With the Affordable Care Act, although getting a health insurance plan has become easier, the decision about which one to pick can be difficult. However, it’s important to thoroughly research the different options available as they can help provide significant savings on your out-of-pocket medical expenses.
Here’s a glossary of 12 common health insurance terms you need to know before you decide on a plan that best suits your requirements:
Affordable Care Act
This is a major health care reform legislation, having multiple provisions, that became law in 2010.
Health Insurance Marketplace
These exist at federal and state levels to allow you to compare multiple health insurance plans with varying coverage options and purchase the one that’s best for you.
Cobra
The Consolidated Omnibus Budget Reconciliation Act of 1985, is a federal law allowing you to continue using the health insurance plan provided by your employer, when you leave your job or reduce your hours, for 18 months or more.
Copayments
These are a fixed, modest amount (usually $15 or $20) that you must pay out-of-pocket every time you claim health insurance for a health care service.
Deductibles
This is the amount of money that you must first pay out-of-pocket before your health insurance plan starts contributing to your payments.
Dependent Coverage
Under the Affordable Care Act, insurance plans are mandated to cover family members until the age of 26. In some plans, this is further extended.
Drug Formulary
This is a comprehensive list of all the medications that are covered by your health insurance.
Essential Health Benefits
These include pediatric care, hospitalization, maternity, and newborn care, and care for mental health and substance use disorders and are part of a comprehensive package of services that are mandated to be covered by your health insurance plan.
Medicaid Expansion
Medicaid is government-funded health coverage for people with disabilities or low incomes that fulfill the required eligibility criteria.
Premium
This is the amount that must be paid to your health insurance provider to continue your medical coverage, on a monthly, quarterly, or yearly basis.
Special Enrollment
Regardless of enrollment dates, special enrollment is available when specific work or life events occur. These include when you, your spouse, or your dependents lose other coverage; when you marry; or when you have a child.
Tax Credit Premiums
These include tax breaks through the marketplace that can help you afford health coverage.