Know your health care insurance terminology

(Photo: Associated Press)

 

 

Stepping into the insurance world can be daunting. These 14 words can make those first steps easier.
Affordable Care Act:The 2010 federal health reform law has been generally upheld by the U.S. Supreme Court. Its centerpiece is that everyone must purchase health insurance unless they fall into a narrow area of exemptions. Those who don't purchase insurance face penalties. The insurance can be purchased online at a reduced rate on state exchanges. In a lingering challenge to the controversial law, the U.S. Supreme Court must still decide whether the federal government can provide subsidies to reduce the cost of coverage in states that chose not to operate their own state exchanges. In those states, the federal government is running them. That includes Michigan.
Catastrophic plans:These plans offer low premiums, but have very high out-of-pocket costs for co-pays and deductibles. They're available only to consumers under 30 or consumers with a "hardship exemption" — those whom the marketplace has determined are unable to afford other health coverage. Though they also cover some preventive care, the goal of these plans is to guard against worst-case scenarios.
Co-payment: A fixed cost — for example, $20 — that consumers pay for certain health services, such as a doctor's visit.
Coinsurance:A percentage of the cost — for example, 20% — that consumers pay for certain health services, such as a doctor's visit.
Deductible: The amount a consumer pays for health insurance before the insurer begins to pay. For example, if a plan's deductible is $1,000, the consumer pays that amount first before coverage kicks in. The deductible may not apply to all services.
Healthy Michigan: The state's new Medicaid program. Generally, a family is eligible if it has an income at or below 133% the federal poverty limit. As it stands now, that's about $15,521 for an individual or $31,721 for a family of four.
King v. Burwell: The case before the U.S. Supreme Court that is challenging tax credits used to reduce premiums in states such as Michigan — those in which the state declined to run its own state marketplace and, by default, turned it over to the federal government's www.healthcare.gov web site.
Metal levels:Five categories of insurance plans — platinum, gold, silver, bronze and catastrophic — that indicate roughly the percentage of cost the consumer will have to cover. For example, a platinum plan generally has higher monthly premiums but covers about 90% of the cost of care, while a bronze plan is less costly each month but consumers will pay more when they seek care.
Michigan health insurance marketplace: The state's exchange. Michigan lawmakers decided against the state running its own operation, so Michigan is one of 36 states where consumers access plans through the federally facilitated www.healthcare.gov.
Narrow networks: These plans are being offered more frequently across the U.S. and in Michigan. They offer lower monthly premiums that can save consumers thousands of dollars. The trade-off: The consumer pays full price for any care provided outside the network (except in emergencies).
Out-of-pocket costs: The consumer's share of health costs, including deductibles, coinsurance and co-payments for covered services, in addition to costs for services that aren't covered.
Small Business Health Options (SHOP): The marketplace that helps small businesses and nonprofit organizations — those with 50 or fewer full-time equivalent employees (FTEs) — provide health coverage to employees. Businesses with fewer than 25 employees may qualify for tax credits. Firms with 100 or fewer FTEs can use the SHOP in 2016.
Small Business Health Care Tax Credits:Federal financial assistance that reduces costs for small businesses — those with fewer than 25 full-time employees — in providing coverage to employees if the average employee salary is about $50,000 or less. Another qualifier: The employer must pay at least 50% of the full-time employees' premiums. A tax credit calculator is available at www.healthcare.gov.
Premium: The cost for a health plan. It's usually paid by the consumer or employer monthly or quarterly. It does not count toward meeting a deductible. (http://www.freep.com)