Understandably, most people are uninterested in the subject of health insurance. It contains terms that you would never use in everyday conversation. Understandably, you’d prefer to avoid the whole thing. However, health insurance has an impact on your health, your family, and your finances. Understanding how it works and what you require can mean the difference between costly errors and peace of mind. Here are 21 terms to help you understand and make the most of your plan.
- Affordable Care Act
This is the healthcare reform legislation signed into law by President Obama in 2010. It is also well known as the Patient Protection and Affordable Care Act, or “Obamacare.” Some of the law’s provisions, such as universal coverage for preventive services, are already in effect. Others will be released in the coming years.
- Cancellations
Previously, some insurance companies would cancel health coverage if you made an error on your application. Companies are no longer permitted to do so under the ACA. However, they may cancel your coverage if you falsified or omitted information on your application or if you couldn’t pay your premium on time.
- COBRA
The Consolidated Omnibus Budget Reconciliation Act is abbreviated as COBRA. It is a federal law that gives you the right to continue with your employer’s group insurance plan for a limited time, after you leave a job, either voluntarily or unwillingly, or when you minimize your hours, such as from full-time to part-time.
- Copayments
A set amount of money (typically $15 or $20) that you must pay out of pocket for a healthcare service.
- Deductible
The amount of money you must pay for medical care out of pocket before your health insurance plan takes overpayments. Usually calculated annually, and the higher your deductible, the lower your monthly premium.
- Dependent coverage
Many insurance policies cover the policyholder’s family members as well. Dependent coverage for children must be available under the Affordable Care Act until an adult child reaches 26.
- Drug formulary
this is A list of every medication covered by your health insurance policy.
- Essential health benefits
some health plans for individuals and small groups are required by the Affordable Care Act to provide a comprehensive package of services and items. Pediatric care, hospitalization, maternity, and newborn care, and mental health treatments are essential health benefits. This Affordable Care Act provision went into effect in 2014.
- Grandfathered health plans
Purchased group or individual health plans on or before March 23, 2010. but most of the provisions of the Affordable Care Act do not apply to these plans.
- Health care plan categories
The insurance marketplace divides health care plans into four categories: bronze, silver, gold, and platinum. The plans differ based on how much you pay compared to how much the plan pays. Platinum plans provide the most coverage but charge the most money. Bronze plans have lower premiums but offer less coverage overall.
