Health care terminology

Affordable Care Act

Otherwise known as Obamacare, this is the healthcare reform act President Obama signed into law on March of 2010.

Brand name drugs

A prescription drug, sold by a company, that is protected by a patent.

Coinsurance

This is how much you pay after you’ve reached your deductible when your carrier doesn’t cover the full cost of service, which is typically around 30% of the cost.

Copay

A set and typically small amount you have to pay for a medical service. This amount can vary depending on your insurance plan. Example: Many insurance plans have a $25 copay for primary healthcare provider visits, which means you pay $25 for your doctor’s appointment.

Deductible

This is the amount you will pay for medical costs subject to the deductible until your carrier picks up the rest of the tab. Deductibles are different for each plan. Example: You have a silver plan with a $4,000 deductible; this means your insurance won’t pay for certain services until you’ve paid the $4,000 deductible.

FSA (Flexible Spending Account)

A medical savings account set up through an employer and can be deducted from employee’s paycheck. The tax-free funds can be used for a range of medical costs. Unused funds DO NOT carry over each year.

Generic drugs

A prescription drug that has the same ingredients as a brand name drug. Typically these pills cost less than brand name drugs and are deemed safe by the FDA.

HMO

Health Maintenance Organization (HMO) plan means you have to get referrals from your primary care physician in order to see a specialist. You also need to select your primary care physician when enrolling, otherwise the carrier will do it for you. HMOs typically have the least amount of providers out of all plan types. In other words, you’re paying for two doctor visits.

HSA (Health Savings Account)

A medical savings account typically available with high deductible health plans. The enrollee of the plan can make contributions to their HSA without being subject to federal income tax. The funds can be used for a range of medical costs. Unused funds roll over each year.

In-network

This means your doctors or services are covered by your insurance plan.

Lifetime limit

The amount your carrier will pay in total, period. Once that amount is met, the carrier will no longer cover expenses, which is typically around $1,000,000.

Out-of-network

This means your doctors or services are NOT covered by your insurance plan.

Out-of-pocket max

This amount is the most you will pay for medical expenses in a given year. Example: No matter what your medical costs are in a year, you will never pay more the the out-of-pocket max amount, which is typically under $10,000 for an individual.

PPO

Preferred Provider Organization (PPO) means you can see any provider or specialist within your network and you don’t need a referral to do so. You also don’t have to select a primary care physician when enrolling. PPOs generally have the most providers out of all plan types.

Premium

This is your monthly payment for your health insurance plan.

What is deductible insurance?

Most health insurance plans have a deductible, and if you find yourself needing expensive medical care, you’ll end up paying some or all of that deductible before your insurance pays in.

Getting smacked with a $6,900 bill while you’re convalescing can be stressful. Luckily, deductible insurance can help ease that worry. By spending a small amount each month, you’ll get a check if you should find yourself in an accident, with a critical illness diagnosis or hospitalized.

For $25 a month, you’ll get a check for $2,500.
For $40 a month, you’ll get a check for $5,000.
For $50 a month, you’ll get a check for $7,500.

(It doesn’t matter what your deductible is; you pick the monthly amount that works best for you.)

Here are two scenarios of when deductible insurance can be super helpful:

Scenario #1: Jason M. got into a car accident and had to be taken by ambulance to the hospital in order to be treated for a head injury and broken arm. He was in the hospital for two days before being released. His total medical bill was $10,200 and his bronze-level health insurance plan had a deductible of $6,900. Jason owed the hospital his deductible of $6,900.

Scenario #2: Judy S. was diagnosed with breast cancer and needed an emergency lumpectomy. She was in the hospital for two days before being released. Her total bill was $7,000 and her silver-level health insurance plan had a deductible of $3,000. Judy owed the hospital her deductible of $3,000.

In both of these instances, which are often quite common, Jason and Judy could have saved themselves thousands of dollars by purchasing affordable (and ultra-awesome) deductible insurance. In Jason’s case, if he had purchased deductible insurance at $50/month, he would have received a check for $7,500 to cover his deductible. In the first year, Jason would have paid $600 ($50 x 12 months) to get a check for $7,500. That’s $6,900 in savings! As for Judy, at $40 a month, she would have received a check for $5,000. In the first year, Judy would have spent $480 to get $5,000 in return ($4,520 in savings).

