Health Insurance Dictionary

Actuarial value refers to the amount of your medical bills your insurance pays compared to the amount you pay. You may see this phrase when you start looking at insurance plans and how they compare with one another.

For example, if you have a health insurance plan with an actuarial value of 70 percent and you have a $100 doctor’s bill, the insurance company will pay $70 and you will be responsible for paying the remaining $30. Plans with a higher actuarial value will cost more every month in premium, but you will pay a smaller percentage of your actual health care costs.

All health insurance plans are ranked by actuarial value and described as platinum, gold, silver or bronze. Platinum plans have an actuarial value of 90 percent; gold has a value of 80 percent; silver is 70 percent and bronze is 60 percent. Except in unique circumstances it is not possible to buy health insurance that pays less than 60 percent of medical spending.

Coinsurance is 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 after you have paid any deductibles you owe and after you have paid any co-pays.

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-pay is a set dollar amount you pay for a covered health care service. The amount you pay can vary by the type of service (for example, an office visit or seeing a specialist).

A co-pay is usually required at the time of service. So, if you have a $15 co-pay for every doctor’s office visit, for example, you’ll need to pay $15 to the doctor the day you visit.

Out-of-pocket maximum. Federal law caps the amount of money any person or family must pay in a single year on medical costs. This is called your “out-of-pocket maximum.” You might see it written as “MAX OOP” in some insurance documents. If you have insurance just for yourself, your out-of-pocket maximum cannot be more than $7,900 in 2019. If your insurance is for yourself and your family, your out-of-pocket cannot be more than $15,800 in 2019.

Cost-sharing is a way of sharing the cost of a service between the insurance company and the customer. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services.

Cost sharing in Medicaid and CHIP also includes premiums.

You may hear the term “cost sharing reductions.” This is a federal subsidy distributed as discounts that help reduce out of pocket cost for healthcare expenses. More about these discounts can be found on our Lowering Your Costs page.

A deductible is the amount of money you’ll need to pay before your insurance begins to pay.

For example, if you have a $2,000 deductible, you will pay for the first $2,000 of health care you receive in a year before your insurance begins to pay for anything. Your deductible may not apply to all services.

For example, your insurance must pay for preventative health care or other services even if you haven’t paid your full deductible, yet.

Federal Poverty Level (FPL) is the minimum income that a family needs to pay for food, clothing, transportation, shelter and other necessities.

This level is determined by the U.S. Department of Health and Human Services. FPL varies according to family size and is adjusted annually for inflation.

Eligibility for federal tax credits and Medicaid is based on a family’s percent of the federal poverty level. Households with income between 100 percent and 400 percent of FPL are eligible for some kind of insurance purchasing financial assistance.

2019 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA

For families/households with more than 8 persons, add $4,320 for each additional person.

The Marketplace is another name for healthcare.gov, the insurance website that is the only source of federal tax credits designed to bring down the cost of insurance.

You may also have heard the word “exchange” to describe the same thing.

Insurance sold in healthcare.gov in Montana is identical to insurance sold outside the website. Healthcare.gov is the only website that communicates with the federal tax agency, which must verify your eligibility for tax credits.

Modified Adjusted Gross Income (MAGI) is the figure used to determine eligibility for lower costs in the Marketplace and for Medicaid and CHIP. Generally, modified adjusted gross income is your adjusted gross income plus any tax-exempt Social Security, interest, or foreign income you have.

A network is a group of health care providers (doctors, hospitals, and specialists) who have signed a contract with your insurance company to provide services at a lower cost.

With most health insurance, if you receive health care services from an out-of-network provider, you will pay a significantly higher out-of-pocket costs.

You can find a list of a company’s provider network on the company’s website. We recommend checking the network before you buy your plan. If you are buying insurance through healthcare.gov, you will find a link from that site to the insurance company site, which will include a list of network providers.

Don’t assume every provider in your community is in every company’s network. Emergency care is always considered in-network, even if the hospital where you were treated is not in your company’s network.

Open enrollment is the period of time during which an individual can buy health insurance.

Open enrollment for 2019 begins November 1, 2018 and ends December 15, 2018.

Individuals may be able to apply for individual health insurance outside of open enrollment if they have a qualifying life event.

A premium is how much you’ll pay each month for insurance.

Premium tax credits are federal tax credits that will bring down your monthly health insurance bill.

Approximately 85 percent of Montanans who bought health insurance through healthcare.gov for 2018 received a tax credit to bring down their costs.

For more information, check out our Lowering Your Costs page.

A qualifying life event is any event that triggers the opportunity to buy health insurance after the ordinary end of health insurance open enrollment. These events include birth or adoption of a child, loss of a job, loss of healthcare coverage and marriage or divorce.