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Health Insurance Frequently Asked Questions


Note: The terms and definitions used in these FAQs are common ones. Definitions and terminology may vary by insurance company.

Affordable health insurance is a concern for me. What are my costs going to be?

Your costs involve a combination of premium payments, deductibles, copays, and coinsurance. It’s this stew of different ways you have to pay that can make health insurance seem confusing. Put simply:

Premium
What you pay per month to have a health plan.

Copay
Fixed prices determined by your health plan for specific health services. For example, a doctor’s visit under your plan may have a copay of $35.

Deductible
How much you have to pay toward covered expenses before the insurance company starts paying.

Coinsurance
This is the percent of covered expense you pay after you’ve met your deductible. So, once you’ve met your deductible, if your coinsurance is 20%, then for every $100 of covered expenses, you pay $20 while your insurance company pays $80.

You should also pay attention to your plan’s annual out-of-pocket maximum. Once you’ve spent that amount through a combination of deductible and coinsurance payments, your insurance company takes over paying 100% of covered expenses. (Note: Usually premiums and copays don’t apply toward the out-of-pocket maximum.)

What does minimum essential coverage (MEC) mean?

Generally speaking, MEC means the health plan covers the 10 essential health benefit (EHB) areas the ACA outlines.

The ACA’s 10 Essential Health Benefits

  • Doctor visits and other outpatient care (also called ambulatory services)
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services
  • Prescription drug coverage
  • Rehabilitative and habilitative services/devices (for example, physical therapy after a stroke, speech therapy for children)
  • Laboratory services/tests
  • Preventive and wellness care
  • Pediatric services, including oral and vision care
Minimum Essential Coverage includes Maternity Coverage

I’m looking for affordable health insurance. How does the ACA help me?

Under the ACA, your income level could make you eligible for cost savings on your insurance in a few different ways:

  • You could be eligible for a premium tax credit that lowers your premium, your monthly bill for medical insurance
  • You could be eligible for reduced deductibles, copays or coinsurance rates as a part of your plan
  • You could have a lower out-of-pocket maximum apply to your plan

That’s why it’s so important to have your accurate income information ready when you apply for your health plan—so you can find out if you are eligible for any of these tax credits or cost reductions.

What’s an HSA? Can that help me get affordable health insurance?

Health Savings Accounts (HSAs) are tax-favored savings accounts where you can set aside money to pay for your own health care costs. Unlike the money you put in similar accounts in the past (often called Flexible Savings Accounts or FSAs), the money in an HSA doesn’t disappear at the end of year. This money is yours, just like in a regular savings account, and continues to grow and earn interest.

Insurance Savings Tip

If you have a high deductible health care plan, you’ll often be eligible to open a Health Savings Account. These accounts are a smart move because you may be able to get tax benefits three different ways. Consult a tax advisor for details.

One HSA, three ways to save.

HSA

First, any money you put into the HSA (up to the legal limit) is set aside before taxes.

Tax Deferred Growth

Second, interest grows in the account tax deferred.

Medical Expenses

And third, any money you withdraw to pay for your eligible medical expenses is not taxed.

What is the tax penalty if I don’t have health coverage?

In 2016, for not having a plan that meets ACA standards, you pay the greater of the following:

  • 2.5% of your yearly household income
  • $695 per person, $347.50 per child under 18.

You face a penalty of a part of that total fee for each full month a family member has no coverage. In 2016, the total tax penalty a family can pay is $2,085.

Going forward, the 2.5% penalty will stay the same, but the flat fees will adjust for inflation.

Can I get health insurance even if I currently have health problems?

Guaranteed Issue Plans

Yes. This concept is called guaranteed issue. It means you cannot be turned down for ACA health insurance regardless of your current health issues, age or income.

HMO, PPO, EPO... I’m confused. What are these different health plans?

These abbreviations really refer to the type of network a health plan has. A network is a list of doctors and other health care facilities your carrier provides. These doctors and facilities have agreed to charge lower rates to participants in a given health plan. If you use one from the list, you are getting “in-network” care for eligible services. If you go to a doctor or facility not on the list, you are going “out of network,” and may end up paying more out of pocket.

Newtorks and How They Work
Primary Care Physician PCP

Can I choose my own doctor/hospital?
Will I need to select a primary care physician (PCP)?
Will I need a referral to see a specialist or can I just go if I need to?

The answer to each of these questions is, it depends. Your health plan’s network determines:

  • What doctors, hospitals and facilities are in network
  • What, if anything, will be paid for covered expenses if you go out of your network for care
  • Whether or not you need a primary care physician or primary care provider (PCP), one health care professional designated as your main health care point of contact
  • What, if any, procedure you need to follow to be referred to a specialist for care

Gold, Silver, Bronze—what are these metal plans I keep hearing about?

The metal categories have nothing to do with how “good” a medical insurance plan is. They are used by the federal government to give consumers general information about how a given health plan shares the costs between the insurance company and the insured. Learn more about the ACA metal plan categories.

Marketplace ACA Health Metal Plans

What’s a Catastrophic Health Plan? Can I get cheap health insurance with one of those?

Catastrophic health plans qualify as coverage under the ACA. However, to get this type of medical insurance, you have to be under 30 or get a hardship exemption from the government (based on your income).

They do have lower premiums than other ACA plans, but they also cover far less, usually just 3 primary care visits a year and some preventive care. Beyond that, you are responsible for all health care costs until you reach the plan’s deductible, which was $6,850 in 2016.

Insurance Savings Tip

Premium tax credits and cost reductions of your deductibles, copays, coinsurance and out-of-pocket maximum don’t apply to Catastrophic health plans. If your income makes you eligible for a Catastrophic plan, you are likely eligible for those credits and cost reductions, too. Check to see if a Bronze or Silver plan might cost you less or give you more of the coverage you need when you take those credits and reductions into account.

Prescription Coverage with ACA Plans

I have ongoing medication needs. Will prescriptions be covered?

Yes, prescription drug coverage is one of the essential health benefits required by the ACA. The ACA health plan you choose will have, as a component, some prescription drug coverage. The type of coverage varies by plan, so read carefully what each plan you’re considering covers.

Need More Information about Personal Insurance?

Explore the ACA plan metal categories


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