Understanding Health Coverage
Health insurance is designed to help protect you against the high costs of health care. It works similarly to other types of insurance — you pay a premium (payment) in exchange for the insurance company's promise to pay certain costs in the event of something unexpected. But health insurance also works a bit like a warranty from a car dealership — it also pays for routine maintenance to make sure you stay well and fixes minor things that go wrong from time to time.Understanding health coverage will help you decode the maze of health benefit options available today. From the new health care law to HMOs and PPOs to Medicare and drug coverage, learn the facts so you may make more informed choices about your health coverage and your future.
Getting Health Coverage
You can get health coverage through an employer or purchase it yourself. Get the basics on getting health coverage.Health Care Reform
The new health care law — called the Affordable Care Act — was passed in 2010. The law is changing the way some Americans get health coverage. Some changes are happening now. The biggest change for consumers comes in 2014, when almost everyone in the U.S. will be required to have health insurance. Learn more about how health care reform may affect you.Types of Health Coverage
Knowing what is covered ahead of time is a key to finding the right plan for you. From medical care to prescriptions to dental or vision, learn about the types of health coverage available to you.Types of Products
You’ve heard terms like PPO, HMO and deductibles, but what do they mean? Get the information you need to make your best choice with our guide to different types of products.Economics of Health Care
Find out more about health care costs through our Economics of Health Care series. Its educational materials will help you identify health care costs, understand cost drivers and learn what we can all do to lower these costs.Glossary of Terms
Some insurance and medical jargon may make understanding health insurance difficult. We want to make it easier for you by providing clear definitions of common health insurance terms.Getting Health Coverage
Many people currently get health coverage through their employer. This is called group coverage. Employers may offer several plans to choose from, and employees get a chance to change their plan once a year during open enrollment.Some people purchase their own coverage because it is not available through their employer. This is called individual health insurance coverage. Individual health insurance coverage is a good option for people who are:
- In between jobs
- Self-employed
- Early retirees
- Recent college graduates
- Part-time workers
Starting in 2014, you will be able to get insurance on the health insurance exchange, an online shopping site where you'll be able to go online to look at insurance plans available in your area. Every health insurance plan in the new exchange will offer comprehensive coverage, from doctors to medications to hospital visits. You can compare all your insurance options based on price, benefits, quality and other features that may be important to you, in plain language that makes sense. Learn more about the exchange.
Health Care Reform
The new health care law — called the Affordable Care Act — was passed in 2010. The law is changing the way some Americans get health coverage. It may seem confusing and complex right now, but we know that it will touch each of us in some way.One of the most important things to know is that the law is increasing access to care for you and your family.
- Starting in 2014, you will be able to buy private health insurance if you want it, or see if you qualify for a government health plan.
- The new law gives access to coverage to every person, despite any preexisting conditions or other issues that may have prevented you from getting health insurance in the past.
- You will also have access to preventive services and screenings without paying anything out of pocket, to help you stay healthier by preventing health problems, or catching them before they become much more serious.
Understanding Health Care Reform
Starting in 2014, most people will be required to have health insurance or pay a penalty. Coverage can be through your employer, an insurance company, a government program such as Medicaid or Medicare, or insurance bought on the health insurance exchange. Learn about the exemptions to this rule and other key features you should be aware of.Timeline of Changes
Some changes are happening now. The biggest change for consumers comes in 2014, when almost everyone in the U.S. will be required to have health insurance. Learn what's changing now and what's coming down the road.A New Way to Get Insurance: Health Insurance Exchange
There will soon be a new way to buy health insurance online: the health insurance exchange. The exchange is a new government website designed to help you find health insurance that fits your budget, in an easy way. Learn more about the exchange.Next Steps: Preparing for 2014
There are so many benefits to the new law. Blue Cross and Blue Shield of Texas is here to help you understand them, so you can make the best decisions for you and your family. Learn what you can do now to help make sure you're ready for 2014.Health Care Reform
The new health care law — called the Affordable Care Act — was passed in 2010. The law is changing the way some Americans get health coverage. It may seem confusing and complex right now, but we know that it will touch each of us in some way.One of the most important things to know is that the law is increasing access to care for you and your family.
- Starting in 2014, you will be able to buy private health insurance if you want it, or see if you qualify for a government health plan.
- The new law gives access to coverage to every person, despite any preexisting conditions or other issues that may have prevented you from getting health insurance in the past.
- You will also have access to preventive services and screenings without paying anything out of pocket, to help you stay healthier by preventing health problems, or catching them before they become much more serious.
