Ways to Save on Health Insurance
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Agents (Health Insurance Agents)
A health insurance agent’s job is to help an individual or families select a health insurance policy that fits their very personal health coverage needs.
There are two things a person must do in order to become a health insurance agent:
Become licensed to sell health insurance, which requires them to study for and pass a state exam. Once licensed, the agent has to:
- Receive training from any insurance company that wants that agent to sell their products.
- Agent can work for one insurance company, selling only that company’s plans, or they can work for broker who represents multiple insurance companies.
A year of benefits coverage under an individual health insurance plan. The benefit year for plans bought inside or outside the Marketplace begins January 1 of each year and ends December 31 of the same year. Your coverage ends December 31 even if your coverage started after January 1. Any changes to benefits or rates to a health insurance plan are made at the beginning of the calendar year.
Catastrophic Health Plan
Health plans that meet all of the requirements applicable to other Qualified Health Plans (QHPs) but that don't cover any benefits other than 3 primary care visits per year before the plan's deductible is met. The premium amount you pay each month for health care is generally lower than for other QHPs, but the out-of-pocket costs for deductibles, copayments, and coinsurance are generally higher. To qualify for a catastrophic plan, you must be under 30 years old OR get a "hardship exemption" because the Marketplace determined that you’re unable to afford health coverage.
When employees lose their jobs, they are able to continue their employer-sponsored coverage for up to 18 months through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
A method of cost-sharing in health insurance plans in which the plan member is required to pay a defined percentage of their medical costs after the deductible has been met.
A fixed dollar amount paid by an individual at the time of receiving a covered health care service from a participating provider. The required fee varies by the service provided and by the health plan.
A feature of health plans in which consumers are responsible for health care costs up to a specified dollar amount. After the deductible has been paid, the health insurance plan begins to pay for health care services.
Essential Health Benefits
A package of benefits set by the Secretary of Health and Human Services that insurers will be required to offer under the exchanges.
Federal Poverty Level (FPL)
The federal government’s working definition of poverty that is used as the reference point to determine the number of people with income below poverty and the income standard for eligibility for public programs. The federal government uses two different definitions of poverty. The U.S. Census poverty threshold is used as the basis for official poverty population statistics, such as the percentage of people living in poverty. The poverty guidelines, released by the U.S. Department of Health and Human Services (HHS), are used to determine eligibility for public programs and subsidies. For 2008, the Census weighted average poverty threshold for a family of four was $22,025 and HHS poverty guideline was $21,200.
Group Health Insurance
Health insurance that is offered to a group of people, such as employees of a company. The majority of Americans have group health insurance through their employer or their spouse’s employer.
Requires insurers to offer and renew coverage, without regard to health status, use of services, or pre-existing conditions. This requirement ensures that no one will be denied coverage for any reason.
Health Savings Account (HSA)
A tax-exempt savings account that can be used to pay for current or future qualified medical expenses. Employers may make HSAs available to their employees or individuals can obtain HSAs from most financial institutions. In order to open an HSA, an individual must have health coverage under an HSA-qualified highdeductible health plan. These HSA-qualified high-deductible health plans must have deductibles of at least $1,150 for an individual and $2,300 for a family in 2009.
High-Deductible Health Plan
Health insurance plans that have higher deductibles (the amount of health care costs that must be paid for by the consumer before the insurance plan begins to pay for services), but lower premiums than traditional plans. Qualified high-deductible plans that may be combined with a health savings account must have a deductible of at least $1,150 for single coverage and $2,300 for family coverage in 2009.
HMO (Health Maintenance Organization)
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
Individual Insurance Market
The market where individuals who do not have group (usually employer-based) coverage purchase private health insurance. This market is also referred to as the non-group market.
A requirement that all individuals obtain health insurance.
Services that include those needed by people to live independently in the community, such as home health and personal care, as well as services provided in institutional settings such as nursing homes.
