What You Should Know
- The 2022 open enrollment for health insurance runs from Monday, November 1, 2021, through Saturday, January 15, 2022
- If you enroll by December 15, 2021, your coverage will begin on January 1, 2022
- Insurers often offer four different levels of health insurance coverage to customers
- Shopping around and comparing plans is one of the best ways to find a plan that fits your needs and budget
Open enrollment is upon us, and many customers are enrolling in new plans or switching providers. When it comes to shopping for health insurance, however, many of the terms used can be confusing. If terms like allowed amount or coinsurance versus copayment have you scratching your head, don’t worry.
Our glossary goes over all the essential terms used by health insurance providers, so you can shop confidently for the plan that is best for you.
Affordable Health Care Act: Also known as Obamacare, the Affordable Health Care Act makes it easier for low-income individuals and families to get health insurance at an affordable price. Anyone who needs help paying for health insurance can apply for Obamacare, from tribal members to contractors.
Children's Health Insurance Program (CHIP): CHIP is a government and state-run program that provides insurance for children and teens who don’t have health insurance. Parents or guardians can apply on behalf of their children for child-only health insurance.
Employee Health Insurance: Many employers offer health insurance plans for their employees. While the employer chooses the group plan and benefits, it is usually best for employees to sign up for the company health insurance plan rather than buy their own insurance policy. The employer pays the majority (if not all) of the insurance premium.
Medicare: Anyone over the age of 65 who is a U.S. citizen or is eligible for social security benefits can apply for Medicare, a federal health insurance program for retirees.
Medicaid: Medicaid is a government health insurance program for low-income individuals and families.
School-Sponsored Health Insurance: Most colleges and universities require students to have health insurance to attend. Students who don’t have health insurance can purchase the health insurance offered by the school.
Veteran Insurance: Eligible veterans can apply for health insurance through the U.S. Department of Veteran Affairs.
Coverage Levels: Insurers usually offer three or more different levels of coverage, which are often labeled as metal levels: bronze, silver, gold, and platinum. While you pay more out of pocket per month for the more expensive plans, a higher level will often cover more health services than a cheaper plan.
Health Maintenance Organization (HMO): You are limited to the list of accepted providers and hospitals on your health insurance plan with an HMO in-network plan. If you go to a provider outside your health insurance network, the cost won’t be covered.
Preferred Provider Organization (PPO): With a PPO out-of-network plan, you can use whatever provider you choose, even if it’s outside of the health insurer’s list of providers. Your insurer will still provide coverage, although it might not be as much as for an in-network provider.
Short-Term Plans: Short-term health insurance plans provide coverage anywhere from a month to a year. If you are between coverages, such as between jobs, you can get short-term coverage. However, short-term plans are limited in coverage, so they are not best for the long term.
Coinsurance: This is the amount of the health care bill you are responsible for paying after your deductible has been met. For example, if you visit the doctor and receive a $100 bill and have a 20% coinsurance, you will have to pay $20 of that bill, while your insurer covers the other $80.
Copayment: After your deductible has been met, the copayment is the amount of money you must pay every time you use a health service. Some plans might have a $0 copay, meaning you don’t need to pay for standard health care visits.
Deductible: A deductible is an amount you agree to pay each year before your health insurance coverage kicks in. For example, if you have a $500 deductible and end up in the hospital with a broken arm, you must pay $500 of that medical bill before health insurance coverage pays the rest.
Flexible Spending Account (FSA): A FSA is an account that you can put tax-free money in to be applied to health care costs throughout the year. Because it’s not taxable, it can be a smart way to save money while also taking care of your health insurance costs.
Out-of-Pocket: The out-of-pocket maximum or limit is the highest amount you’ll have to pay within your plan year before insurance steps in and covers the rest of the costs.
Premium: Your monthly payment for health insurance.
Allowed Amount: This is the maximum amount a health insurer will pay for a health service.
Benefit Period: The period of time you are covered under your health insurance plan (usually 12 months).
Inpatient Services: Services where you are admitted for care, such as staying overnight after surgery.
Outpatient Services: Services where you aren’t admitted for care, such as an annual checkup or bloodwork.
Health insurance doesn’t need to be confusing. Familiarizing yourself with common terms and taking your time to compare plans and providers will help you choose the health insurance that is right for you. If you want to compare health insurers in your area, enter your ZIP code into our free health insurance comparison tool.