Please note: Unfortunately, deductible insurance does not cover preexisting conditions. For example, if you have an illness when purchasing deductible insurance, you won’t be able to get a check from the policy when you go to the hospital for medical care.

What is the penalty for not having health insurance?

The penalty for not having health insurance in 2018 is expected to be $695 per adult and $347.50 per child (up to $2,085 for a family), or it’s 2.5% of your household income above the tax return filing threshold for your filing status – whichever is greater.

You’ll pay 1/12 of the total fee for each full month in which a family member went without coverage or an exemption.

The payment has stayed the same since 2016. The fee for 2018 has not been published yet, but you should expect that the fee would not increase this year. It may either stay the same or increase each year moving forward.

What are the differences between the insurance companies?

Aetna: Aetna offers Teladoc, 24/7 access to a doctor, free of charge. Aetna also doesn’t require you to designate a primary care physician upon applying for a plan. This means you don’t have to get a referral from your PCP in order to see a specialist. Aetna is only offering EPO plans in 2016 (this could change next year).

Fact: Aetna was founded in 1853. Happy 163rd birthday, Aetna!

UnitedHealthCare: UnitedHealthCare has the largest network of doctors. A plan with UHC requires that you designate a primary care physician upon applying, and you need a referral from your PCP to see a specialist. UHC is only offering EPO plans in 2016 (this could change next year).

Fact: UHC is the largest health insurance carrier in the U.S.

Blue Cross Blue Shield: Blue Cross Blue Shield is only offering HMO plans for 2016 (this could change next year). With an HMO plan, you will need to designate a primary care physician and get a referral from you PCP to see a specialist.

Fact: One in three Americans use Blue Cross Blue Shield.

Humana: Humana primarily offers HMO plans for the year of 2016. They also have one Bronze PPO plan. With an HMO plan, you will need to designate a primary care physician and get a referral from you PCP to see a specialist.

Fact: Humana began as a nursing home company.

Scott and White: Scott and White has both HMO and PPO plans available in 2016, however, their network is localized to Central Texas.

Fact: Scott & White is available in 77 counties across Texas.

How does health insurance work?

According to Oxford Dictionary, insurance is “an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness or death in return for payment of a specified premium.”

Let’s break it down in real talk:

You find an insurance plan that you like. Yay! You pay a monthly premium to the health insurance carrier so that they will cover any potential medical needs you will have. The carrier holds your money until you make a claim (i.e. go to the doctor, the emergency room, get a prescription), and then they will help pay for the service you received. What they pay you depends on your deductible, co-pay or your co-insurance.

How much does a health insurance broker cost?

Health insurance brokers are free (at least for the person buying the plan, which is YOU).

Here is how a broker works:

You contact a broker and tell them what you’re looking for in a health insurance plan. They do some research and give you a couple of plan options. You select the option you want and purchase the plan through the broker (again, this is free to you). This is when the relationship begins between you and the health insurance carrier you just bought a plan with. Essentially a broker is like a middleman (or woman!), and the carrier pays the broker a commission for making this connection.

Brokers are free to you and they’re really helpful: they save you the time and energy of searching for a health insurance plan.

What is Open Enrollment and what are the deadlines?

Open enrollment is when you can buy individual health insurance. The dates for open enrollment for 2018 are November 1, 2018 – December 15, 2018.

Who manages my health savings account (HSA)?

The short answer is YOU. You manage your HSA (health savings account).

If your health insurance plan is HSA-eligible and you want an HSA, you will need to open one through a participating bank. Call or Google your bank to see if they offer an HSA. If not, a quick Google search will show you which banks offer HSAs.

When you purchase a health insurance plan through us, we can open a KindHealth HSA for you! We will do all the work- the only thing you’ll need to do is fund and use your HSA. Let’s get started!

What’s considered tobacco use?

If you use tobacco, whether it’s cigarettes, cigars, chewing tobacco or e-cigs, more than three times a week for the past six months, you are considered a tobacco user according to your health insurance carrier.

Does HealthCare.gov have cheaper plans?

First, no one has “cheaper” health insurance plans, period. All health insurance plans are the same price everywhere, whether you get a plan on HealthCare.gov, through a broker or through a website. It’s illegal for anyone to offer you a “cheaper” plan.