Major Medical Insurance
A major medical health insurance plan is a type of medical insurance plan that meets all of the minimum essential benefit standards of the Affordable Care Act (ACA or “Obamacare”),while providing benefits for a broad range of inpatient and outpatient health-care services. It’s important for you to understand that not all major medical health insurance plans can be purchased with a premium tax credit, but enrollment in a major medical health insurance plan does protect you from tax penalties for being uninsured.
Enacted in 1965 under Title XIX of the Social Security Act, Medicaid is a federal entitlement program that provides health and long-term care coverage to certain categories of low-income Americans. States design their own Medicaid programs within broad federal guidelines. Medicaid plays a key role in the U.S. health care system, filling large gaps in the health insurance system, financing long-term care coverage, and helping to sustain the safety-net providers that serve the uninsured. Learn more with this primer on Medicaid.
Plans in the Marketplace are primarily separated into 4 health plan categories — Bronze, Silver, Gold, or Platinum — based on the percentage the plan pays of the average overall cost of providing essential health benefits to members. The plan category you choose affects the total amount you'll likely spend for essential health benefits during the year. The percentages the plans will spend, on average, are 60% (Bronze), 70% (Silver), 80% (Gold), and 90% (Platinum). This isn't the same as coinsurance, in which you pay a specific percentage of the cost of a specific service.
“Off Exchange” refers to buying coverage through the private market without a premium tax credit or cost-sharing subsidy. Typically, if you are buying “off the exchange,” your income is over the 400% Federal Poverty Level or you have access to affordable group coverage through an employer or through a spouse’s employer.
“On Exchange” refers to buying an Obamacare plan that will be subsidized through premiums credits and/or cost sharing reductions. If you are buying “on the exchange,” you are in the 100-400% of the Federal Poverty Limit and have do not have access to group coverage through an employer or a spouse’s employer.
Health care costs, such as deductibles, co-payments, and co-insurance that are not covered by insurance. Out-of-pocket costs do not include premium costs.
A yearly cap on the amount of money individuals are required to pay out-of-pocket for health care costs, excluding the premium cost.
POS (Point of Service) Plans
A type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans also require you to get a referral from your primary care doctor in order to see a specialist.
PPO (Preferred Provider Organization) Plans
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
A pre-existing condition is a health problem that existed or was treated before the effective date of your health insurance coverage. Most health insurance contracts have a pre-existing condition clause that describes how and when the health insurance company will cover medical expenses related to a pre-existing condition. However, Obamacare prohibits pre-existing condition exclusions for all plans beginning January 2014. In other words, your insurance coverage options or premiums are no longer affected by your pre-existing conditions.
The amount paid, often on a monthly basis, for health insurance. The cost of the premium may be shared between employers or government purchasers and individuals.
A fixed amount of money or a designated percentage of the premium cost that is provided to help people purchase health coverage. Premium subsidies are usually provided on a sliding scale based on an individual’s or family’s income.
Qualifying Health Plan
Under the Affordable Care Act, starting in 2014, an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. All of the major medical plans available through the Insurance Marketplace meet the requirements to be considered qualified health plans.
Qualifying Life Event (QLE)
A change in your life that can make you eligible for a Special Enrollment Period to enroll in health coverage. Examples of qualifying life events are moving to a new state, certain changes in your income, and changes in your family size (for example, if you marry, divorce, or have a baby).
Short-Term Health Insurance
Short-term or temporary health insurance provides health coverage for a limited period of time. Short term health insurance or temporary health insurance won’t help you to avoid the ObamaCare fee for not having coverage. However, Short-Term health insurance can be a smart and inexpensive temporary solution for those in between coverage options, those traveling out-of-network, and those looking to fill gaps in coverage.
Special Enrollment Period (SPE)
A time outside of the open enrollment period during which you and your family have a right to sign up for health coverage. In the Marketplace, you qualify for a special enrollment period 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage. Job-based plans must provide a special enrollment period of 30 days.
Health coverage that's obtained through financial assistance from programs to help people with low and middle incomes.
A tax credit is an amount that a person/family can subtract from the amount of income tax that they owe. If a tax credit is refundable, the taxpayer can receive a payment from the government to the extent that the amount of the credit is greater than the amount of tax they would otherwise owe.
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