Speak insurance fluently

The Plain-English Insurance Glossary

Every term you'll meet while shopping — deductibles, MOOP, formularies and more — defined without the jargon.

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Never Get Lost in the Jargon Again

Every term below is written the way we'd explain it across the kitchen table.

Costs

Premium

The fixed amount you pay every month to keep your coverage active — whether or not you use care.

Deductible

What you pay out of pocket for covered care before your plan starts sharing the cost.

Copay

A flat fee you pay for a specific service, like $30 for a doctor visit.

Coinsurance

Your percentage share of a covered cost after you’ve met your deductible — for example, 20%.

Out-of-pocket maximum

The most you’ll pay in a year for covered care. After you hit it, the plan pays 100%.

Premium tax credit

A subsidy that can lower your monthly Marketplace premium based on income and household size.

Cost-sharing reduction (CSR)

Extra savings on Silver Marketplace plans that lower your deductible, copays and out-of-pocket max if your income qualifies.

Plan types

HMO

A Health Maintenance Organization plan that uses a local network and usually requires a primary care doctor and referrals to specialists.

PPO

A Preferred Provider Organization plan that lets you see any provider without referrals and offers some out-of-network coverage, usually at a higher premium.

EPO

An Exclusive Provider Organization plan with no referral requirement that covers only in-network care except in emergencies.

High-deductible health plan (HDHP)

A plan with lower premiums and a higher deductible that can be paired with a tax-advantaged Health Savings Account.

Health Savings Account (HSA)

A tax-advantaged account you can use to pay medical costs, available only with an HSA-eligible high-deductible plan.

ACA & Marketplace

ACA Marketplace

The government-run exchange where individuals and families shop for ACA-compliant plans and apply for income-based subsidies.

Metal tiers

Marketplace plans are grouped Bronze, Silver, Gold and Platinum by how they split costs — Bronze has lower premiums and higher out-of-pocket costs, Platinum the reverse.

Essential health benefits

Ten categories of care every ACA plan must cover, including hospitalization, prescriptions, maternity, mental health and preventive services.

Open Enrollment Period

The yearly window when anyone can enroll in or change a Marketplace plan without needing a qualifying life event.

Special Enrollment Period (SEP)

A window outside Open Enrollment when you can enroll after a qualifying life event such as losing coverage, marriage, a move or a new baby.

Qualifying life event

A change — like losing job-based coverage, having a child or moving — that opens a Special Enrollment Period.

Medicare

Medicare Part A

Hospital insurance covering inpatient stays, skilled nursing, hospice and some home health care. Most people pay no premium for Part A.

Medicare Part B

Medical insurance covering doctor visits, outpatient care, preventive services and durable medical equipment, for a monthly premium.

Medicare Advantage (Part C)

An all-in-one alternative to Original Medicare from private insurers that bundles Part A and B and often Part D, frequently with extra benefits.

Medicare Part D

Prescription drug coverage sold by private insurers, either standalone or built into a Medicare Advantage plan.

Medigap (Medicare Supplement)

A private policy that pays some of the out-of-pocket costs Original Medicare leaves behind, such as deductibles and coinsurance.

Initial Enrollment Period (IEP)

The 7-month window around your 65th birthday — three months before, your birthday month, and three months after — when you first sign up for Medicare.

Annual Enrollment Period (AEP)

October 15 to December 7 each year, when you can join, switch or drop Medicare Advantage and Part D plans for the next year.

Guaranteed issue

A right to buy certain Medigap policies without medical underwriting, so you can’t be denied or charged more for health reasons.

Star rating

A 1-to-5 quality score Medicare assigns to Advantage and Part D plans based on care, service and member experience.

Other coverage

Short-term health insurance

Temporary, lower-cost coverage that bridges a gap between plans. It is not ACA-compliant and may exclude pre-existing conditions.

Fixed indemnity plan

A plan that pays a set cash amount for covered events regardless of the actual bill. It is a supplement, not major medical coverage.

ICHRA

An Individual Coverage Health Reimbursement Arrangement lets employers give workers a tax-free allowance to buy their own individual plans.

Section 125 plan

A cafeteria plan that lets employees pay certain premiums with pre-tax dollars, lowering payroll taxes for the worker and the employer.

Using your plan

Network

The doctors, hospitals and pharmacies your plan has contracted with for the best rates. In-network care costs you less.

Formulary

A plan’s list of covered prescription drugs, usually grouped into cost tiers.

Prior authorization

Approval a plan requires before it will cover certain drugs, tests or procedures considered non-emergency.

Explanation of Benefits (EOB)

A statement from your insurer — not a bill — showing what was billed, what the plan paid, and what you may owe.