However, HealthCare.gov does offer subsidies, and it’s the only place where you can apply for and potentially receive subsidies.

What’s a subsidy?

It’s essentially government assistance. If you make around $30,000 a year or under, you may be eligible for subsidies.

What’s the difference between an on-exchange plan and an off-exchange plan?

When you hear the term “on-exchange” when associated with a health insurance plan, that refers to HeathCare.gov, the U.S. government’s marketplace to buy health insurance. In other words, an on-exchange health insurance plan is a plan available on HealthCare.gov. You may also hear it referred to as a “private exchange” plan.

Conversely, when you hear the term “off-exchange” when associated with a health insurance plan, that means it’s not available through HealthCare.gov. An off-exchange health insurance plan is a plan available through something like an insurance broker, a health insurance carrier or us, KindHealth!

What is an HMO plan?

A Health Maintenance Organization plan (HMO) means you can only consult with physicians in your HMO network, otherwise you will pay out-of-network expenses (unless it’s an emergency). HMOs are often the most limited type of health insurance plans. When you apply for an HMO, you must select a primary care physician, and you have to get a referral from that primary care physician in order to see a specialist.

In plain English:
An HMO plan means a lot of your doctors may not take your insurance card. It’s important to check if your doctors take HMO plans before you apply. The other bummer is that you need to select your PCP (primary care physician) upon applying AND you have to get a referral from your PCP to go see a specialist (meaning you have to pay for TWO appointments). However, the nice thing about HMO plans is that they often have lower monthly costs because they don’t offer as wide of a doctor network.

HMOs are a great option if you can’t afford expensive monthly payments and don’t plan on going to the doctor a lot. If you do plan on going to the doctor a lot, a PPO, POS or EPO plans might be a better option.

What’s an EPO plan?

In technical speak:
An Exclusive Provider Organization plan (EPO) is similar to an HMO plan in that it has a limited doctor network and no out-of-network coverage, but it is similar to a PPO plan in that you don’t have to designate a primary care physician upon applying, and you don’t need a referral to see a specialist.

In normal speak:
The sweet thing about EPO plans is that you don’t need to see your doc to get a referral to see a specialist. That means you pay for only ONE doc appointment. You also don’t have to designate your primary care physician when you apply, which is nice since sometimes we don’t have a primary care physician. The only bummer thing is that EPO plans don’t offer a huge coverage network. That’s why it’s important to see if your doc takes your EPO plan before you apply. Also, make sure you don’t get medical services outside of your coverage network, otherwise you’ll be paying an arm and a leg.

What’s a POS plan?

In technical speak:
A Point of Service plan (POS) is similar to a PPO plan in that you don’t have to list a primary care physician upon applying, and you don’t have to get a referral to see a specialist. However, POS plans do not have as an expansive network of doctors as PPO plans do. You also want to stay in your POS network to pay less.

In normal speak:
We know what you’re thinking. POS sounds like an acronym for a crappy person. In this case, POS is a type of insurance plan that offers sweet PPO-like perks in that you don’t have to get a referral from your doc to see a specialist (saving you the cost of one doc appointment). However, POS plans don’t have a large coverage network, meaning your doctors may or may not take your POS plan. It’s important to check before you apply for this type of plan.

What’s a PPO plan?

In technical speak:
A Preferred Provider Organization plan (PPO) covers you in and out of network, though it is in your best interest to stay in network because you could end up paying more. With a PPO plan, you don’t need to assign a primary care physician upon applying, and that physician doesn’t need to give you a referral to see a specialist. PPOs typically have the biggest doctor network; however, PPOs are starting to be phased out by carriers.

In normal speak:
PPO plans are the bee’s knees. Unfortunately, they’re starting to disappear along with the bees; PPO plans are being phased out by carriers. Lame, we know. However, some still exist. Why are PPOs so awesome? They have the largest doctor network, which means there’s a good chance all your doctors take your plan. Also, you don’t have to see your primary care physician before seeing a specialist, saving you the cost of two doctor visits. The only downside to PPOs is that they probably have a more expensive monthly cost since they’re such good plans.

What’s a limited health plan?

