anything spent on services your plan doesn’t cover
- Costs above the allowed amount for a service that a provider may charge
Preauthorization: A health care service, treatment plan, prescription drug or use of medical equipment that must be approved as medically necessary by your health insurer. This may be required for certain services before you receive them. Preauthorization doesn’t guarantee your health insurance will cover the cost.
Pre-Existing Condition:
Any health problem like asthma, diabetes, or cancer you had before the date new health coverage starts. You cannot be denied coverage through Your Health Idaho due to a pre-existing condition.
Preferred Provider: A physician or doctor who has a contract with your health insurance company to provide services at a discounted rate.
Premium: The amount you pay for your health insurance every month.
Prescription Drug Coverage: Health insurance or plan that helps pay for prescription drugs and medications.
Primary Care Physician/Provider: Doctor or healthcare specialist who provides, coordinates, or helps a patient access a range of health care services.
Provider: A health professional or facility licensed to provide health care. Doctors, nurses, hospitals, and specialists are examples of health care providers.
Specialist: A physician or provider that focuses on a specific area of medicine or health care.
Urgent Care: An illness, injury, symptom (including severe pain), or condition that is serious enough for a person to seek care right away but does not require emergency room care.
Marketplace Insurance Terms
During and after enrollment you will come across terms that relate specifically to coverage purchased through a Health Insurance Exchange like Your Health Idaho. These are the terms you may see frequently.
Advance Premium Tax Credits (APTC): A tax credit that acts as an instant discount to cover some or all the monthly costs for health insurance coverage. The tax credit amount will depend on income level, household size, and other factors.
Cost-Sharing Reductions: A discount that lowers the amount you pay out-of-pocket for things like deductibles, co-insurance, and co-payments. To qualify for a CSR your income must be within a certain range of the Federal Poverty Level (FPL) and you must be enrolled in a Silver Tier Plan.
Essential Health Benefits: Under the Affordable Care Act, health insurance plans purchased through a state-based marketplace must cover a set of 10 categories of services; some plans may cover more.
All plans offered through Your Health Idaho cover at least the following: Doctor Visits, Hospitalization, Emergency Services, Mental Health & Substance Abuse Services, Rehabilitative & Habilitative Services, Maternity & Newborn Care, Laboratory Test, Prescription Medicine, Preventive Wellness & Screenings, Pediatric Care
Federal Poverty Level (FPL): Guideline issued by the Department of Health and Human Services that determines eligibility for various income-based public programs.
Idaho Department of Health and Welfare: State agency that administers state and federal public assistance and health coverage programs.
Medicaid: Government program that provides health insurance for adults and children with limited income and resources.
Medicare: Federal health insurance program for adults 65 or older, and certain younger people with disabilities.
Minimum Essential Coverage: Any insurance plan that meets the Affordable Care Act requirement for having health coverage is sometimes called “qualifying health coverage.” All plans sold through Your Health Idaho meet the requirements.
Open Enrollment: The period from October 15 to December 15 each year when Idahoans can enroll in health insurance plan for the coming year. During Open Enrollment, Idahoans already enrolled with Your Health Idaho can make changes or renew their existing coverage.
Qualified Health Plan: A health insurance plan certified by Your Health Idaho provides the ten essential health benefits, follows established limits on cost-sharing (like deductibles, co-payments, and out-of-pocket maximum amounts), and meets other requirements.
Qualified Dental Plan: A dental insurance plan that helps pay for the cost of dentist visits for basic or preventive services like teeth cleaning, X-rays, and fillings. In the Marketplace, dental coverage is available either as part of a comprehensive medical plan or as a “stand-alone” dental plan.
Qualifying Life Event: A change in your life that can make you eligible for a Special Enrollment Period, allowing you to enroll in health coverage outside of Open Enrollment. Examples of qualifying life events are moving to or within Idaho to a new rating area, changes in your income, loss of employer-sponsored coverage, and changes in your family size e.g., marriage or having a baby).
Reconcile: The process used to confirm you received the correct American Premium Tax Credit amount during the year. You reconcile your tax credit by using your Form 1095-A to fill out Form 8962 with your federal tax return.
Second Lowest Cost Silver Plan (SLCSP): The second-lowest priced health insurance plan in the Silver category that applied to you. The SLCSP is used to calculate your final premium tax credit. You do not have to be enrolled in this plan.
Special Enrollment Period: A time outside of the Open Enrollment period during which you and your family can enroll in health coverage. To qualify for a Special Enrollment Period, you must experience a Qualifying Life Event.
Tax Filing Requirement: The minimum amount (or threshold) of income requiring you to file a federal tax return.