Below is a list of the terms that you need to know related to The Patient Protection and Affordable Care Act, better known as Obamacare. Additional terms will be added to this “Obamacare glossary” over time.
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Abbreviation for the Patient Protection and Affordable Care Act, sometimes referred to simply as the Affordable Care Act or Obamacare. Video summary of ACA
An estimate of average costs for covered benefits that a qualified health plan (QHP) will cover. For example, if a health plan has an actuarial value of 70%, on average, a consumer would be responsible for paying out of pocket for 30% of the total costs of all covered benefits provided by the health plan and the health insurance company would pay the remaining 70%. Your own costs may be more or less, depending on how much care you need over the benefit period
Advance Premium Tax Credit (APTC)
A premium tax credit that can reduce your monthly health insurance premium. Only available when you apply for coverage in the Health Insurance Marketplace.
Affordable Care Act
see ACA above
Under the ACA, assisters and navigators are entities can help people understand the new health coverage options, and provide information on how health insurance shoppers can select and enroll in a marketplace health plan. They work closely with the Federal Health Insurance Marketplace (or state marketplace) but will also be knowledgeable about other coverage options, such as Medicare, Medicaid and the Children’s Health Insurance Program (CHIP). Assisters are not licensed on behalf of a regulatory agency such as the state department of insurance, and are not permitted to suggest which plans a health insurance shopper should choose.
Typically the least expensive of the 4 metal level health plans established by Obamacare. Bronze plans on average cover 60% of the subscribers out of pocket costs.
Catastrophic Health Plan
A health plan available on healthcare marketplaces that covers all 10 essential health benefits required by the ACA but only certain types of expensive care, such as hospital visits. Under the ACA only those health insurance shoppers under age 30 or those who cannot find affordable coverage –by meeting specific criteria — can buy catastrophic coverage and still meet the individual mandate.
Cost Sharing Subsidy
Under the Affordable Care Act (ACA), low-income families, with household income between 100% of 250% of Federal Poverty Level (FPL), may be eligible for financial help to pay for out of pocket health care costs. Cost-sharing subsidies lower a families out of pocket costs by capping out of pocket costs at a lower limit than what they would be otherwise.
Qualified Health Plans are offered in four different tiers, or “metal levels“. The tiers—bronze, silver, gold and platinum—are based on how generous the plan is for the benefits and services covered. Bronze plans will have the lowest premiums, but the individual’s share of costs, such as deductibles and copayments, will be higher. Platinum plans will have the highest premiums, but fewer additional costs for consumers. Bronze plans have an actuarial value of 60% meaning that they are on average attended on covering 60% of the policy holders healthcare costs. Silver plans cover 70%, Gold Plans 80% and Platinum plans 90%.
An individual who is eligible to receive benefits from both Medicare and Medicaid.
Short for Essential Health Benefits. See below
Employer Sponsored Health Coverage
Health coverage an individual or family gets through his or her (or a spouse’s) job. This coverage can be as either an active or retired employee.
Essential Health Benefits
Basic health care services that qualified health plans will be required to include in individual and small group health plans as of 2014. This list of ten essential benefits includes
- Ambulatory Services
- Emergency Services
- Maternity & Newborn Care
- Mental Health & Substance Abuse Treatment
- Prescription Drugs
- Rehabilitation Services & Devices
- Laboratory Services
- Preventative & Wellness Services & Chronic Disease Mgmt.
- Pediatric Services (incl. Dental & Vision)
Sometimes referred to as EHB
Federal Poverty Level (FPL)
A measure of household income issued annually by the U.S. Department of Health and Human Services. As it relates to Obamacare, Federal poverty level is used to determine a health insurance shoppers eligibility for and magnitude of income based subsidies. It is also used to determine eligibility for free or low cost healthcare programs such as Medicaid or CHIP. 2015 Federal Poverty Level Chart
Health insurance plans that were in place before Obamacare was signed into law on March 23, 2010. Grandfathered plans do not need to comply with all of the rules of the ACA but over time, grandfathered plans will be phased out and lose their “grandfathered” status and be required to comply with all of the requirements set forth in the Affordable Care Act.
