More than a decade after the passage of the Affordable Care Act, health insurance remains one of the most confusing things Americans need to buy. That’s due in part to the fact that there are more than 900 health insurance companies out there, each one claiming to be the best.
By instituting standardized health insurance policies, the ACA was intended to help people make more informed decisions and extend access to those who were typically overlooked. While it has succeeded in gaining millions of enrollments, it has not necessarily made the choice of health insurance easier.
When people purchase a health insurance policy, they often remain confused about what they are getting.
A big part of the reason is because health insurance has its own set of very technical terminology. When you can’t decode all the different terms in use, it becomes much harder to decipher where coverage begins and ends. That can put people in peril if they learn too late that their coverage is not what they thought.
Crucial Health Insurance Terms To Remember When You Compare Policies
Whether on the marketplace or off, it is always important to compare the health insurance policies on offer before you choose one. Even the “metal tier” insurance policies offered under the ACA marketplace are not all the same. You might overlook crucial differences if you assume all “Silver” plans are identical, for example.
Going off the marketplace gives you more choice and freedom, but it is just as vital to get informed.
Let’s look at some of the most confusing health insurance terminology and what it all really means:
The copayment is the amount you pay “out of pocket” at the point of service when you get covered healthcare or purchase prescription medication. Also known as the copay, it is a set dollar amount based on the type of procedure or medication you are about to receive. Without paying the copay, you can’t get care.
The deductible is the amount that you pay for covered healthcare services before your insurance plan begins to pay any benefits. Each time you pay for a service, you are contributing to the deductible until it is met for the year and you begin to receive all your plan benefits. The deductible “resets” at the end of the year.
The premium is the ongoing amount that you pay every month to keep your health insurance current. You pay for the premium whether or not you actually use any health insurance services, including before you have met your deductible for the year. The policy will be terminated if the premium goes unpaid.
4. Annual Limit And Lifetime Limit
The annual and lifetime limits describe limits in your total health insurance benefits for a particular treatment or issue. Annual limits can be enacted for a specific service or they can apply to all healthcare services that would otherwise be covered under your existing insurance policy.
A lifetime limit defines a cap on the total lifetime benefits you may get from your insurer, usually for a specific health condition. For example, a policy may have a $1 million total lifetime cap or it might have specific limitations, such as a $250,000 maximum for charges related to organ transplants.
5. Network And Out-of-Network
Each health insurance plan has its own group of contracted healthcare providers.
These agreements can cover groups or individuals: A whole clinic and all of its doctors may be “in network,” and so can an individual doctor who is not affiliated with a larger group. In general, you need to select physicians in your network in order to get benefits. There may or may not be benefits for out-of-network physicians.
“Out-of-network” describes any healthcare practitioner or group who is not contracted to operate under your health insurance. This can become a problem when you need to see specialists who may be located outside your usual coverage area. Many health insurance plans have no out-of-network benefits at all.
“Provider” is the technical term for healthcare practitioners or groups: From individual physicians to clinics, medical laboratories, and hospitals. No matter what kind of treatment you seek out, remember that you will always see healthcare professionals and brands called “providers” on your policy documentation.
7. Primary Care Physician (PCP)
Your primary care physician is your first point of contact whenever you have an undiagnosed health concern. He or she usually studies an area of healthcare like family medicine or internal medicine. PCPs may also have a background in pediatrics or geriatrics depending on the age of the patients they see most frequently.
A primary care physician holds a doctorate degree and has all the medical training of any doctor, but is not a “specialist” per se. A PCP’s main role is to serve as a contact person, diagnose new issues, help you with the management of chronic conditions, and refer you to specialists according to your medical needs.
In effect, your primary care physician is “your doctor” whenever you fill out paperwork related to health.
In contrast to primary care physician, a specialist is a type of doctor who has deep training in one specific aspect of healthcare. Specialists may focus on the brain (neurologists), the heart (cardiologists), and many other areas. They are able to perform procedures, including diagnostic procedures, that other physicians cannot.
While there are some exceptions, most health insurance companies require you to get a referral from your primary care physician before you schedule an appointment with a specialist. A referral is simply a written affirmation that, in the primary care physician’s best judgment, the visit is necessary.
Sometimes, preauthorization may be required before seeing a specialist.
Preauthorization takes place when your primary care physician is required to notify your insurance in advance of a medical procedure or plan of treatment. Primary care physicians may be bound to notify insurers before prescribing particular medications, durable medical equipment, or diagnostic tests.
The preauthorization process gives the insurer the power to decide what is and is not “medically necessary.” If your insurer overrules your primary care physician’s judgment, you may receive limited or no benefits for the procedure in question. You can choose to pay out of pocket or appeal the decision.
10. Open Enrollment (Affordable Care Act)
Open enrollment is the period of time every year where you can choose to purchase ACA marketplace health insurance coverage that comes into force the following year. In the past, the open enrollment period has lasted about 45 days and takes place in the last quarter of each year.
Choice Health Insurance Brokers can help you get the health insurance coverage you need, even outside of open enrollment. Our experts understand health insurance. With us, you compare health insurance from the best insurers. Unlike insurance agents, we have no sales quotas and no preference for any one company.
To find out more or get started, contact us today!