Open Enrollment, a key part of the Affordable Care Act (ACA), begins soon. Understanding the basics can help you take advantage of this important time period. Now is the time to review your current health insurance policy or sign up for a new plan. Questions regarding insurance terminology? Check out this handy guide:
What health insurance terms should I know?
First, let’s go over some of the terms frequently used when discussing Open Enrollment and health insurance.
Open Enrollment Period
The annual period, beginning November 1st and ending December 15th, allowing anyone to enroll in a new Qualified Health Plan or make changes to a current plan. *For alternative health insurance options such as term health insurance, you can apply at anytime.
Qualified Health Plan (QHP)
When the Affordable Care Act was passed, certain requirements were created for major medical health insurance. Some of these requirements include: guaranteed acceptance (no medical history/question required to apply), benefits for pre-existing conditions, and preventive care benefits. Health insurance plans that meet the ACA requirements are called Qualified Health Plans and are only available during Open Enrollment or if you have a Special Enrollment Period. Read more about QHP’s later on in this article.
Special Enrollment Period (SEP)
An enrollment period when you’re eligible to sign up for a Qualified Health Plan outside of Open Enrollment due to a qualifying life event (QLE) such as marriage, the birth or adoption of a child, or loss of group coverage through an employer.
The payment you make to your insurance provider on a monthly basis to maintain coverage.
A predetermined fixed amount you pay on the spot for eligible services, such as during a doctor’s visit or while filling a prescription. Plans with higher premiums tend to have lower copayments, and vice versa. However, some plans may not have copayments. For example, an HSA-qualified plan will not have copayments (possibly for emergency care only) so payments made to the doctor or hospital will contribute towards your deductible.
The amount you need to pay out-of-pocket for covered health care services before your insurance will begin to share some of your costs, which is where coinsurance plays a role. insurance company will begin to cover your costs.
50/50, 60/40, 70/30, 80/20, 90/10, 100/0 are all examples of coinsurance which is the percentage you owe for eligible medical services after you pay your entire deductible. You are responsible for the lower percent while your insurance pays the higher percent. For example, if you’ve met your deductible and your coinsurance rate is 30%, then you’ll need to pay $30 for a $100 service.
The “Individual Mandate” required a person to obtain specific types of medical coverage called Qualified Health Plans. The federal mandate has been eliminated so no federal penalty can apply allowing consumers to shop for health insurance that best fits their needs and budget – whether that is a QHP or an alternative option. The following States have imposed a State mandate: CA, MA, NJ, VT and DC.
How do I know which option to choose?
Now that you have a basic understanding of terminology and what the individual mandate was, you’re probably wondering if a QHP or another health insurance option is best for you. In the next section we’ll provide more details about some options available during Open Enrollment and give our recommendation based on our own experiences helping consumers.
Qualified Health Plans, defined.
Under the Affordable Care Act, an insurance plan must be certified, provide essential health benefits (see list below), follow established limits on cost-sharing (deductibles, co-payments, and out-of-pocket maximums), and along with other requirements. Plans that meet these requirements are called Qualified Health Plans (QHP) and available during Open Enrollment or a Special Enrollment Period.
A QHP includes 10 essential health benefits:
- Outpatient care—the kind you get without being admitted to a hospital
- Trips to the emergency room
- Treatment in the hospital for inpatient care
- Care before and after your baby is born
- Mental health and substance use disorder services, including behavioral health treatment, counseling, and psychotherapy
- Prescription drugs
- Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more.
- Lab tests
- Preventive services including counseling, screenings, and vaccines to keep you healthy and/or provide care for managing a chronic disease
- Pediatric services, including dental care and vision care for kids
Alternative Options – Term Health Insurance
Aside from QHPs, term health insurance is available in most States. Within the past year, term health insurance has become more popular for healthy individuals and families as it provides major medical protection (often up to $1 million per person or more) and is more affordable. Since term health insurance is less costly, this option will not provide benefits for pre-existing conditions. However, several term health insurance plans will include a preventive care visit once per year and a nationwide network allowing you to use any licensed doctor in the event a new injury or illness occurs. Quote term health insurance here.
What is boils down to: healthy vs. pre-existing
Consumers typically have two major factors when choosing health insurance – benefits and cost. QHPs are more comprehensive than other health insurance plans because of the essential health benefits included. This also means the cost for coverage is more expensive than alternative options such as term health insurance.
However if you have pre-existing conditions, a Qualified Health Plan is most likely the best solution. If you are fairly healthy and do not visit the doctor frequently, term health insurance will be a more affordable alternative and can begin as soon as tomorrow.