A limited health plan has a low monthly cost, but you’ll end up paying A LOT more in the long run.

Here’s why:

  • Limited plans have high co-insurance and co-pay amounts.
  • Limited plans only cover some medical care and usually have a low payout ($1,000-$5,000).
  • Limited plans don’t cover mental health care.
  • Limited plans don’t have an out-of-pocket max (a.k.a. the most you’ll pay for your medical bills). In other words, if you get in a car accident or have cancer, your bills will just keep accumulating because your insurance won’t kick in.

Another thing you should know about a limited health plan is that it’s not qualified under the Affordable Care Act. That means you’ll still have to pay a tax penalty.

What’s a HealthShares plan?

HealthShare plans are not insurance, but in many ways are better than insurance. HealthShare plans are a way for like-minded individuals to pay for healthcare expenses. HealthShare plans are non-profit organizations that save their members thousands of dollars in unnecessary health care costs and its members are exempt from the Affordable Care Act mandate, taxes and penalties.

What are health savings accounts (HSA)?

In technical speak:
An HSA (health savings account) is a medical savings account typically available with high deductible plans. The enrollee of the plan can make contributions to their HSA without being subject to federal income tax. The funds can be used for a range of medical costs. Unused funds roll over each year.

In other words, HSAs are awesome. They’re savings account where you can put in tax-free money and use toward everything from doctor co-pays to dental treatments to birth control. So how do you get your hands on one of these beautiful things? There are two ways:

  1. Depending on where you bought your plan, you may be prompted to start an HSA.
  2. If you’re not prompted to start an HSA, see if you can open one at your bank. If not, open one at a bank that offers them.

What is a primary care physician?

A primary care physician, or PCP, is a doctor that you will designate on your insurance form to be your first point of call when you have a medical need. However, this doesn’t pertain to medical emergencies.

Not all health insurance plans require you to designate a primary care physician. You do not have to select a PCP if you have a PPO, EPO or POS plan. If you have an HMO plan, you will need to select a PCP, otherwise the insurance carrier will select one for you.

Why is health insurance so expensive?

Here is a breakdown on why insurance is so costly:

  • Health care is expensive. Hospital stays, surgeries, medical tests, prescription drugs….all of these things cost a ton of money. And the costs keep going up, unfortunately.
  • Insurance companies have to be solvent, meaning they need enough money in the bank to be able to financially cover every person who has purchased a plan through their company.
  • Insurance companies have to give advanced payment for your preventative care. A qualified health plan has to 100% cover your preventative care and wellness checks.
  • Health insurance providers have to share the cost of preexisting conditions. Due to the Affordable Care Act ruling, no one can be turned away from getting health insurance due to a pre-existing condition. This means the cost is distributed to everyone.
  • Insurance companies have to pay staff, agents and brokers. (And unfortunately, like any business, there are often inefficiencies due to overstaffing, business processes, etc.)

What is a health insurance network?

In technical speak:
A health insurance network is a list of doctors, specialists and hospitals that your health insurance provider has a relationship with. These medical professionals and establishments are contracted to offer you services at a specified rate.

In normal speak:
Doctors, specialists and hospitals can decide whether or not to partner with a health insurance provider (Aetna, Blue Cross Blue Shield, etc). If the doctor/specialist/hospital agrees to the provider’s terms, they will become part of their network.

There are four types of networks in health insurance: POS, EPO, HMO and PPO (most PPOs are going away though. Read our blog post on why). You’ll have the option to buy one of these plan networks when you apply for health insurance. Before you buy, check with either the provider or your doctors to make sure your medical team is in the network you’re interested in. Having your medical team in your network will ensure that you won’t pay out-of-network costs (i.e expensive) on medical services.

What is a qualifying event?

A qualifying event means when you can apply for insurance outside of November 1st to December 15th. You see, most of us HAVE to apply for insurance during November 1st and December 15th, otherwise known as enrollment period (these dates can change a little bit from year to year). However, outside of that time, if you have a baby, get married, lose your job- you know, big life stuff- then you may qualify to apply for insurance. Note: You have to apply for insurance within 60 days of said qualifying event.

Check out the list of qualifying events below.

