Growing up in a family of five, the word “marketplace” meant that mom was headed to the grocery store. I have a lot of fond memories of watching cartoons and waiting for mom to come back home to fill the pantry and fridge with all kinds of yummy goodness.
These days, I work in the customer service center for Blue Cross and Blue Shield of Nebraska, and the word “marketplace” holds a very different meaning for me. Today when I use or hear the word “marketplace,” it’s in reference to the Individual Health Insurance Marketplace created by the Affordable Care Act.
It certainly isn’t surprising to us that the majority of our customers don’t speak “insurance-eese.” That can make dealing with insurance companies confusing, frustrating and something often dreaded. Below are some of those confusing insurance terms explained.
Copayment: For some services, you’re required to pay a specific dollar amount for care instead of a percentage of the bill. Most often you see this for doctor’s office visits. For example, you might be asked to pay $30 or $50 per office visit. That copayment is always paid directly to the doctor’s office at the time of the visit.
Deductible: This is the dollar amount you are responsible for paying for your covered health care services each year before insurance starts footing the bill. For example, if your annual deductible is $1,100, you need to spend $1,100 on covered services before your insurance company starts paying a percentage of the cost.
Coinsurance: Coinsurance is your share of the cost of your medical expenses once the deductible has been met. It’s usually shown as a percentage. Let’s say your plan pays 80 percent of covered charges. This means that you’ll pay your deductible, and then after that you’ll be responsible for 20 percent of your health care expenses until you reach your plan’s out-of-pocket maximum.
Out-of-pocket maximum: This is the most you will have to pay out of your own pocket for health care in a given year. The out-of-pocket maximum is reached by adding together your deductible, coinsurance and copays. Check your benefit materials to see what your plan’s out-of-pocket maximum is. Your plan also might have different out-of-pocket maximums for in-network services and out-of-network services. Once you have reached your out-of-pocket maximum, your health plan will pay 100% of your covered health care services for the rest of the year.
In-Network: The physicians, hospitals and other health care providers that have contracted with your insurance company and have agreed to pre-negotiated rates are considered in-network. Most companies offer an online provider directory or provider finder to make selecting an in-network doctor or facility easy.
Out-of-Network: Physicians, hospitals and other health care providers who have not signed a contract with an insurance company are considered out-of-network. You generally pay more when you use out-of-network providers.
Premium: The amount you pay for your health insurance plan. If you are enrolled in a group plan through your employer (or your spouse’s employer), you might have your premiums deducted out of a paycheck. If you purchase insurance on your own, you might have your premiums deducted automatically from your bank account on a monthly or quarterly basis.
The exchange: This is just another term for the Health Insurance Marketplace, or healthcare.gov, created by the Affordable Care Act. Individuals can compare health plans and enroll for coverage on the exchange.
Subsidy: A tax credit the government provides to help qualified individuals pay for health insurance.
Becoming familiar with these terms will help you navigate the insurance world.
Michelle Greene is a customer service manager at Blue Cross and Blue Shield of Nebraska. When she’s not supporting her customer service team, she’s at home second-guessing football coaches and walking her spoiled puppy, Max.