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Health Insurance 101—What All Those Terms Really Mean

Health Insurance 101—What All Those Terms Really Mean

by Mary Cortez - October 06, 2014

As we work through the health care insurance maze, some of us are entering a world which has been expanding without us. There are terms and conditions and even though we WANT health insurance and NEED health insurance we are uncertain what each term may mean and how it applies to our situation.

I have compiled a list of several terms that are used in health insurance and will attempt to explain each term. As a consumer, feel free to ask your agent or representative to help you feel comfortable with the product you are choosing. After all, it is YOUR care at stake in the situation.

Carrier: The company that holds the risk for your coverage. This is the insurance company. i.e. Aetna, Blue Cross, Scott & White, etc.

Coinsurance: After the deductible is met, the coinsurance is the amount you are responsible for until the out of pocket expense is met. This is usually stated in a percentage amount (i.e. 20% coinsurance would mean the member is responsible for 20% of the allowable).

Copay: The amount you pay each time you see your Primary Care Provider or Specialty Care Provider. A plan may or may not have a copay dependent upon the deductible.

Deductible: The deductible is the amount you pay on an annual basis before the plan will pay for services. Depending on the plan, the deductible may have to be satisfied before the plan pays for office visits or pharmacy services.

Effective Date: The first day you may seek services and have the services covered under the plan. Typically, this will be the first day of the month.

HMO: This type of network is usually restrictive in the providers who may be seen under the plan. Not following a referral process or seeing providers who are not in network could result in a claim denying.

Network: A listing of providers who are considered “Participating” in your plan. You may find the participating providers in the Network Directory available through the carrier.

Open Enrollment: The dates set by the government to allow for enrollment in a plan or to change plans. Currently, the open enrollment period for 2014 will end on March 31, 2014.

Out of Pocket: This is the amount you will pay before the plan will pay for all covered services at 100%.

PCP: Primary Care Physician. This provider may be a physician or mid-level and will direct your care to the appropriate Specialty Care Providers. Usually, an HMO plan requires a PCP to be chosen for each member. This provider may be a Family Practice, Internal Medicine or Pediatrician, dependent upon the needs of a member.

PPO: This type of network usually has more providers considered participating. Typically, no referrals are needed and a member may not need to choose a PCP.

Pre-Existing: If you have been diagnosed with a chronic condition prior to electing health insurance coverage, some plans may consider the condition to be pre-existing. Plans offered through the Affordable Care Act may not impose pre-existing condition clauses. This means you will be covered for health conditions on the first day of coverage.

Premium: The amount due to the insurance company each month to continue coverage. If the premium is not paid timely, the carrier may drop/terminate your coverage.

QLE: Qualifying Life Event. This event (birth of a child, marriage, divorce, change in employment) gives the member a chance to review and add/change their health insurance coverage. The change must be completed within 30 days of the life event.

SCP: Specialty Care Provider. This provider is typically seen for conditions that your PCP does not handle. This may include orthopedics, urology, cardiology, etc. In an HMO plan, the member typically needs a referral from a PCP to see a SCP.

Subsidy: The amount paid on your behalf by the government. The amount of the subsidy will depend upon the household income and whether your state of residence expanded the Medicaid Program. To date, Texas has not expanded Medicaid.

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