Aseloole. Health insurance has its own language, and the Affordable Care Act has added new terms to its vocabulary and changed the definitions of some old ones:
Annual limit: A yearly cap on the dollar amount or types of benefits. Above the cap, you pay the full cost of care for the rest of the year. The health reform law now prohibits most employer and individual plans from imposing a yearly cap below $750,000. The cap will rise to $1.25 million as of September 23 of this year.
Catastrophic coverage: Pays for care above a high deductible (below), generally several thousand dollars or more.Most services below the deductible are not covered, but the law requires policies issued after September 23, 2010, to pay for certain preventive services, such as immunizations and screening for high blood pressure and depression.
Coinsurance: How much you have to pay for care after meeting your deductible (below). A plan may pay 75 or 80 percent of the bill for services. The remainder is your coinsurance.
Copay: A set fee you pay each time you receive care—$25 whenever you visit the doctor, for example. Your plan pays the rest.
Deductible: How much you have to pay out of pocket before coverage kicks in.
Doughnut hole: A coverage gap in Medicare Part D, the federal prescription drug program for adults age 65 and older. The program pays 75 percent of drug costs up to the doughnut hole—the point at which the total paid by the enrollee and the program reaches $2,800. The enrollee must pay the next $1,750 out of pocket before program coverage resumes. As of 2011, the cost of brand-name drugs for enrollees in the doughnut hole are discounted by 50 percent.
Exclusions: Conditions and treatments and other services that a health plan or policy will not cover. They must be clearly spelled out in the plan's literature.
Fee for service: Coverage that offers total freedom in choosing healthcare providers.Generally, you or your doctor will submit a claim for services provided and get reimbursed by the insurer.
Flexible spending arrangements: Accounts set up by employees to tap during the year to pay qualified medical expenses. They reduce taxes because the funds are subtracted from earnings before they are taxed. Anything left over at the end of the year is forfeited.
Formulary: A list of the medications a policy or health plan will cover entirely or in part.
Grandfathered plan: Any plan that existed on or before March 23, 2010, when health reform became law. Such policies are exempt from some of its provisions.
Group health insurance: Coverage available through employers or "affinity groups" such as a union or student organization.
Health maintenance organization: A form of managed care in which you receive all of your care from participating providers. You usually must obtain a referral from your primary-care physician before you can see a specialist.
Health reimbursement arrangement: Accounts set up by employers to pay employees' medical expenses. Only the employer can contribute to the account.
Health savings account: A special account established by an employer or an individual to save money toward medical expenses. As with flexible spending arrangements, they reduce taxes because the funds are subtracted from earnings before they are taxed. A key difference is that any remaining balance at the end of the year rolls over to the next year.
High-deductible plan: A health plan that provides comprehensive coverage only for costly care such as expensive surgery. It features a high deductible and an annual limit on the total amount paid out by a covered individual or family. Such a plan is usually coupled with a health savings account or a health spending account.
High-risk pool: A state-run program that offers coverage for those who cannot get health insurance from another source because of serious illness.
Individual health insurance: Coverage purchased by an individual, usually directly from an insurance company.
Lifetime limit: Formerly a cap on the total amount paid out by the health insurer over the entire time you are enrolled. Above the cap, you pay the full cost of care. Lifetime limits on most benefits are now prohibited under health reform.[.....]
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