Health Insurance Terms
Premium: The amount you pay each month for your health insurance coverage.
Deductible:The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
Co-Insurance: Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) 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 met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
Co-Payment: 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.
Out of Pocket Maximum –The out of pocket maximum is the most a policyholder would have to share in costs on an annual basis. This includes any amounts paid towards deductibles, coinsurance and copays. Out of pocket maximums generally do not include the monthly premiums paid for insurance. After the out of pocket maximum has been met, the insurance company and policy will pick up 100% of all medical costs. Under the ACA, the highest the out of pocket maximum can be is $6,350 for an individual and $12,700 for a family.
Subsidies– tax credits to help reduce the monthly cost of health insurance available to families and individuals who fall between 100% and 400% of the Federal Poverty Level
Cost Sharing Reductions– For those with incomes between100% and 250% of the federal poverty level, they can also qualify for cost sharing reductions. These will reduce the deductibles, copays, and other cost sharing that would otherwise apply to covered services. The cost sharing reductions will be available through modified versions of Silver plans that are offered on the Marketplace. These plans will have lower deductibles, copays, coinsurance and out-of-pocket limits compared to regular Silver plans. Once the Marketplace determines you are eligible for cost sharing reductions, you will be able to select one of these modified Silver plans, based on your income level.