Health Insurance Enrollment Terms:

  • Special Enrollment Period (SEP):
    A time outside of Open Enrollment when you can sign up for health insurance due to a qualifying life event (e.g., loss of coverage, marriage, birth of a child, move).

  • Open Enrollment Period (OEP):
    The annual window (usually in the fall) when you can enroll in, renew, or change your health insurance plan for the upcoming year.

  • On-Exchange:
    Health plans purchased through a government marketplace (like Healthcare.gov or a state exchange). These plans may be eligible for premium tax credits or subsidies.

  • Off-Exchange:
    Health plans purchased directly from insurance companies, outside of the marketplace. These may offer similar coverage but don’t qualify for government subsidies.

  • ACA (Affordable Care Act):
    A federal law that sets minimum standards for health insurance, including coverage for pre-existing conditions and essential health benefits.

  • ACA-Compliant Plans:
    Health insurance policies that meet the standards of the Affordable Care Act, such as covering preventive services and not charging more for pre-existing conditions.

Common Health Insurance Terms Explained

  • Co-Pay: A fixed amount you pay for a specific medical service (like a doctor visit or prescription), usually due at the time of service.

  • Co-Insurance: The percentage of medical costs you share with your insurance after meeting your deductible. Example: You pay 20%, your insurance pays 80%.

  • Deductible: The amount you must pay out-of-pocket for covered services before your insurance starts paying.

  • Maximum Out-of-Pocket (Max OOP): The most you’ll pay in a year for covered services. After you reach this limit, your insurance covers 100% of approved costs.

  • Doctors Network (Provider Network): A group of doctors, hospitals, and facilities that have agreed to provide services at negotiated rates for your plan. Using in-network providers saves you money.

  • PPO (Preferred Provider Organization): A flexible plan that lets you see any doctor, including specialists, without a referral. You can see out-of-network providers, but at a higher cost.

  • HMO (Health Maintenance Organization): A plan that requires you to choose a primary care doctor and get referrals to see specialists. Generally lower cost, but less flexibility.

  • Medicare: A federal health insurance program for people age 65 and older, and for certain younger individuals with disabilities or specific conditions.

  • Medicaid: A state and federally funded program that provides health coverage to eligible low-income individuals and families.

  • Medi-Cal: California’s version of Medicaid. It offers free or low-cost health coverage to eligible California residents, including families, seniors, and people with disabilities.

    Prescription Drug (Rx) Insurance Terms Explained

    • Rx Deductible:
      The amount you must pay out-of-pocket for prescriptions before your plan starts to share the cost.

    • Rx Tiers of Medication:
      Medications are grouped by cost and type:

      • Tier 1: Generic (lowest cost)

      • Tier 2: Preferred brand-name

      • Tier 3: Non-preferred brand-name

      • Tier 4: Specialty or high-cost drugs
        The higher the tier, the more you typically pay.

    • Rx Network (Pharmacy Network):
      A group of pharmacies that your plan works with. Using in-network or preferred pharmacies usually saves you money.

    • Mail-Order Pharmacy:
      A convenient service where you can receive a 90-day supply of your medications by mail—often at a lower cost or with fewer trips to the pharmacy.

    • 90 Days for the Price of 60:
      Some plans offer cost savings on maintenance medications, allowing you to get a 90-day supply for what you'd normally pay for just 60 days at a retail pharmacy.

    • Prior Authorization:
      A requirement that your doctor or pharmacist must get approval from the insurance company before certain medications will be covered.

    • Formulary (Drug List):
      A list of medications your insurance plan covers. It includes which tier each drug falls into, and whether there are preferred alternatives.

    • Generic vs. Brand-Name Drugs:

      • Generic: Same active ingredients as brand-name drugs but typically much cheaper.

      • Brand-Name: The original patented version of a drug, often more expensive.
        Most plans encourage using generics when available.