Glossary of Terms

Putting Patients First

Coinsurance

Your share of the costs of certain medical care or medications, calculated as a percentage of the total cost. For example, if the health insurance 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 plan pays the rest of the cost.

Copayment

A fixed amount (for example, $15) you pay for certain medical care or medications. The amount can vary by the type of health care service.

Deductible

The amount you pay for health care services before your health insurance plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve spent $1,000 on medical care or medications. However, some services, including preventive services, may not be subject to the deductible. Be sure to check your plan.

Formulary Tier

The level of cost-sharing assigned to a particular medication or therapy. Services assigned to a higher tier typically cost more than those assigned to a lower tier.

In-Network

The term used to describe when a provider is included in a plan’s network. In-network providers can also be referred to as preferred providers.

Generic Medication

A prescription drug that has the same active-ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs. The Food and Drug Administration (FDA) rates these drugs to be as safe and effective as brand-name drugs.

Metal Level

Plans are categorized by “metal levels”—Bronze, Silver, Gold, and Platinum. Metal levels tell you what portion of total health care costs plans will cover. For example, Bronze plans typically pay around 60% of a person’s health care costs, and Platinum plans cover closer to 90%.

Out-of-Pocket Costs

The costs you pay that are not covered by insurance when you visit a doctor, hospital, or pharmacy. Examples of out-of-pocket costs include copayments, coinsurance, and deductibles.

Out-of-Pocket Maximum

The most you pay before your health plan begins to pay 100% of the cost for in-network services. This limit never includes your premium or health care your plan doesn’t cover. Health plans count all in-network copayments, deductibles, and coinsurance payments to this limit. The maximum out-of-pocket limit for any marketplace plan in 2014 cannot be higher than $6,350 for an individual plan and $12,700 for a family plan.

Plan Formulary

The list of medications that your health plan covers. Sometimes called a “List of Covered Drugs.”

Plan Network

The facilities, health care providers, and suppliers your health plan has contracted with to provide health care services.

Preauthorization

A term used by health plans to convey that before seeking certain health care services, patients must seek prior approval or permission. Services such as home health care and non-urgent surgeries often require preauthorization.

Premium

The amount you pay every month for your health insurance plan.