Health Care Law
A general term for the major health policy changes put in place by the Patient Protection and Affordable Care Act which was signed into law in March of 2010. This term is generally synonymous with ACA, Affordable Care Act, PPACA, and Health Care Reform. It puts into law strong consumer protections, requires certain levels of minimum benefits, provides new coverage options and has tools to help you make informed choices about your health coverage.
Health Insurance Marketplace
A new way to shop for individual and small business health insurance plans as established by the aforementioned ACA. Through the marketplace — which can be found at either healthcare.gov or other marketplaces established by individual states — you can shop online and enroll in a qualified health plan that works for you and your family. The marketplace(s) allow health insurance shoppers to compare health plans and prices on an “apples-to-apples” basis. (Sometimes also referred to as a health insurance exchange)
Health Care Reform
A general term used to refer to the Patient Protection and Affordable Care Act. (See Health Care Law above)
Household income refers to the total amount of money or benefits a family receives by all those residing in the household — generally measured on an annual basis. This income may include wages from a job, investment income, proceeds from a sale, social security benefits etc. Household income in combination with Household size are used to determine eligibility for income based subsidies.
Household size refers to the number of parents, guardians, children under age 19 and caretakers who reside inside one home and are reported on federal income taxes. As mentioned above, household size in combination with household income are used to determine an individual or families eligibility for income based subsidies.
In Person Assistance Personnel Program
Individuals, or in some cases organizations, that are trained to provide assistance to individuals and families, small businesses, as they shop for health insurance options through the Marketplace. The help provided includes such thing as helping them complete eligibility and enrollment forms. In person assisters provide a free service and are required to be unbiased in their suggestions.
Lawfully Present Immigrant
Non-citizens who are living in the United States legally. This status can determine an individuals eligibility to purchase Obamacare health plans on-exchange.
see health insurance marketplace above
A joint federal and state insurance program that serves low income Americans by providing low cost or in some cases Free health coverage. Medicaid eligibility varies from state to state, but is generally available to residents at or below 133% of Federal poverty level.
Medical Loss Ratio
A measure as a percentage of the portion of health insurance premiums get spent on healthcare expenses. A consumer protection as part of the ACA requires requires that health insurance plans sold to individuals and small business employers must spend at least $0.80 of each dollar taken in by the issuer on health care and just $0.20 on administrative costs (such as marketing, commissions and other overhead costs).
Medicare is the federal health insurance program for people who are 65 and over. In addition, certain younger people with disabilities and people with end-stage renal disease can also qualify to receive Medicare benefits. Medicare has four parts, Medicare Parts A, B, C and D, each covering different sets of healthcare benefits.
Also called Medicare Part C, is an alternative to Medicare. Medicare Advantage plans combine Medicare Parts A and B, and sometimes prescription drug coverage (Medicare Part D) into one comprehensive plan. Medicare Advantage Plans can be Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. More about Medicare Advantage Plans
Medicare Supplement Plans
see coverage tiers above
Minimum Essential Coverage (MEC)
The level of coverage that an individual needs to maintain in order to meet the requirement of the individual mandate as set forth in the ACA. This requirement applies to coverage purchased through the health insurance marketplace or other sources of health coverage such as job-based coverage, Medicare, Medicaid, and CHIP among others.
Stakeholders who work closely health insurance marketplace(s) to help health insurance shoppers understand the new health coverage options that have arisen in the new environment that has resulted from the Affordable Care Act. Navigators provide information and assistance in enrolling in health coverage options, but aren’t licensed agents and do not recommend specific plans.
Off – Exchange Plans
Health insurance plans that are not purchased via state or federal insurance marketplaces. More about off-exchange plans.
On – Exchange Plans
Health Insurance plans purchased through the Federal insurance marketplace (healthcare.gov) or a state run marketplace (i.e. Covered California). More about on-exchange health plans
The period of time, each year, set up to allow health insurance shoppers to choose from available plans within the Health Insurance Marketplace. For coverage beginning in 2016, the open enrollment period through the Health Insurance Marketplace begins November 1, 2015 and runs through January 31, 2016. Outside of this window, health insurance shoppers need to have experienced a “qualifying life event (QLE)” in order to enroll in a marketplace health plan. The period outside the annual enrollment window is called the special enrollment period.
