Marketplace (ACA) Exchange

On-exchange ACA plans are the only plans for which advanced premium tax credits and cost-sharing reductions (i.e., government subsidies for qualifying applicants) are available.

When shopping for a suitable health insurance plan that fits you; it is important to keep in mind the key features that help you decide your budget for health care. These are allocated into five major features:

Premium: a premium is your monthly bill. Every month a premium is paid to a health insurance company; to access the health insurance plan. However, it is not equal to the amount you pay for the health care services.

*You need to understand that choosing a plan with a lower premium will anticipate higher costs toward the out-of-pocket medical bills.

Deductible: Deductibles are the out-of-pocket costs you pay to utilize health care services before the health insurance takes effect. Once the deductible is paid, the health insurance company will use the copayments and coinsurance to split costs with you (up to the out of pocket maximum, after which the plan pays for 100 percent of the services).

*Plans with lower premiums tend to have higher deductibles.

Copayment: A copayment is a fixed amount paid for a specific service or prescribed medication. Copayments are one of the ways that health insurers will split costs with you after you achieve the plan deductible. In addition, you may have copayments on specific services before you reach your deductible.

*For example, many health insurance plans will have copayments for doctor’s visits and prescription drugs before you reach your targeted deductible. You will pay copayments until you arrive at your maximum out-of-pocket limit.

Coinsurance: Coinsurance is another way that health insurers will split costs with you. Unlike a copayment, coinsurance isn’t a fixed cost (it’s a percentage of the cost that you pay for covered services.)

*For example, if you have a coinsurance of 20 percent, you’ll pay 20 percent of the cost of covered services until you reach your out-of-pocket limit.

Maximum out-of-pocket amount: The maximum out-of-pocket amount, is the maximum amount a consumer pays for covered health care services in a year. Payments made toward your deductible, as well as any copayments and coinsurance payments, go toward your out-of-pocket limit and monthly premiums do not count. Plans with higher premiums tend to have lower out-of-pocket limits.

*Note: maximum out-of-pocket is a consumer protection enacted under the ACA; previously plans didn’t have to cap what a person would be required to spend on health care services. This often meant that insured people who had to undergo very expensive treatments (e.g., for cancer or lifesaving surgery) could face unlimited medical bills.

(PPO) Preferred Provider Organization

PPO plans are the least restrictive types of plan when it comes to accessing network of providers and receiving care from outside the plan’s network. Typically, you have two options choosing between:

*An in-network doctor, who can you see at a lower cost

*An out-of-network doctor at a higher cost. You do not need a referral to see a specialist, though you may still choose a primary care physician (some states, like California, may require having a primary care physician).

PPO plans typically have more expensive premiums than other types of private health insurance plans.

(HMO) Health Maitenance Organization

HMO plans are actually networks of doctors and hospitals who agree to give the insured lower rates. The ability to see out-of-network providers is very limited, although they exist. They offer the following:

*When you need to see a specialist or get tests done, you first need a primary care physician to refer you. There may be exceptions.

*There is no coverage offered if you opt to see an out of network provider.
Premiums are lower in average.

(EPO) Exclusive Provider Organization

EPO plans are a mix of HMO and PPO plans. An EPO plan consists of the following:

*Gives the option of seeing a specialist without having to provide a referral

*EPO plans have more expensive premiums compared to HMOs

*EPO plans have cheaper premiums than PPO’s

Note: EPO plans do not cover out-of-network physicians.