Key Health Insurance Terms

Affordable Care Act (ACA): The legislation approved by Congress and upheld by the Supreme Court that requires all individuals to purchase health insurance, creates new standards for health insurance, and designed marketplaces for individuals to shop for affordable health insurance plans.

Annual limit: Some insurance plans place dollar amounts limiting the amount an insurer will pay over a year. The Affordable Care Act forbids annual limits for the ten essential health benefits.

Coinsurance: The portion of cost for which the patient is responsible for a given medical service, usually expressed as a percentage. For example, the cost of an X-ray may be $100; insurance pays $80, and the patient pays $20 (coinsurance).

Co-pay: A fixed dollar amount the patient pays for a medical service visit, such as $10 for a doctor’s office visit.

Deductible: The amount a patient must pay for medical services before insurance will begin to contribute toward claims.

Essential benefits: The Affordable Care Act requires that all health insurance plans cover ten areas of medical services, including: Ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health care (including substance abuse treatment); prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness care; and pediatric services.

Exchange: The online marketplace where citizens can shop for health insurance or determine if they are eligible for Medicaid. In Kentucky, the exchange is known as kynect, and can be accessed online, by phone, or through in-person kynectors available in every county.

Kynect: Kentucky’s marketplace for health insurance. kynect will provide individuals, families and small businesses with easy, one-stop shopping to find the healthcare coverage you need. By using kynect, you may receive payment assistance, special discounts or tax credits to help cover the costs of coverage for you, your family or your employees. kynect will allow you to compare and select insurance plans and find out if you qualify for programs like Medicaid or the Kentucky Children’s Health Insurance Program. kynect is available at; 1-855-4kynect (459-6328) or in-person with kynectors, located across the state in places like public health departments.

Lifetime limit: Before the Affordable Care Act, some health insurance plans placed limits on how much the insurer would pay over the course of an individual’s lifetime. That practice is now prohibited.

Medical loss ratio: Health insurance companies are now required to spend the majority of their premiums to pay for health care services, not overhead or administrative costs. Insurers that don’t meet that standard (85 percent for large group plans, 80 percent for small group and individual markets) will be required to pay back some funds to their policyholders.

Open enrollment period: The dates during which individuals, families, or small businesses can shop for health insurance plans on the exchange. In Kentucky, kynect offers open enrollment beginning Oct. 1, 2013, through March 31, 2014. Individuals who purchase health insurance by Dec. 15, 2013, will have their plan activated effective Jan. 1, 2014.

Out-of-pocket limit: The top dollar amount an individual or family can pay for health services, outside of premiums, out-of-network provider costs or services not covered by the plan. Under ACA, annual out-of-pocket limits beginning in 2014 are $5,950 for individuals and $11,900 for families.

Premium: The periodic cost of keeping health insurance active; often paid monthly. Under kynect, most Kentuckians are eligible for a discount that lowers the monthly premium.