Deductible: How much you must kick-in for major medical care first, before your insurer pays. Feeds into the out of pocket maximum.
Co-pay: Your cost for routine services to which your deductible does not apply. Feeds into the out of pocket maximum.
Co-insurance: The percentage you must pay for care after you’ve met your deductible. When something says Deductible/Coinsurance – you don’t pay the full deductible up front first. Those costs feed into your deductible. Once it’s met, whether all at once or a little at a time, then insurance kicks in. Feeds into the Out of Pocket maximum.
Out-of-pocket maximum: The absolute max you’ll pay annually. Your out-of-pocket maximum is an important feature of your health plan because it limits the total amount you pay each calendar year for healthcare including co-pays, deductibles, and co-insurance. If your policy carries a $5000 out-of-pocket maximum and you get sick and require a lot of healthcare services, the most you will pay in a year is $5000. After that, insurance picks up the rest of the tab.
In or Out of Network: Doctors and hospitals choose and contract to work with different insurance carriers. If there is a contract between the two, then it’s IN network. No contact means out of network. Each category has its own deductible and OOP max. Try to stay in network.
On or Off Exchange: “ON” means you bought your policy through the government website and receive a subsidy. “OFF” means you bought it direct through a broker or carrier and do not receive a subsidy.
Pharmacy: Tiers 1 – 5. Tier 1 is generic (cheapest). Tier 2 is brand preferred. Tier 3 is brand. Tier 4 – 5 are specialty.
Some plans have a pharmacy deductible. All pharmacy costs feed into the out of pocket maximum.
Premium: The monthly fee for your insurance. Does not feed into the out of pocket maximum.
High Deductible Health plans High deductible health plan. Synonymous with CDHP Consumer driven health plan. The individual pays for services out of pocket until a deductible is met. Then cover kicks. These are used to establish a Health Savings Account.
H S A – Health Savings Account allows you to save and take a tax credit the following year on tax return. Whatever contributions you make to the savings account, you get to reduce your taxes. There are annual limits on the individual and family contributions. “A savings account used in conjunction with a high-deductible health insurance policy that allows users to save money tax-free against medical expenses”
EOB – Explanation of benefits. This usually looks like a bill but it explains what services were provided and how they are paid.
Networks – Providers choose the type of network they want to participate in. Within each network there are traditional copay plans as well as the high deductible plans. Money is saved using an HMO provider. Depending on where you live you may have a very broad HMO network available to you.
- PPO – Preferred provider organization (broadest network)
- HMO – Health Maintenance Organization
POS – Point of Service (about 98% of PPO network) - EPO – Exclusive Provider Organization