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, health care 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.
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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 health care 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.
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Copayments
A fixed amount of money (often $15 or $20) that you must pay out-of-pocket for a health care service. It is usually paid at your health care 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 went into effect in 2014.
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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.
Health care plan categories
Health care 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.
Individual mandate
The provision of the Affordable Care Act which requires uninsured people to buy health insurance or face a penalty.
Lifetime limits
A cap on the total benefits you may receive from your insurance company over your lifetime. The Affordable Care Act eliminates lifetime limits for essential health benefits. As of 2014, insurance companies can not impose yearly limits either.
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Medicaid expansion
Government-funded health coverage for people with low incomes and people with disabilities. The program has expanded some of its eligibility requirements under the Affordable Care Act.
MHPA
The Mental Health Parity Act is a federal law that requires health plans to provide mental health benefits that are equivalent to the plans medical benefits. MHPA applies only to employers with more than 50 employees.
Minimum essential coverage
The least amount of health insurance an individual must acquire to meet the Affordable Care Act's individual responsibility requirement and so avoid a penalty.
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Preexisting condition
An illness or condition that existed before the start of a person's coverage under a group health plan. As of 2014, insurance plans can no longer deny coverage or charge you more because you have a pre-existing health condition.
Premium
The amount of money you and/or your employer must pay to keep your health insurance current. It is usually paid monthly, quarterly, or yearly.
Preventive services
The Affordable Care Act requires that preventive services be 100% covered by your health insurance plan. Examples of preventive services are mammogram screenings, colonoscopies, blood pressure screening, and vaccines.
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Special enrollment
Joining a group health plan when certain work or life events occur, regardless of the plans regular enrollment dates. Generally, special enrollment is available when you, your spouse, or your dependents lose other coverage; when you marry; or when you have a child. The plan must give you at least 30 days to request special enrollment.
Summary of benefits and coverage
An easy-to-understand summary of your coverage which must be available from your health insurance plan under the Affordable Care Act.
Tax credit premium and advanced premium
A tax break to help you afford health coverage through the Marketplace.
Source: Adapted from the U.S. Department of Labors Health Benefits Advisor Glossary and the Health Benefits Advisor Glossary.
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