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Understanding the most common industry terminology will help you better navigate the coming changes, and figure out how they affect you and your family.
Here are a few key terms you should know:
A network of physicians, hospitals and other healthcare professionals who coordinate services to improve the quality of patient care while also limiting unnecessary spending. A patient in an ACO may spend less time filling out medical history paperwork and have fewer repeated medical tests because the doctors and hospitals have adopted ways of sharing information and coordinating care. Cedars-Sinai is an approved ACO in the Medicare Shared Savings Program.
The comprehensive healthcare reform law enacted in March 2010, seeks to increase the quality and affordability of health insurance, while also lowering the number of uninsured individuals through federal programs or state "exchanges." Among the law's key provisions, insurance companies are required to cover all applicants within minimum standards regardless of pre-existing conditions or sex; and to provide care for dependent children up to 26 years of age. The ACA also establishes certain mechanisms to increase competition, regulation and incentives to improve the delivery of healthcare. Click here to read the law. See also: Obamacare.
A patient's share of the costs of a covered healthcare service, usually calculated as a percentage together with a deductible. For example, under a health plan that requires a deductible and 20 percent coinsurance, a $100 doctor's visit would require a patient who has met the deductible to pay $20, with the insurer paying the remaining $80.
Usually a fixed amount of money a patient has to pay each time when using a service covered by an insurance plan. Copays tend to be smaller dollar amounts, applied on a
The total amount and type of insurance carried.
A fixed dollar amount a patient must pay out-of-pocket before insurance will cover the remaining eligible expenses. Depending on the insurance plan, deductibles can range from zero to thousands of dollars. Generally, the higher the deductible, the lower the premium.
A child or other individual for whom a parent, relative or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, benefit plans that provide coverage for dependents must provide coverage for adult dependent children to age 26. This applies to all group health plans and issuers of group or individual insurance, including fully insured and self-funded plans.
Essential Health Benefits
A set of benefits that must be covered in individual and small group plans starting in 2014. Includes services within the following categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
A term sometimes used to refer to the Health Insurance Marketplace. In some states the exchange is run by the state — California's is called "Covered California" — and in other states it is run by the federal government. For more, see Health Insurance Marketplace.
A more restrictive type of preferred provider organization (PPO) plan under which patients must use providers from the specified network of physicians and hospitals for care to be covered by their insurance. Care received from non-network providers is not covered except in emergency situations.
As used in connection with the Affordable Care Act, this is a group health plan that was created — or an individual health insurance policy that was purchased — on or before March 23, 2010. Grandfathered plans are exempted from many changes required under the Affordable Care Act.
A requirement that health plans must permit you to enroll regardless of health status, age, gender or other factors that might predict the use of health services.
A contract that requires your health insurer to pay some or all of your healthcare costs in exchange for a premium.
A resource where individuals, families and small businesses can learn about their health coverage options, choose a plan and enroll in coverage. In California, it is called Covered California.
A phrase that refers to the Affordable Care Act (or Obamacare), the comprehensive healthcare reform law enacted in March 2010, as well as supporting state legislation.
California's Medicaid program that pays for a variety of medical services for children and adults with limited income and resources. Medi-Cal is jointly administered by the California Department of Health Care Services and the Centers for Medicare and Medicaid Services, with many services run at the county level.
A federal health insurance program for people age 65 or older and people with disabilities.
Medical underwriting is a process used by health insurance companies where they review your age, sex and health history to decide whether to offer individuals coverage, at what price and with what exclusions and limits. Each company has its own guidelines, and prior to Jan. 1, 2014, may deny coverage or charge higher premiums based on this risk analysis. As of Jan. 1, 2014, individual health insurance providers will no longer be legally permitted to refuse coverage or charge higher premiums due to such analysis.
The facilities, providers and suppliers with which a health insurer or plan contracts to provide healthcare services.
An informal term for the Affordable Care Act, so named for U.S. President Barack Obama, who promoted it.
The period of time during which eligible individuals can enroll in a health plan. For 2014, the open enrollment period is Oct. 1, 2013, through March 31, 2014. Individuals also may qualify for special enrollment periods as a result of certain major life changes, such as job loss, marriage or birth of a child.
Healthcare providers who do not contract with that patient's health insurance or plan. Out-of-network copayments and coinsurance usually are more expensive than those for in-network providers.
Expenses for medical care that are not reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance and copayments for covered services. They also include costs for services that are not covered by the insurance plan.
Play or Pay
The Affordable Care Act requires business owners with 50 or more full-time employees to make a commitment in 2015: They can "play" by providing affordable health benefits to employees who work an average of 30 or more hours per week in a month, or "pay" penalties for not offering those benefits.
PPO or Preferred Provider Organization
A type of health insurance plan that contracts with doctors and hospitals to create a network of participating healthcare providers. You can receive care from doctors and hospitals outside of the network for an additional cost.
Any physical or mental medical condition that you have before enrolling in a new health insurance policy.
The amount that you or your employer pays to your health insurance company for coverage.
Routine healthcare that includes screenings, check-ups and patient counseling to prevent illnesses, disease or other health problems.
The company that issues an insurance policy and assumes the risks associated with the insured.
Financial assistance provided by the government to eligible individuals and families to help they pay for health insurance coverage.
Summary of Benefits or Coverage
An easy-to-read summary that lets a person make apples-to-apples comparisons of costs and coverage between health plans.
An in-network facility that requires a higher level of co-pay from the insured patient compared to a Tier 1 facility.