Open enrollment is that time of the year when you can review and make changes to your health insurance coverage. While it’s already happening in some states, for most it begins this week on, November 1st. It’s a crucial period that allows you to select a plan that best suits your needs for the upcoming year. Even if you like the plan you have, it’s still a good idea to actively shop and review plans because both premium costs and networks can change year over year. However, navigating the world of health insurance can be complex, especially if you’re not familiar with the terminology. To help you make informed decisions, we’ve compiled a list of the top ten health insurance terms you should know while shopping for health insurance during open enrollment.
Premium: Your premium is the monthly cost you pay for your health insurance coverage. This is an ongoing expense, and it’s important to budget for it when selecting a plan. But keep in mind, a plan with the lowest premium may not be the lowest overall cost plan. You should consider other factors like deductibles, copays, and coinsurance.
Deductible: The deductible is the amount you must pay out of pocket for covered medical expenses before your insurance starts to contribute. Plans with lower premiums often have higher deductibles, and vice versa.
Copayment (Copay): A copayment, or copay, is a fixed amount you pay for specific medical services or prescription drugs. For example, you might have a $20 copay for a doctor’s office visit.
Coinsurance: Coinsurance is the percentage of costs you share with your insurance company after you’ve met your deductible. For instance, if your plan has 20% coinsurance, you’ll pay 20% of covered expenses while your insurance covers the remaining 80%.
Network: Health insurance plans often have a network of preferred healthcare providers, including doctors, hospitals, and clinics. Staying within your plan’s network can lead to lower costs, while going out of network may result in higher expenses. If you have a favorite doctor, make sure they participate in a plan’s network before you enroll.
Out-of-Pocket Maximum: The out-of-pocket maximum is the maximum amount you’ll have to pay for covered medical expenses each year. Once you reach this limit, your insurance company covers all eligible costs.
Pre-existing Condition: A pre-existing condition is a health issue you had before enrolling in a health insurance plan. Many plans are required to cover pre-existing conditions, but it’s essential to understand how your plan handles them.
Essential Health Benefits: The Affordable Care Act (ACA) mandates that all health insurance plans offer a set of essential health benefits, including preventive care, emergency services, prescription drugs, and more. Understanding these benefits ensures you’re getting comprehensive coverage.
Premium Tax Credits (Subsidies): Premium tax credits are financial assistance provided by the government to help lower-income individuals and families afford health insurance premiums. You may be eligible for these credits based on your income and household size.
Open enrollment is an important opportunity to secure the right health insurance coverage for you and your family. By understanding basic health insurance terms, you’ll be better equipped to make informed decisions during the open enrollment period. Take the time to compare plans, consider your healthcare needs, and consult with a qualified insurance advisor to ensure you choose the plan that best fits your requirements and budget. Remember, your health insurance should provide you with peace of mind, so make sure you fully comprehend these terms before making your selection.