A health problem or condition that you had before the date in which your health plan became effective. As a consumer protection that was part of the Affordable Care Act, health insurance companies can no longer deny, or rate health insurance shoppers based on pre-existing health conditions they may have.
Premium Tax Credit
Premium tax credits, or income based premium subsidies, will be offered to some individuals that purchase health coverage through Health Insurance Marketplaces — based on their household income — to help pay for the cost of health coverage. Families with household incomes between 100% and 400% of Federal Poverty Level will generally qualify for some level of subsidy. The tax credit can be applied directly to your monthly premium over the course of the year, or be claimed at the end of the year when taxes are filed.
Private Health Insurance Plans
Private individual health insurance plans are health plans that individuals purchase directly from health insurance carriers who do not have access coverage through their job. Example of private health insurance companies are Anthem, Blue Cross Blue Shield, Aetna, and UnitedHealth. People can buy private health insurance plans directly from the carrier or an agent/broker or through the Health Insurance Marketplace. However, you can only receive premium tax credits by enrolling in on-exchange health plans.
Qualified Health Plan (QHP)
Under the Affordable Care Act (ACA), a health plan that is certified by the Health Insurance Marketplace, or state based exchange. A QHP must provide at a minimum a set of ten essential health benefits, follow established limits on cost-sharing (such as deductibles, copayments and out-of-pocket maximum amounts) and meet other requirements. A qualified health plan will have a certification by each Health Insurance Marketplace in which it is sold. QHPs can fall into one of four Metal Levels (Bronze, Silver, Gold, Platinum) to make it easier for shoppers to compare with other available plans.
Qualifying Life Event (QLE)
After the open enrollment window closes each year, families wishing to sign up for health coverage will need to have experienced a qualifying life event (QLE) within the previous 60 days in order to enroll in a health plan during a time called Special Enrollment Period (see below). Qualifying life events include such things as marriage, childbirth, loss of coverage or other major happenings.
Short Term Health Insurance
Health plans designated to cover their members for a short period of time (generally 30 to 365 days). They are generally significantly more affordable than traditional health plans but do not meet the requirements of qualified health plans, and will not satisfy the individual mandate which requires all Americans to purchase health insurance. More about short term health plans
Small Business Health Options Program (SHOP)
Small Business Health Options Program is a new program that resulted from the ACA designed to simplify the process of finding a health plan for small business, — generally defined as those businesses with 2-50 employees. SHOPs are competitive healthcare marketplaces where small employers can go to find health coverage from a selection of providers. The small business tax credit is only available through SHOP.
Small Business Tax Credit
A tax credit, specifically for small businesses, that in some cases covers as much as 50% of the employers contribution toward healthcare premium costs for eligible employers who have low- to moderate-wage workers. These tax credits will only be available to employers who purchase health insurance for their employees through SHOP
Special Enrollment Period (SEP)
The period of time after the closure of the annual open enrollment period in which health insurance shoppers can enroll in marketplace health coverage provided they have a qualifying life event. More about SEP
In the context of Obamacare, the subsidy is provided to health insurance shoppers to help make health coverage affordable. To qualify for an income based subsidy, families generally need to have an annual household income of between 100% and 400% of the Federal poverty level. An additional type of subsidy called the cost sharing subsidy is available to families with incomes between 100 – 250% of Federal poverty level.
A program intended to promote healthy lifestyles through health and fitness that’s typically offered through the work place as a benefit, although some insurance plans can offer them directly to their enrollees. Some examples of wellness programs include programs to help you stop smoking, diabetes management programs, weight loss programs, and preventative health screenings. etc. Wellness programs in and of themselves do not meet the ACA requirement that all plans contain a list of essential health benefits, and will not protect their members from having to pay the tax penalty if they don’t maintain a qualified health plan.