Understanding Health Care Reform
Starting in 2014, most people will be required to have health insurance or pay a penalty. Coverage can be through your employer, an insurance company, a government program such as Medicaid or Medicare, or insurance bought on the health insurance exchange. Learn about the exemptions to this rule and other key features you should be aware of.Timeline of Changes
Some changes are happening now. The biggest change for consumers comes in 2014, when almost everyone in the U.S. will be required to have health insurance. Learn what's changing now and what's coming down the road.A New Way to Get Insurance: Health Insurance Exchange
There will soon be a new way to buy health insurance online: the health insurance exchange. The exchange is a new government website designed to help you find health insurance that fits your budget, in an easy way. Learn more about the exchange.Next Steps: Preparing for 2014
There are so many benefits to the new law. Blue Cross and Blue Shield of Texas is here to help you understand them, so you can make the best decisions for you and your family. Learn what you can do now to help make sure you're ready for 2014.Types of Health Coverage
Health insurance plans come in all shapes and sizes. That's why it's important to assess your needs before you choose an insurance plan. First, determine what kind of coverage you need, for example, a major medical insurance plan or a temporary insurance plan. A major medical insurance plan usually renews on a yearly basis and does not expire until you decide to terminate the policy or discontinue paying premiums. On a temporary insurance plan, you can decide if you want coverage from one to eleven months.Major medical insurance plans usually offer an optional dental plan. The dental plan is only offered along with the health insurance plan - it cannot be purchased alone. Additional services that could be included with a health insurance plan are preventive care, prescription drug coverage and vision coverage. It is important to do research so you can find the insurance plan that provides the best coverage and services for you.
Types of Products
The three most common types of health plans are Health Maintenance Organizations (HMOs), Preferred Provider Organization insurance plans (PPOs) and Consumer Directed Health Plans (CDHPs).HMOs
HMOs, available through participating employers, are a type of health plan that gives you access to certain doctors and hospitals, often called network or contracting doctors and hospitals (sometimes called "providers").HMO basics:
- When you sign up, you select a primary care physician (PCP) from a network of doctors.
- Your PCP is your first point of contact for most of your basic health care needs.
- Women can also select an OB/GYN for obstetrical and gynecological care.
- If you need special tests or need to see a specialist, your PCP will give you a referral to see another doctor.
The bottom line:
- HMO plans generally have lower up-front costs, or premiums, than other types of plans.
- HMOs usually feature copayments as well. Copayments are set amounts (usually a dollar amount or a percentage) that you pay for care. An example of a copayment is $20 for each office visit.
- HMO plans generally provide coverage only when you use doctors, hospitals and specialists that are in the network.
- If you seek care outside the network, other than in an emergency or with authorization from your HMO, your care typically will not be covered at all.
PPOs
Like HMOs, PPOs often feature a network of doctors, specialists and hospitals; however, there are some key differences between the two types of plans.PPO basics:
- With a PPO insurance plan, you don't have to choose a primary care physician.
- You have the option of receiving care from doctors, hospitals and specialists in the network or outside the network, and you don't always need a referral to see a specialist.
- PPO insurance plan premiums are generally higher than HMO plans, which means you'll have to pay more up front.
- When you receive care from a doctor or hospital that is in the network, your costs tend to be lower.
- When you receive care from a doctor or hospital outside the network your costs are likely to be higher, and you may be responsible for the difference between the amount your insurance plan pays and the provider's billed charges.
- PPO insurance plans usually have a deductible. So, for example, if your PPO insurance plan has a $500 deductible, your coverage doesn't begin until you've paid out-of-pocket for the first $500 of your own medical expenses. Preventive care services are not subject to the deductible
CDHPs and the HSA Option
Consumer Driven Health Plans (CDHPs) often involve pairing a high deductible PPO insurance plan with a tax-advantaged account, such as a Health Savings Account (HSA)1. For an individual to establish an HSA and contribute money to the account each year, he or she must be considered an HSA-eligible individual. Eligibility includes enrollment in an HSA-qualified high deductible health insurance plan.Guidance on choosing a health insurance plan: U.S. Agency for Healthcare Research and Quality (AHRQ)
.Key features:
- If the insurance plan uses a PPO network, you don't have to choose a primary care physician.
- You have the option of receiving care from doctors, hospitals and specialists in the network or outside the network, and you don't always need a referral to see a specialist.
- When a CDHP includes a high deductible health insurance plan, premiums are often lower than other types of health plans because you are responsible for a greater share of your health care costs.
- If the health insurance plan is an HSA-qualified high deductible health insurance plan, and you are an HSA-eligible individual, you may establish an HSA and make contributions to the account each year.
- An HSA is a savings account that you can use to cover a wide range of qualified medical expenses. HSAs have special tax advantages and are regulated by the Treasury Department.1
Resources
For more information about individual health insurance plans, visit the U.S. Agency for Healthcare Research and Quality (AHRQ). This website provides guidance on choosing a health insurance plan.
