Your Health Insurance 101 Resource Guide

Terminology we should have been taught in high school.

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Gather round, RDG Readers! Class is in session.

When it comes to health, I say expect the unexpected. Which is why health insurance is so important.

It became abundantly clear to me that so many people don’t understand many terms surrounding health insurance here in the states. And to be fair, the system is a bit all over the place.

Even the HHS Secretary RFK Jr. confused Medicaid with Medicare in his hearing.

And it’s not exactly like they teach you all this in school. You sort of float around, figuring it out as you go - and not really needing to grasp it when you’re healthy.

But boy oh boy, when you get sick - it’s a little too late.

A recent study in Forbes share 56% of people studied felt confused about insurance.

So for the folks who are a bit unclear, here is a basic explainer of American Health Insurance terms. Open enrollment is coming soon and it’s important to understand how it all works to make the best decision for your life.

Apologies to all the international readers, but maybe you’ll find value in this too.

But first, for the aHUS Community - at 1pm ET/10a PT I’ll be participating in a NKF Panel on Atypical Hemolytic Uremic Syndrome and Shared Decision Making. See you there!

Your US Health Insurance Glossary

PPO - Preferred Provider Organization

A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency). There’s typically no need for a referral - a patient can see any doctor, but in network doctors are more affordable. This plan has the most flexibility and usually the most expensive.

HMO - Health Maintenance Organization

This plan typically limits coverage to care from doctors who work for or contract with the HMO, except in emergencies. This type of health insurance plan generally won't cover out-of-network care except in an emergency. These plans require choosing a Primary Care Provider (PCP) and getting referrals for specialists. The premiums are lower than a PPO.

POS - Point of Service

This unfortunate acronym for an insurance plan is a hybrid of an HMO and a PPO. There are still likely referrals, but there’s more flexibility for the patient to choose a provider or an out-of-network provider. Cost typically falls lower than a PPO, but higher than an EPO.

EPO - Exclusive Provider Organization

Another plan that is between an HMO and a PPO. You pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. There’s a broader network compared to an HMO. You would owe the full cost of an out-of-network provider however.

High Deductible Plan

These plans have the lowest premium, but you’ll pay a lot more for services until you hit the deductible. These plans are coupled often with HSAs and can be structured as an HMO, PPO, EPO, or POS.

Catastrophic Plan

Ah the plan that only covers emergencies. I remember before Obamacare, this is all I could get when insurers could deny people based on pre-existing conditions. Often only available for people under 30 or those who qualify. The premiums tend to be low, but the out-of-pocket expenses are high until it kicks in.

Employer-sponsored health insurance

Many adults access health insurance through their employer if they qualify. The employer contracts with specific insurance companies to offer a group plan and typically provides some shared financial support for the employee’s premium. By grouping many employees together, the risk of high costs is spread across a larger pool, potentially lowering premiums for everyone. However there is less choice, and employees are restricted to plans offered.

Health Savings Account - HSA

A tax-advantaged savings account used to pay for medical expenses only. The account is fully owned by the individual.

Flexible Spending Account - FSA

This medical-use only account is funded by pre-tax payroll deductions with a max of about $3300, but each year the employee can elect any amount below that and get access to the funds January 1st. Like when I got Lasik January 3rd, I maxed the FSA amount and used it to pay for the procedure and then I spent the year paying it off through pay-roll deductions. Access to FSAs are only employer based, but it’s a “use it or lose it” system. While there’s often a grace period, the employee must use the funds within the year otherwise they are forfeited.

Medicaid

According to the HHS, “Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. The federal government has general rules that all state Medicaid programs must follow, but each state runs its own program. This means eligibility requirements and benefits can vary from state to state.

Medicaid offers benefits that Medicare doesn’t normally cover, like nursing home care and personal care services. People with Medicaid usually don’t pay anything for covered medical expenses but may owe a small co-payment.”

Original Medicare Part A and B

Medicare is federal health insurance for people 65 or older, and some people under 65 with certain disabilities or conditions. Medicare has set standards for costs and coverage, no matter the state. People with Medicare pay part of the costs through things like monthly premiums, deductibles. Original Medicare is referred to as Parts A and B. A is for hospital care and B is for medical coverage, like your doctor.