  • You lost your coverage through job change, divorce, death in the family or graduation.
  • You fell off your parent’s insurance after you turned 26.
  • You had a change to income.
  • You had a change in immigration status.
  • You moved outside of your coverage area.
  • You got married. (Congrats!)
  • You had or adopted a child. (Congrats again!)

What happens if I miss Open Enrollment?

If you miss open enrollment, you’re stuck without insurance for another year.

…Unless you qualify for a qualifying event outside of open enrollment. Or you could purchase a HealthShares plan which, since it’s not health insurance, allows you to purchase year-round. Altrua HealthShares (whom we’re partnered with) is also ACA exempt, so no penalties!

Another bummer thing is that you may be subject to paying a tax penalty for not having insurance. As of 2017, the tax penalty is $695 per person OR 2.5% of your household income (whichever is higher). Unless you purchase an ACA exempt HealthShares plan like Altrua.

What is a deductible?

The deductible is the dollar amount you pay for medical costs before your carrier starts picking up the tab.

What is a co-pay?

A co-pay is a fixed dollar amount (for example, $20), set by your insurance plan, that you pay for healthcare costs, including doctors visits and prescriptions. Your plan may have different amounts for different kinds of health expenses, like primary care visits, specialist care visits or brand or generic prescriptions.

What is coinsurance?

Co-pays are different from coinsurance in that coinsurance is a fixed percentage that you’ll have to pay for medical services (ex. 20% you/ 80% insurance provider).

What does Bronze, Silver, Gold, Platinum mean?

You may notice that health insurance plans come in five different types: catastrophe, bronze, silver, gold, and platinum. The metallic tier system was created to give consumers a quick and easy way to understand what you can expect from different plans.

  • Catastrophe: A catastrophe plan is available to applicants under the age of 30, and it only covers “catastrophic” medical needs such as a car accident or cancer. In other words, you’ll have a low monthly cost, but you’ll be paying out of pocket for most of your basic medical services. This plan is good if you just want to cover worst-case scenarios.
  • Bronze: A bronze plan will cover 60% of your medical needs and expenses. Usually your monthly cost will be low, but you will have to cover the other 40% of your medical bills. This plan is good if you don’t plan on going to the doctor often.
  • Silver: A silver plan will cover 70% of your medical needs and expenses. Your monthly cost will be somewhere between low and high, but you’ll only have to pay 30% of your medical bills. This is your middle-of-the-road plan; it’s good if you go to the doctor a handful of times a year.
  • Gold: A gold plan will cover 80% of your medical needs and expenses. Because gold covers a good chunk of your bills, your monthly payment will probably be on the higher side. If you plan on going to the doctor a lot, this will be an inexpensive plan in the long run.
  • Platinum: A platinum plan is the Cadillac of insurance plans. It will cover 90% of your medical needs and expenses. Because of this, your monthly payment will be high; however, this is a smart choice is you have chronic medical needs, like cancer or heart disease.

What does out-of-pocket-max mean?

Out-of-pocket-max is the MOST you’ll end up paying for your medical bills in a single year.

For example, say you decided that you no longer want to be an investment banker and you want to fulfill your lifelong dream of being a rodeo star. Your rodeo career is going well until your horse bucks you and steps on both of your ankles. You have to get emergency surgery and stay at the hospital for a week. Your medical bill ends up being $45,000, but don’t let that end your cowboy dreams. You won’t have to pay the full $45,000. The most you will pay is your out-of-pocket max, which could range anywhere from $3,000 to $6,850. That includes your deductible amount AND any co-insurance amount you have.

The only time this may not be applicable is if you receive medical service out of your plan network.

What is a health advocate (or Medical Bill Saver)?

At KindHealth, we’ve spent years building an algorithm that crunches more than 130 million pieces of data to find the perfect health insurance plan for your individual needs. But a great plan is just the beginning. That’s why we’ve assembled a team of Personal Health Advocates to help our customers navigate the healthcare maze. Appointments, networks, billing — everything. Our Personal Health Advocates and Medical Bill Savers are highly trained registered nurses who can answer questions about symptoms, direct you to a specialist in your network, or explain your bills. Advocates are available 24/7, and the information they provide is always confidential. You might be wondering, how much do we charge for this? Absolutely nothing. What can we say? We believe that every customer has a right to healthcare that works for them.

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