1 Health Savings Accounts (HSA) have tax and legal ramifications. Blue Cross and Blue Shield of Texas does not provide legal or tax advice, and nothing herein should be construed as legal or tax advice. These materials, and any tax-related statements in them, are not intended or written to be used, and cannot be used or relied on, for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products.
Glossary of Terms
A
Affordable Care Act
A new, comprehensive law passed in 2010, aimed at reforming America's health care system to improve access and affordability for more Americans.allowable amount
The maximum amount determined by the healthplan to be eligible for consideration of payment for a particular service, supply or procedure.allowable charge
The maximum amount a healthplan will reimburse a doctor or hospital for a given service.annual deductible
The amount of eligible expenses you are required to pay annually before reimbursement by your healthplan begins.annual limit
An insurance plan may limit the dollar amount it will pay during one year for a certain treatment or service, or for all benefits provided in a year.annual out-of-pocket
The maximum amount, per year, you are required to pay out of your own pocket for covered health care services.B
benefits
The health care items or services covered by an insurance plan. Your insurance plan may sometimes be referred to as a "benefit package."C
catastrophic plan
The health insurance exchange will include a catastrophic plan option. Catastrophic plans have lower premiums, but begin to pay only after you've first paid a certain amount for covered services, or just cover more expensive levels of care, like hospitalizations. Catastrophic plans are an option to consider for young adults and people for whom coverage would otherwise be unaffordable.claim
An itemized bill for services that have been provided to a subscriber, a subscriber's spouse or dependents.claim form
A form generally filled out by a provider and submitted to your healthplan for consideration of payment of benefits under that healthplan.COBRA
A federal act that requires group healthplans to allow employees and certain dependents to continue their group coverage for a stated period of time following a qualifying event which causes the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered employee and termination of employment.coinsurance
A percentage of an eligible expense that you are required to pay for a service covered by your healthplan.
Coordination of Benefits (COB)
An arrangement where, if you or your dependents are covered under more than one group healthplan, the plans work together to coordinate reimbursement for the medical services you received.copayment
A fixed dollar amount you are required to pay for a covered service at the time you receive care.covered person
The person in whose name a health care policy is issued and, in the case of family coverage, the member's/subscriber's dependents.covered service
A service that is covered according to the terms in your health care policy.D
deductible
A fixed amount of the eligible expenses you are required to pay before reimbursement by your health plan begins.dependent
A person, other than the member/subscriber (generally a spouse or child), who receives health care coverage under the member's/subscriber's policy.domestic partner
A person with whom the member/subscriber has entered into a long-term, committed relationship. The relationship must meet the health care plan's specific criteria for a domestic partner.drug formulary
A list of commonly prescribed drugs (also known as a prescription drug list). Not all drugs listed in a plan's prescription drug list are automatically covered under that plan.E
effective date
The date on which your health care coverage begins.emergency medical care
Services provided for the initial outpatient treatment of an acute medical condition, usually in a hospital setting. Most healthplans have specific guidelines to define emergency medical care.employer responsibility
Starting in 2014, if an employer with at least 50 full-time equivalent employees doesn't provide affordable health insurance and an employee uses a tax credit to help pay for insurance through a Health Insurance Exchange, the employer must pay a fee to help cover the cost of tax credits.essential health benefits
Some benefits will be included in every insurance plan. Beginning in 2014, most insurance plans you can choose from – whether you buy on the health insurance exchange or go directly to the insurance company of your choice – will include many benefits that are meant to make sure basic health concerns are covered.exclusions
Specific medical conditions or circumstances that are not covered under a health plan.Explanation of Benefits (EOB)
The form sent to you after a claim has been processed by your healthplan. The EOB explains the actions taken on the claim such as the amount paid, the benefit available, reasons for denying payment and the claims appeal process.F
family coverage
Health care coverage for a member/subscriber and his/her eligible dependents.Federal Poverty Level (FPL)
A level of income issued annually by the Department of Health and Human Services – used to determine eligibility for certain programs and benefits. FPL will be used to determine the amount of tax credit you qualify for to offset the cost of purchasing health insurance.G
generic substitute
A prescription drug that is the generic equivalent of a drug listed on your health plan's formulary.grandfathered health plan
A health plan that was in place when the new health care law was passed into law. A grandfathered plan is exempt from some requirements of the new law. The grandfather rule enables businesses and families to keep the plan they have, if they wish to.group
A group of people covered under the same health care policy and identified by their relation to the same employer.guaranteed issue
A requirement under the Affordable Care Act that health plans must permit you to enroll in some form of insurance coverage regardless of health status, age, gender or other factors.H
Health Maintenance Organization (HMO)
An organization that provides comprehensive health care coverage to its members through a network of doctors, hospitals and other health care providers.High Risk Pool Plan (State)
Plans that provide coverage if you have a serious health condition that prevents you from getting private insurance. The new law established the Pre-existing Condition Insurance Plan. Some states also have their own high risk pool plan. In 2014 when guaranteed issue goes into effect, many states may choose to no longer offer a high risk insurance pool plan.HIPAA
A federal law which outlines certain rules and requirements employer-sponsored group healthplans, insurance companies and managed care organizations must follow to provide health care insurance coverage for individuals and groups; most recently amended to add privacy rules which became effective April 14, 2003.I
individual health insurance plan
Health care coverage for an individual with no covered dependents. Also knows as individual coverage.
