Health Insurance 101
AultCare is your healthcare advocate and wants to be sure you understand how your health insurance works. Use our resources below to gain a better understanding of your health plan, healthcare terms, and health insurance coverage.
UCR is the standard for determining payment for health insurance claims based on various factors. Most insurance companies will consider the average cost for a medical service within the local area to determine how much it will pay for the service. You will be responsible for whatever the insurance plan does not pay. Opting to select network providers over non-network providers can save you money. Health plans will often pay less to non-network providers because of the inability to control costs.
RBP means a fee level assignment based on a percentage of the allowed amount Medicare would pay for the covered service, or if there is no corresponding Medicare rate for the covered service, a fee level that we have determined to be appropriate for the particular covered service, which often is less than the amount providers actually charge. Your insurance plan does not pay the portion of the non-network provider fees that exceed RBP. You may be responsible for paying the exceeded amount.
Prior authorization is a decision by your health insurer or plan that a treatment plan, healthcare service, prescription medication, or durable medical equipment (DME)is medically necessary. Your health insurance company could require prior authorization before receiving the service or treatment. Emergency situations are an exception. Prior authorization is also known as pre-certification or prior approval.
Should you need emergency services while traveling out of the area you should go to the nearest emergency room or urgent care. CVS MinuteClinics within Ohio are contracted with AultCare if your illness/injury is not an emergency situation. AultCare will process your claims and apply the network level of benefits. UCR will apply. You may need to provide the details of your illness/injury to AultCare to assure your claim processes at network level of benefits.
A medication or treatment for chronic illnesses that require special handling techniques, careful administration, and a unique ordering process. Some specialty medications are considered limited distribution and are only available at certain pharmacies.
Prescription drug coverage is coverage under a plan to help pay for prescription drugs. If the plan’s formulary uses “tiers” (levels), prescription drugs are grouped together; such as generic, brand, preferred, non-preferred and specialty.
A drug formulary is a list of prescription drugs, both generic and brand name, used by practitioners to identify drugs that offer the greatest overall value. A committee of independent, actively practicing physicians and pharmacists maintains the formulary.
If you receive coverage through your employer, you can change your plan during your company’s open enrollment period. You can also change your plan if you experience a qualifying life event. Examples of qualifying life events are marriage, divorce, death, a permanent move, or a job loss. Other events could be considered and you should contact your health plan to see if your event qualifies.
If you have individual and family coverage, you can change your plan during the annual enrollment period. The dates for this period change yearly and could be dependent upon where you live. You can also change your plan if you experience outside the annual enrollment period if you experience a qualifying life event.
You can find out what is covered under your health plan by viewing your Summary of Benefits. You should have received a Summary of Benefits with your enrollment paperwork. You can also find this information by contacting your health plan. If you are an AultCare member, you can find your Summary of Benefits on your online account.
Most health plans must cover preventive services at no cost to you. Preventive services can vary for all adults, women, and children. Examples of preventive services are routine healthcare, including screenings, check-ups and patient counseling. Also included are services to prevent or discover illness, disease or other health problems.
This is plan specific. Members should contact their health plan to confirm.
Here are definitions of healthcare terms:
Allowed Amount: The maximum payment the plan will pay for a covered healthcare service, also called “eligible expense,” “payment allowance,” or “negotiated rate.”
Appeal: A request for a health insurer or plan to review a decision that denies a benefit or payment (either in whole or in part).
Balance Billing: Occurs when a provider bills you for the balance remaining on the bill your plan does not cover. This amount is the difference between the actual billed amount and the allowed amount. For example, if the provider’s charge is $200, and the allowed amount is $110, the provider may bill for the remaining $90. This happens most often when you see an out-of-network provider (non-preferred provider). A network provider (preferred provider) may not bill you for covered services.
Claim: A request for a benefit (including reimbursement of a healthcare expense) made by you or your healthcare provider to your health insurer or plan for items or services you think are covered.
