As if health insurance weren’t confusing enough, the Affordable Care Act has created a whole new set of terms and acronyms.
We don’t want you to be stumped by any of this, so here are some definitions and explanations — some old, some new — that may help you navigate the new options. At the very least, you can wow dinner-party companions with your wonky new knowledge.
■ Health-insurance exchange/health-insurance marketplace: An online health-insurance marketplace where individuals, families, and small businesses can learn about their health coverage options, compare plans on costs, benefits, and other features, choose a plan, and enroll in coverage. The exchange also provides information on programs that help people with low to moderate income and resources pay for coverage.
■ Washington Health Benefit Exchange: Washington state’s marketplace/exchange, which is creating the online storefront known as the Healthplanfinder. Unlike some states, Washington lawmakers opted to set up a state-run marketplace, rather than defer to the feds. You can qualify for reduced premiums only for plans sold inside the exchange.
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■ Washington Healthplanfinder: The online marketplace set up by Washington’s exchange where you will go to plug in your information, find out if your income qualifies you for free or reduced-cost health insurance, and get signed up.
■ Qualified Health Plan (QHP): Under the Affordable Care Act, the plans that have been certified to sell in the online exchange marketplace. These plans provide the essential health benefits, follow established limits on cost sharing (deductibles, co-payments, and out-of-pocket maximum amounts), and meet other requirements. In Washington, there are four companies selling a total of 46 individual plans in the exchange. Other individual plans will also be sold outside the exchange.
■ Metal levels: The “metal levels” are the tiers of health insurance that will be available Oct. 1 through the exchange. In Washington, bronze, silver and gold represent different ways you will pay for coverage. Bronze levels plans, for example, have smaller premiums, but will cover only 60 percent of your costs. At the gold level, the premiums are higher, but plans cover 80 percent of the costs.
■ Premium tax credits: Subsidies that will help people afford health coverage purchased through the exchange. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount.
■ Cost-sharing subsidies: Lower-income people will be eligible for a second type of subsidy to protect them from high out-of-pocket costs if they buy a silver-level plan through the exchange. The subsidies vary by income.
■ In-person assisters: In Washington, these are people connected with local public-health agencies, coalitions, regional health networks, and other community organizations who have been specially trained and certified, with the help of federal grants, to help individuals, families and small businesses determine which insurance option is best for them. They will help identify eligibility for reduced premiums, assist in completing applications and enrollment — in person, by telephone, or electronically — and help people who need tailored support because of linguistic, cultural, or disability issues.
■ Apple Health: In Washington state, Medicaid, the state-federal insurance program for low-income or disabled people, is being re-branded as “Washington Apple Health,” using the successful model the state used to create a single portal for various children’s insurance programs. The Affordable Care Act greatly expanded eligibility for Medicaid.
■ Essential health benefits: A set of health-care-service categories that must be covered by the individual and small group plans, including state Medicaid plans, to be offered both inside and outside the exchange for 2014 coverage. These benefits include:
• Ambulatory patient services.
• Emergency services.
• Maternity and newborn care.
• Mental health and treatment of substance abuse disorders, including behavioral health treatment.
• Prescription drugs.
• Rehabilitative and habilitative services and devices.
• Laboratory services.
• Preventive and wellness services and chronic disease management.
• Pediatric services, including oral and vision care.
■ SHOP plans: Small Business Health Options Program. A program to help businesses with 50 or fewer employees buy health insurance through the exchange. This year, only one insurer in Washington is offering such plans, and only in Clark and Cowlitz counties.
■ MAGI: This sweet-sounding acronym stands for Modified Adjusted Gross Income. And, yes, it’s an income-tax thing. Your MAGI is the figure used to determine eligibility for lower costs for commercial plans in the exchange, Medicaid and CHIP. Generally, your MAGI is your adjusted gross income (AGI) plus any tax-exempt Social Security, interest, or foreign income you have.
■ FPL: A measure of income level issued annually by the federal Department of Health and Human Services and used to determine your eligibility for health-insurance subsidies. People with incomes below 138 percent of poverty (about $15,400 for an individual; $31,809 for a family in 2013) qualify for Medicaid/Apple Health. Those with incomes below 400 percent of FPL (
$45,960 for an individual, $94,200 for a family in 2013) qualify for reduced premiums.
■ Household income: Total income of the taxpayer(s) and any individuals who are claimed as dependents on one federal income-tax return. A tax household may include a spouse and/or dependents.
■ Subsidy or tax credit: Financial assistance to help people with low and middle incomes afford the premiums for health-insurance plans offered inside the exchange marketplace. The amount of the subsidy is based on the second-lowest premium for a silver-level plan, no matter what plan you actually choose.
■ Cost-sharing reduction: A second type of discount that lowers the amount you have to pay out-of-pocket for deductibles, coinsurance, and co-payments, available to people whose income is below a certain level.
■ Copayment: A fixed amount (for example, $15) you pay for a covered health-care service, usually when you get the service. The amount can vary by the type of covered health care service.
■ Deductible: The fixed amount you must pay in a calendar or contract year for certain health-care services before your health insurance begins to pay.
■ Coinsurance: Your share of the costs of a covered health-care service, calculated as a percent (in exchange plans, between 20 and 40 percent) of the allowed amount for the service. You pay coinsurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve already paid off your deductible (which is likely to be hundreds or thousands of dollars), your coinsurance payment of 20 percent would be $20. The health insurance or plan pays the rest of the allowed amount.
■ Cost sharing: The share of costs for services covered by your insurance that you pay out of your own pocket. Cost sharing generally includes deductibles, coinsurance, and co-payments, or similar charges, but it doesn’t include premiums, your share of billing amounts for providers that are out of your insurer’s network, or the cost of non-covered services. In Medicaid and CHIP programs, cost sharing includes premiums.
■ Out-of-pocket costs: Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and co-payments for covered services plus all costs for services that aren’t covered — but not your costs for premiums.
■ MOOP: Maximum out-of-pocket or out-of-pocket cap. This the total amount you’ll have to pay, in addition to premiums, if you get sick. The cap applies to the year you’re covered. With the exception of some employer plans, where the requirement has been delayed for a year, in 2014, all health plans must kick in to pay your expenses when your out-of-pocket costs, including deductibles, coinsurance, and co-payments, reach $6,350 for an individual and $12,700 for a family.
■ No yearly or lifetime limits: Health plans in the exchange marketplace can’t put dollar limits on how much they will spend each year or over your lifetime to cover essential health benefits. After you’ve reached your out-of-pocket maximum, your insurance company must pay 100 percent of your costs for essential health benefits.
■ 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 three 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, co-payments, 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.
■ SBC: It stands for Summary of Benefits and Coverage — the plain-language summary of your benefits and coverage mandated by the ACA. Every insurer must supply this document and a uniform glossary of common health terms to members and prospective members during open enrollment and/or upon request.
(Sources: Washington Office of the Insurance Commissioner, healthcare.gov, Washington Health Benefit exchange, Health Care Authority, Internal Revenue Service, Kaiser Family Foundation)
Carol M. Ostrom: email@example.com or 206-464-2249. On Twitter @costrom