Your Healthcare Guide

23 Health Insurance Terms You Should Know

insurance-glossary-terms
Understanding the key terms will help you get the coverage you need.
(HEALTH)
Health insurance can be seriously confusing. From choosing a plan (which one is really the cheapest?) to figuring out exactly how much a treatment will cost (did I meet my deductible? what is a deductible?), it can be tricky to navigate health insurance—and honestly, healthcare in general.

The Affordable Care Act should make it easier to understand and get health insurance, and to understand what is covered. But at the same time, it has also introduced some new terms and concepts that you may need to wrap your head around.

Here's what you need to know to get the coverage you need.

Affordable Care Act
Also known as the Patient Protection and Affordable Care Act, or "Obamacare," this is the healthcare reform legislation signed into law by President Obama in 2010. Some provisions of the law, such as universal coverage for preventive services, are already in place. Others will be rolled out in the next couple of years.

Affordable insurance exchange
Sometimes this is referred to as the Health Insurance Marketplace. These exchanges exist at the state and federal levels and allow individuals, families and small businesses to learn about coverage options to suit their income and to compare plans so as to select the one that best fits their needs. People or companies in the market for health insurance fill out one application and get information on all health plans in the area.

Cancellations
In the past, some insurance companies would cancel health coverage because you made a mistake on your application. Under the ACA, companies are no longer allowed to do that, although they can cancel your coverage if you knowingly falsified or omitted information on your application or if you don't pay your premium on time.

COBRA
Stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. Its a federal law that gives you the right to temporarily (for 18 months or more, in most cases) continue with the group insurance plan of your employer even after you leave a job—voluntarily or involuntarily—or when you reduce your hours, such as from full-time to part-time.

Copayments
A fixed amount of money (often $15 or $20) that you must pay out-of-pocket for a healthcare service. It is usually paid at your healthcare provider's office at the time of the visit.

Deductible
The amount of money you must pay out-of-pocket for medical care before your health insurance plan takes over payments. It is usually calculated on an annual basis and, generally, the higher your deductible, the lower your monthly premium.

Dependent coverage
Many insurance plans also provide coverage for family members of the policyholder. Under the Affordable Care Act, dependent coverage for children must be available until an adult child reaches the age of 26.

Drug formulary
A list of all the medications that are covered under your health insurance plan.

Essential health benefits
The Affordable Care Act requires certain health plans for individuals and small groups to offer a comprehensive package of items and services. These essential health benefits include pediatric care, hospitalization, maternity and newborn care, and care for mental health and substance use disorders. This provision of the Affordable Care Act takes effect in 2014.

Grandfathered health plans
Group or individual health plans that were purchased on or before March 23, 2010. These plans are exempt from many of the provisions of the Affordable Care Act.

Healthcare plan categories
Healthcare plans in the insurance marketplace are divided into four categories: Bronze, Silver, Gold or Platinum. The plans differ depending on how much you pay versus how much the plan pays. Platinum plans have the most coverage but the highest premium. Bronze plans offer lower premiums but less overall coverage.

HIPAA
HIPAA is an acronym for the Health Insurance Portability and Accountability Act. It is a federal law that determines standards for handling health information; your rights to confidentiality regarding protected health information; special enrollment in health plans when certain life or work events occur; and availability and renewability of health coverage, among other things.

Next Page: Individual mandate

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