Coinsurance: Your share of the costs of a covered healthcare service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You generally pay coinsurance plus any deductibles you owe. For instance, if the health insurance or 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 insurance or plan pays the rest of the allowed amount.
Complications of Pregnancy: Conditions due to pregnancy, labor, and delivery that require medical care to prevent serious harm to the health of the mother or the fetus. Morning sickness and a non-emergency cesarean section generally are not complications of pregnancy.
Copayment: A fixed amount (for example, $15) you pay for a covered healthcare service, usually when you receive the service. The amount can vary by the type of covered healthcare service.
Cost-Sharing: Your share of costs for services a plan covers that you must pay out of your pocket (sometimes called “out-of-pocket costs”). Some examples of cost-sharing are copayments, deductibles, and coinsurance. Family cost-sharing is the share of the cost for deductibles and out-of-pocket costs you and your spouse and/or child(ren) must pay out of your pocket. Other costs, including your premiums, penalties you may have to pay, or the cost of care a plan does not cover usually are not considered cost-sharing.
Cost-Sharing Reductions: Discounts that reduce the amount you pay for certain services covered by an individual plan you buy through the Marketplace. You may get a discount if your income is below a certain level, and you choose a Silver level health plan or if you are a member of a federally-recognized tribe, which includes being a shareholder in an Alaska Native Claims Settlement Act corporation.
Deductible: An amount you could owe during a coverage period (usually one year) for covered healthcare services before your plan begins to pay. An overall deductible applies to all or almost all covered items and services. A plan with an overall deductible may also have separate deductibles that apply to specific services or groups of services. A plan may also have only separate deductibles. For example, if your deductible is $1000, your plan won’t pay anything until you’ve met your $1000 deductible for covered healthcare services subject to the deductible.
Diagnostic Test: Tests to figure out a health problem. For example, an x-ray can be a diagnostic test to see if you have a broken bone.
Durable Medical Equipment (DME): Equipment and supplies ordered by a healthcare provider for everyday or extended use. DME may include oxygen equipment, wheelchairs, and crutches.
Emergency Medical Condition: An illness, injury, symptom (including severe pain), or condition severe enough to risk serious danger to your health if you do not receive medical attention right away. If you do not receive the immediate medical attention you could reasonably expect one of the following:
1) Your health would be put in serious danger;
2) You would have serious problems with your bodily functions;
3) You would have serious damage to any part or organ of your body.
Emergency Medical Transportation: Ambulance services for an emergency medical condition. Types of emergency medical transportation may include transportation by air, land, or sea. Your plan may not cover all types of emergency medical transportation or may pay less for certain types.
Emergency Room Care / Emergency Services: Services to check for an emergency medical condition and treat you to keep an emergency medical condition from getting worse. Services may be provided in a licensed hospital’s emergency room or other places that provide care for emergency medical conditions.
Excluded Services: Healthcare services that your plan does not pay for or cover.
Formulary: A list of drugs your plan covers. A formulary may include how much your share of the cost is for each drug. Your plan may put drugs in different cost-sharing levels or tiers. For example, a formulary may include generic drug and brand name drug tiers and different cost-sharing amounts will apply to each tier.
FSA Flexible Spending Account (FSA) - An arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars. Allowed expenses include insurance co-payments and deductibles, qualified prescription drugs, insulin, and medical devices.
Grievance: A complaint communicated to your health insurer or plan.
Habilitation Services: Healthcare services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who is not walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient and/or outpatient settings.
Health Insurance: A contract that requires a health insurer to pay some or all of your healthcare costs in exchange for a premium. A health insurance contract may also be called a “policy” or “plan.”
Home Healthcare: Healthcare services and supplies you receive in your home under your doctor’s orders. Services may be provided by nurses, therapists, social workers, or other licensed healthcare providers. Home healthcare usually does not include help with non-medical tasks, such as cooking, cleaning, or driving.
