Health insurance can be a very tricky subject, especially if you’re going for it with no one to really walk you through the process. Fortunately, the Affordable Care Act does make it easier for people to both understand and get themselves covered. Before you jump into it, however, there are some terms you need to be familiar with.
1.Affordable Care Act – Also known as Obamacare, this is a health care reform that was signed into law back on March 23, 2010, by former President Obama.
2.Affordable Insurance Exchange – Also referred to as the Health Insurance Marketplace, this is where people or companies can fill out an application more and then get all the information they need about different health plans in their area. Think of it as a one-stop-shop, which makes the search more efficient for first-timers.
3.Cancellations – With the Affordable Care Act in place, no health plan provider would be able to cancel an individual’s coverage just because of an error in their application. However, do note that they can still cancel your current coverage if a) you knowingly included false information in your application, b) omitted important information, and c) don’t pay your premium on time.
4.COBRA – No, not the snake. This stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. With this in place, an individual has the right to temporarily continue using the group health plan provided by your employer (for about 18 months, sometimes more) even after you have left the job (voluntarily or involuntarily) or changed from full-time to part-time.
5.Co-payments – As the name suggests, this is a fixed amount, usually around $20 or less, that you pay out-of-pocket for different health care services. Most of the time, cash is required, though you can also use credit if need be.
6.Deductible – The initial amount of money that you must first pay, out-of-pocket, for medical care before your chosen health policy begins to take over for you. Note that this is often calculated on a per annum basis. Remember, the higher your deductible is, the lower your monthly premiums are. This is typically the best option for people who fall within the average salary range as it makes it easier for them to pay off and can be handled with some strategic money management as well.
7.Dependent Coverage – As you might already know, there are health plans that provide coverage for the policyholder’s entire family. Under the ACA, this must be available for children until they turn 26 years old.
8.Drug Formulary – This is a list of all the different medications covered by your health policy.
9.Essential Health Benefits – Under the ACA, health plans for both groups and individuals offer a list of services and items considered essential to one’s health. This includes hospitalization, pediatric care, maternity, and newborn care, as well as mental health care.
10.Grandfathered Health Plans – This pertains to health policies, which were purchased prior to the signing of ACA on March 23, 2010. These are considered exempt from many of the provisions included in the ACA.
11.Healthcare Plan Categories – Accessing the insurance marketplace, you should find that every plan is divided into four: bronze, silver, gold, and platinum. These differ according to how much you have to pay out-of-pocket and how much your plan would pay on your behalf. Platinum plans would provide you the most coverage, while the bronze ones have lower premiums but also much less coverage in comparison.
12.HIPAA – This stands for Health Insurance Portability and Accountability Act. This determines the different standards for handling any information you give your healthcare provider. This includes confidentiality when it comes to your personal health info, any special enrollment in health plans whenever specific life or work events happen, as well as the renewability and availability of your coverage—among others.
13.Individual Mandate – This is a provision of the ACA that requires any uninsured people, those who can afford the investment otherwise, to purchase a health policy lest they end up facing a penalty.
14.Lifetime Limits – This pertains to a cap on the benefits you can receive from your insurance company over your entire lifetime. Note that the ACA has removed limits for essential health benefits.
15.Medicaid Expansion – This is the government-funded coverage for any individual with disabilities or come from low-income homes. Do note that under the ACA, some of the qualification requirements have since been expanded.
16.MHPA – This pertains to the Mental Health Parity Act, which is a law that requires health policies to also provide for mental health benefits that are equal to their medical benefits. Note that the MHPA only applies to employers who have 50+ employees.
17.Minimum Essential Coverage – This refers to the minimum amount of insurance a person must get for themselves in order to meet the ACA’s individual responsibility requirement so that they can avoid the penalties. Remember, the penalties only apply to people who can afford to get insurance for themselves and pay the monthly premium on it.
18.Pre-existing Condition – This is for any illness or condition that an individual already has prior to starting their coverage under a group health plan. Note that since 2014, health plans are no longer allowed to deny any individual coverage or charge higher if a person has a pre-existing health condition.
19.Premium – This is the investment you make in order to keep your health plan current. It is often paid monthly, quarterly, or yearly by an individual or their employer.
20.Preventive Services – Under the ACA, these services should be 100% covered by your current health plan. An example of a preventive service includes blood pressure screening, mammogram screening, vaccines, and colonoscopies.
21.Special Enrollment – This pertains to an individual joining a group health plan whenever specific work or life events happen, regardless of the regular enrollment dates. For example, a special enrollment occurs when you have a child or when you get married. Your provider should give you at least a month or 30 days to request this.
22.Summary of Benefits and Coverage – This basically outlines all of the healthcare coverage made available by your insurance plan under the ACA.
23.Tax Credit Premium and Advanced Premium – This is a tax break that should assist you with finding the investment money for purchasing appropriate health coverage from the Marketplace.