Medicare Advantage or Part C

Medicare Advantage, also known as Part C, is an alternative way to get your Medicare benefits, offered by private companies approved by Medicare. It offers benefits of A and B, but with options like dental and vision.

Medicare Advantage plans ideally offer some advantages like extra benefits and cost predictability, but they also have potential downsides such as network restrictions and prior authorization requirements.

Medicare Part D

This part of Medicare supports drug costs for Original Medicare and Medicare Advantage.

CHIP

Children’s Health Insurance Program or CHIP provides federal funds for states to provide healthcare coverage to eligible low-income uninsured children and pregnant women. Typically those eligible earn too much for Medicaid but still need resources and support.

ACA

The Affordable Care Act, also known as Obamacare, provides access to health insurance outside the employee based system via a Health Insurance Marketplace. The ACA offers financial assistance, known as premium tax credits or subsidies, to individuals and families who qualify to help them afford health insurance purchased through the Health Insurance Marketplace. Although these subsidies may be in jeopardy after the last budget bill making the ACA less affordable.

Which candidly is unfortunate for families like mine who work, but don’t qualify for employer healthcare.

Concierge Service Model

Unlike typical insurance, patients pay an annual or monthly membership fee to a concierge doctor or practice for enhanced primary care services and personalized attention. They still often take forms of insurance, but the idea is that you get a higher level of personalized service from the provider.

Deductible

The deductible is the amount you can expect to pay before the insurance fully kicks in. The deductible may not apply to all services, so check your plan. So if your deductible is $1000, you’ll likely pay that first and then the plan will start its coverage.

Out-of-pocket max

This is the MOST you will pay until the plan kicks in at 100%. It does not include the premium however, you’ll still pay that. Check with your specific insurance to make sure you know what all counts toward the max.

Premium

The amount that must to be paid to the insurance company. Usually this a monthly charge.

Copay

Typically a fixed amount paid at the doctor’s office or service by the patient.

Coinsurance

Once your deductible is met, coinsurance is the percentage of the cost of covered services that you are responsible for paying.

Out-of-network

These are providers that don’t have a contract with your specific insurance. They either are not covered or you can expect to pay more than an in-network doctor.

Referral

Primarily used in the HMO insurance structure if a specialist is needed, likely a primary care physician is required to create a referral for the patient to get approved for further consultation.

Superbill

Despite the name, it’s not really a bill in the traditional sense. A superbill is an itemized document that healthcare providers give to patients, detailing the services rendered and their associated costs. It’s a primary source of information for patients to submit insurance claims for potential reimbursement. Superbills are useful when patients see out-of-network providers in particular.

Balance billing

Balance billing occurs when a provider bills a patient for the difference between their charges and the amount paid by the patient's insurance, particularly when the provider is out-of-network. Essentially, it's when a provider bills you for the "balance" left over after your insurance company pays their portion. This can lead to unexpected and potentially large medical bills for the patient.

Sometimes “surprise billing” happens here if you go to a hospital and there are charges or specialists not contracted with your insurance.

Preauthorization

You hear me rail against preauthorization or prior authorization. It’s essentially a decision that your insurance makes on whether a course of treatment is medically necessary. This system often delays or denies whatever a physician decides is best for the patient.

Open enrollment

Open enrollment is the period when individuals can sign up for or make changes to their health insurance plans. Open enrollment periods are usually limited to a few weeks each year and an opportunity to change plans. The dates can vary but you can expect the period to be around November to prepare for the next calendar year.

Did I miss anything? Are you still confused about anything? Did this help? Let me know.

Comment of the Week

“It's so hard navigating. Working for docs taught me that. Being a senior & navigating Medicare taught me that. Can't imagine the fighting you've gone through. I'm sure you have, or maybe the med you need isn't available in Canada, but have you inquired? I take 2 generic drugs that are "unfairly" expensive here but are 60% less in Canada. In any event, Happy HOLIDAZE.” Jacki

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If you’re new here and wondering, “what happened to this lady?” read:

I started writing this when I was on dialysis. It’s intended to be both memoir and a practical tool to help folks who might be going through something similar or those caregivers and family supporting someone with a challenging diagnosis. NOTE: This is not intended to replace actual medical guidance. Please consult your doctors on your individual challenges and situations. Please talk to your clinicians before adjusting any of your care protocols. Also names have been changed for most of my medical staff.

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