in-network
Covered services provided or ordered by your primary care physician (PCP) or another network provider referred by your PCP.individual mandate
Starting in 2014, you must be enrolled in a health insurance plan that meets basic minimum standards. If you aren’t, you may be required to pay a penalty on your income tax filing. You won't have to pay an assessment if you have very low income and coverage is unaffordable to you, or for other reasons including your religious beliefs. You can also apply for a waiver asking not to pay an assessment if you don't qualify automatically.inpatient services
Services provided when a member/subscriber is registered and treated as a bed patient in a health care facility such as a hospital.insured person
The person to whom health care coverage has been extended by the contract holder, sometimes referred to as a member/subscriber.J
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lifetime limit
A cap on the total lifetime benefits you may get from your insurance company, either on all coverage or for a certain condition. A health plan may have a total lifetime dollar limit on benefits (like a $1 million lifetime cap) or limits on specific benefits (like a $200,000 lifetime cap on organ transplants or one gastric bypass per lifetime), or a combination of the two. After a lifetime limit is reached, the insurance plan will no longer pay for covered services. Under the new health care law, lifetime limits are no longer allowed in most cases.M
maximum allowance
A fixed amount that providers agree to accept as payment in full for a particular covered service.maximum annual benefit
The maximum dollar amount your healthplan will pay for a particular health care service or for all health care services provided to you during one year.Medicaid
A joint federal and state funded program that provides health care coverage for low-income children and families, and for certain aged and disabled individuals.medical group
A licensed group of doctors or health care providers that contract with a health plan to deliver health care services to plan members/subscribers.Medicare
The federal program established to provide health care coverage for eligible senior citizens and certain eligible disabled persons under age 65.Medicare Part A
The federal program established to provide health care coverage for eligible senior citizens and certain eligible disabled persons under age 65. Medicare Part A provides basic hospital insurance coverage automatically for most eligible persons.
Medicare Part B
The federal program established to provide health care coverage for eligible senior citizens and certain eligible disabled persons under age 65. Medicare Part B provides benefits to help cover the costs of doctors' services.Medicare Part C
The federal program established to provide health care coverage for eligible senior citizens and certain eligible disabled persons under age 65. Medicare Part C (also known as Medicare+Choice) expands the list of different types of entities allowed to offer health plans to Medicare beneficiaries.member
The person to whom health care coverage has been extended by the contract holder (generally their employer); sometimes referred to as the insured or insured person; generally used in the health maintenance organization (HMO) context.
N
network
The doctors, hospitals and other health care providers that a health plan has contracted with to deliver health care services to its members/subscribers.O
open enrollment period
The period of time set up to allow you to choose from available health insurance plans, usually once a year. The first open enrollment period for the new health insurance exchange begins in October 2013.out-of-network
Services not provided, ordered or referred by your primary care physician (PCP).out-of-pocket maximum
The maximum amount you have to pay for eligible expenses under your health plan during a defined benefit period.outpatient services
Treatment that is provided to a patient who is able to return home after care without an overnight stay in a hospital or other inpatient facility.P
preauthorization
The process by which a member/subscriber or their primary care physician (PCP) notifies the healthplan, in advance, of plans for the member/subscriber to undergo a course of care such as a hospital admission or a complex diagnostic test.pre-existing condition
A condition, disability or illness that you have been treated for before applying for new health coverage.Preferred Provider Organization (PPO)
A healthplan that provides covered services at a discounted cost for subscribers who use network health care providers. PPOs also provide coverage for services rendered by health care providers who are not part of the PPO network; the subscriber generally pays a greater portion of the cost for such services.preferred drug list
A list of commonly prescribed drugs (also known as a prescription drug list). Not all drugs listed in a healthplan's prescription drug list are automatically covered under that plan.premium
The ongoing amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly or yearly. The premium may not be the only amount you pay for insurance coverage. Typically, you will also have a co-payment or deductible amount in addition to your premium.prescription drugs
Drugs and medications that, by law, must be dispensed by a written prescription from a licensed doctor.preventive services
Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems.primary care physician (PCP)
The physician you choose to be your primary source for medical care. Your PCP coordinates all your medical care, including hospital admissions and referrals to specialists. Not all healthplans require a PCP.provider
A licensed health care facility, program, agency, doctor or health professional that delivers health care services.Q
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