Hospice Services: Services to provide comfort and support for persons in the last stages of a terminal illness and their families.
Hospitalization: Care in a hospital that requires admission as an inpatient and usually requires an overnight stay. Some plans may consider an overnight stay for observation as outpatient care instead of inpatient care.
Hospital Outpatient Care: Care in a hospital that usually does not require an overnight stay.
HRA Health Reimbursement Arrangement (HRA) - HealthReimbursement Arrangements (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement. HealthReimbursement Arrangements are sometimes called Health Reimbursement Accounts.
HSA Health Savings Account (HSA) - A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, co-payments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums.
Individual Responsibility Requirement: Sometimes called the “individual mandate,” the duty you may have to be enrolled in health coverage that provides minimum essential coverage. If you do not have minimum essential coverage, you may have to pay a penalty when you file your federal income tax return unless you qualify for a health coverage exemption.
In-Network Coinsurance: Your share (for example, 20%) of the allowed amount for covered healthcare services. Your share is usually lower for in-network-covered services.
In-Network Co-payment: A fixed amount (for example, $15) you pay for covered healthcare services to providers who contract with your health insurance or plan. In-network co-payments usually are less than out-of-network co-payments.
Marketplace: A marketplace for health insurance where individuals, families and small businesses can learn about their plan options; compare plans based on costs, benefits, and other important features; apply for and receive financial help with premiums and cost-sharing based on income, and choose a plan and enroll in coverage. Also known as an “Exchange.” The Marketplace is run by the state in some states and by the federal government in others. In some states, the Marketplace also helps eligible consumers enroll in other programs, including Medicaid and the Children’s Health Insurance Program (CHIP). Available online, by phone, and in-person.
Maximum Out-of-Pocket Limit: Yearly amount the federal government sets as the most each individual or family can be required to pay in cost-sharing during the plan year for covered, in-network services. Applies to most types of health plans and insurance. This amount may be higher than the out-of-pocket limits stated for your plan.
Medically Necessary: Healthcare services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms, including habilitation, and that meet accepted standards of medicine.
Minimum Essential Coverage: Health coverage that will meet the individual responsibility requirement. Minimum essential coverage generally includes plans, health insurance available through the Marketplace or other individual market policies, Medicare, Medicaid, CHIP, TRICARE, and certain other coverage.
Minimum Value Standard: A basic standard to measure the percent of permitted costs the plan covers. If you’re offered an employer plan that pays for at least 60%of the total allowed costs of benefits, the plan offers minimum value and you may not qualify for premium tax credits and cost-sharing reductions to buy a plan from the Marketplace.
Network: The facilities, providers, and suppliers your health insurer or plan has contracted with to provide healthcare services.
Network Provider (Preferred Provider): A provider who has a contract with your health insurer or plan which has agreed to provide services to members of a plan. You will pay less if you see a provider in the network. Also called “preferred provider” or “participating provider.”
Orthotics and Prosthetics: Leg, arm, back, and neck braces, artificial legs, arms, and eyes, and external breast prostheses after a mastectomy. These services include: adjustment, repairs, and replacements required because of breakage, wear, loss, or a change in the patient’s physical condition.
Out-of-Network Coinsurance: Your share (for example, 40%) of the allowed amount for covered healthcare services to providers who do not contract with your health insurance or plan. Out-of-network coinsurance usually costs you more than in-network coinsurance.
Out-of-Network Copayment: A fixed amount (for example, $30) you pay for covered healthcare services from providers who do not contract with your health insurance or plan. Out-of-network copayments usually are more than in-network copayments.
Out-of-Network Provider (Non-Preferred Provider): A provider who does not have a contract with your plan to provide services. If your plan covers out-of-network services, you will usually pay more to see an out-of-network provider than a preferred provider. Your policy will explain what those costs may be. May also be called “non-preferred” or “non-participating” instead of “out-of-network provider.”
