Health Insurance and ACA Terms


Insurance Dictionary

Dictionary of Health Insurance and Obamacare

 

If you don’t know what a copay is, you’re apparently in good company. A 2013 study surveying 1,008 Americans showed that 51 percent of adults couldn’t correctly define three of the most important words in health insurance: copay, deductible and premium.

 

“Half of Americans would fail health insurance 101,” as Ernie Almonte, CPA, chair of the American Institute of CPAs, the organization that conducted the study, put it.

 

As nearly everyone is required to buy coverage under the health law, this sort of education is pertinent to your health, finances and future. Not knowing what you’re getting into could cost you in more ways than one.

 

Here are the biggest buzzwords in health insurance you’re likely to encounter throughout the health insurance shopping experience. To further your education, a more comprehensive list of terms can be found in our Glossary.

 

Affordable Care Act (ACA)

Synonyms: healthcare reform, Obamacare, federal health law, Patient Protection and Affordable Care Act of 2010, PPACA, HR 3590

The federal law increasing access to healthcare in America, signed into legislation on March 23, 2010. The law reforms the way the medical and insurance systems operate so that more people are able to pay for health services and get insured.

 

Benefits

The medical services such as doctor’s office visits, prescriptions and emergency care your health insurer agrees to pay for under your insurance policy.

 

Claim

Your medical bill, sent to your insurer as a request to pay for those services.

 

Coinsurance

A percentage of costs you pay for a covered medical service, usually after you meet your deductible.

For example, if your plan covers 80 percent, and your primary care visit costs $100, you pay 20 percent or $20.

 

Copayment (Copay)

A flat fee you pay for healthcare services. The insurer pays the rest of the bill after you give the provider the stated rate.

These rates are established when an insurer designs their plans for the year. For instance, a plan may include $20 copays for office visits and $100 copays for using the ER.

 

Cost Sharing

Your expenses on medical care that your health plan covers. Cost sharing includes copays, deductibles and coinsurance, but not premiums.

 

Coverage

Synonyms: insurance policy, health plan, medical benefits, covered services

Your health insurance plan. Coverage can also refer to the amount your plan pays for approved medical services.

 

Deductible

The amount you must pay for medical care before your health insurer starts covering certain services. If your health plan has a $2000 deductible and doesn’t pay for hospital care until after deductible, you would have to receive $2000 worth of care before the insurer covered a hospital stay.

 

Out-Of-Pocket Costs

The amount you pay for care in copayments, coinsurance or at deductible for covered care. When combined, these costs help you m eet your deductible.

Out-Of-Pocket Limit

A cap the insurer places on your out-of-pocket spending. When you reach the limit, the insurer pays for covered services at 100 percent. Under the ACA, all individual health insurers must begin paying in full when individual policyholders reach $6,350 and when insured families reach $12,700.

 

Premium

The amount you need to pay your insurer each month in order to stay insured.