Out-of-Pocket Limit: The most you could pay during a coverage period (usually one year) for your share of the costs of covered services. After you meet this limit the plan will usually pay 100% of the allowed amount. This limit helps you plan for healthcare costs. This limit never includes your premium, balance-billed charges, or healthcare your plan does not cover. Some plans do not count all of your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit.
Physician Services: Healthcare services a licensed medical physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), provides or coordinates.
Plan: Health coverage issued to you directly (individual plan) or through an employer, union, or other group sponsors (employer group plan) that provides coverage for certain healthcare costs. Also called “health insurance plan,” “policy,” “health insurance policy,” or “health insurance.”
Preauthorization: A decision by your health insurer or plan that a healthcare service, treatment plan, prescription drug, or durable medical equipment (DME) is medically necessary. Sometimes called prior authorization, prior approval, or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization is not a promise; your health insurance or plan will cover the cost.
Premium: The amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly, or yearly.
Premium Tax Credits: Financial help that lowers your taxes to help you and your family pay for private health insurance. You can get this help if you receive health insurance through the Marketplace and your income is below a certain level. Advance payments of the tax credit can be used right away to lower your monthly premium costs.
Prescription Drug Coverage: Coverage under a plan that helps pay for prescription drugs. If the plan’s formulary uses “tiers” (levels), prescription drugs are grouped by type or cost. The amount you’ll pay in cost-sharing will be different for each “tier” of covered prescription drugs.
Prescription Drugs: Drugs and medications that by law require a prescription.
Preventive Care (Preventive Service): Routine healthcare, including screenings, check-ups, and patient counseling, to prevent or discover illness, disease, or other health problems.
Primary Care Physician (PCP): A physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), who provides or coordinates a range of healthcare services for you.
Primary Care Provider: A physician, including an M.D. (Medical Doctor)or D.O. (Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist, or physician assistant, as allowed under state law and the terms of the plan, which provides coordinates, or helps you access a range of healthcare services.
Provider: An individual or facility that provides healthcare services. Some examples of a provider include a doctor, nurse, chiropractor, physician assistant, hospital, surgical center, skilled nursing facility, and rehabilitation center. The plan may require the provider to be licensed, certified, or accredited as required by state law.
Reconstructive Surgery: Surgery and follow-up treatment are needed to correct or improve a part of the body because of birth defects, accidents, injuries, or medical conditions.
Referral: A written order from your Primary Care Provider for you to see a specialist or receive certain healthcare services. In many Health Maintenance Organizations (HMOs), you need to obtain a referral before you can receive healthcare services from anyone except your Primary Care Provider. If you do not receive a referral first, the plan may not pay for the services.
RBP Reference Based Pricing (RBP)- refers to the allowable fees for covered services. In regards to a non-network provider, RBP is a fee level assigned based on a percentage or multiple of the allowed amount Medicare would pay for a covered service.
Rehabilitation Services: Healthcare services that help a person keep, get back, or improve skills and functioning for daily living that has been lost or impaired because a person was sick, hurt, or disabled. These services may include physical and occupational therapy, speech-language pathology, and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.
Screening: A type of preventive care that includes tests or exams to detect the presence of something, usually performed when you have no symptoms, signs, or prevailing medical history of a disease or condition.
Skilled Nursing Care: Services performed or supervised by licensed nurses in your home or in a nursing home. Skilled nursing care is not the same as “skilled care services,” which are services performed by therapists or technicians (rather than licensed nurses) in your home or in a nursing home.
Specialist: A provider focusing on a specific area of medicine or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions.
Specialty Drug: A type of prescription drug that, in general, requires special handling or ongoing monitoring and assessment by a healthcare professional, or is relatively difficult to dispense. Generally, specialty drugs are the most expensive drugs on a formulary.
UCR (Usual, Customary, and Reasonable): The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount.
Urgent Care: Care for an illness, injury, or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.
Premium, Deductible, and Coinsurance