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A

Adjusted community rating - Adjusted community rating is between individual age rating (under which each person has their own premium), and pure community rating (under which there is only one premium applicable to all). "Adjusted community rating, allowing variation for age" permits rates that vary by age, but the highest premium cannot be more than double the lowest premium (2:1 max).

Annual limit - Many health insurance plans place dollar limits upon the claims the insurer will pay over the course of a plan year. PPACA prohibits annual limits for essential benefits for plan years beginning after Sept. 23, 2010.1

C

Coinsurance - A percentage of a health care provider's charge for which the patient is financially responsible under the terms of the policy.1

Community rating - A way of pricing insurance where every policyholder pays the same premium, regardless of health status, age or other factors.1

E

Essential health benefits - PPACA requires all health insurance plans sold after 2014 to include a basic package of benefits including hospitalization, outpatient services, maternity care, prescription drugs, emergency care and preventive services among other benefits.1

Exchanges - see Marketplaces

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G

Grandfathered status - Health insurance plans in effect as of March 23, 2010, are grandfathered under the health care reform law and will be considered "qualified coverage" that meets the mandate to have health insurance that begins January 2014.1 Plans will lose their grandfathered status if they choose to make significant changes that reduce benefits or increase costs to consumers.2 Employees and dependents can be added to a plan without losing grandfathered status.1 Many other details not listed here could affect grandfathered status, so it is important to research the decision to change plans.

Guaranteed issue - Guaranteed issue is the right to purchase insurance without a physical examination; the present and past physical condition of the applicant are not considered.

H

Health Insurance Marketplace - Health Insurance Marketplace (formerly called Exchanges) are entities that organize the market for health insurance by assembling individuals and small businesses into larger pools that spread the risk for insurance companies, while facilitating the availability, choice and purchase of health insurance.

Health Savings Account (HSA) - The Medicare bill signed by President Bush on Dec. 8, 2003 created HSAs. Individuals covered by a qualified high deductible health plan (HDHP) (and have no other first dollar coverage) are able to open an HSA on a tax preferred basis to save for future qualified medical and retiree health expenses. Additional information about HSAs can be found on the U.S. Treasury Web site: http://www.treasury.gov/resource-center/faqs/Taxes/Pages/Health-Savings-Accounts.aspx.1

High risk pool - A state-subsidized health plan that provides coverage for individuals with pre-existing health care conditions who cannot purchase it in the private market. PPACA creates a temporary federal high risk pool program, administered by the states, to provide coverage to individuals with pre-existing conditions who have been uninsured for at least 6 months.1

I

Individual mandate - A requirement that everyone maintain health insurance coverage. PPACA requires that everyone who can purchase health insurance for less than 8% of their household income do so or pay a tax penalty.1

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L

Lifetime limit - Many health insurance plans place dollar limits upon the claims that the insurer will pay over the course of an individual's life. PPACA prohibits lifetime limits on benefits beginning on Sept. 23, 2010.1

Limited benefits plan - A type of health plan that provides coverage for only certain specified health care services or treatments or provides coverage for health care services or treatments for a certain amount during a specified period.1

Long-term care insurance - Long-term care insurance provides coverage for the day-to-day care that a person receives in a nursing facility or in his or her residence following an illness or injury, or in old age, such that the person can no longer perform at least two of the five basic activities of daily living (ADLs): walking, eating, dressing, using the bathroom and mobility from one place to another. Benefits paid under a long-term care insurance policy will typically be subject to a waiting period (for example, 90 days); a benefit period (for example, 5 years); and a daily amount (for example, $100 per day). The combination of these benefit provisions help to determine the premium to be paid for such a policy.

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M

Mandated benefit - A requirement in state or federal law that all health insurance policies provide coverage for a specific health care service.1

Marketplaces - Marketplaces are an online portal for consumers and small business owners to determine their eligibility for private health insurance and public programs such as Medicaid and CHIP. Marketplaces also assist individuals in applying for subsidies to help pay for the cost of health insurance. For Marketplace assistance, call 1-800-318-2596; hearing impaired callers using TTY/TDD technology can dial 1-855-889-4325. HealthCare.gov is the website for the Health Insurance Marketplace. Note: Dec. 23, 2013 was the deadline to enroll in a plan to be effective Jan. 1, 2014. Individuals must enroll in a plan by March 31, 2014 to avoid the individual mandate penalty.

Medical loss ratio - The percentage of health insurance premiums that are spent by the insurance company on health care services. PPACA requires that large group plans spend 85% of premiums on clinical services and other activities for the quality of care for enrollees. Small group and individual market plans must devote 80% of premiums to these purposes.1

Medicare Advantage - An option Medicare beneficiaries can choose to receive most or all of their Medicare benefits through a private insurance company. Also known as Medicare Part C. Plans contract with the federal government and are required to offer at least the same benefits as original Medicare, but may follow different rules and may offer additional benefits. Unlike original Medicare, enrollees may not be covered at any health care provider that accepts Medicare, and may be required to pay higher costs if they choose an out-of-network provider or one outside of the plan's service area.1

Medicare Part D - Medicare offers prescription drug coverage for everyone with Medicare through this program. Medicare prescription drug coverage is obtained by joining a Part D plan (sometimes called PDPs) offered by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. In addition to obtaining Medicare prescription drug coverage by enrolling in a Part D plan, coverage can also be obtained by purchasing a Medicare Advantage plan, which includes prescription drugs as part of their benefit package (sometimes called MA-PDs).

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Medicare Supplement (Medigap) Insurance - Private insurance policies that can be purchased to "fill-in the gaps" and pay for certain out-of-pocket expenses (like deductibles and coinsurance) not covered by original Medicare (Part A and Part B).1

N

Navigator - Individuals and/or groups who help insurance consumers establish eligibility and enroll in a plan on the Marketplace. Navigators perform outreach and education duties and are funded by federal grants. They must meet federal training and certification requirements. See North Dakota's Navigators.

Nongrandfathered - Most health insurance plans that existed on March 23, 2010 are eligible for grandfathered status and therefore do not have to meet all the requirements of the health care law. But if an insurer or employer makes significant changes to a plan's benefits or how much members pay through premiums, copays or deductibles, then the plan loses that status.

Both individual and group plans can be grandfathered. If you get coverage through an employer, you can join a grandfathered plan even if you weren't enrolled on March 23, 2010.3

P

Patient Protection and Affordable Care Act (PPACA) - Legislation (Public Law 111-148) signed by President Obama on March 23, 2010. Commonly referred to as the health reform law.1

Preexisting condition exclusion - The period of time that an individual receives no benefits under a health benefit plan for an illness or medical condition for which an individual received medical advice, diagnosis, care or treatment within a specified period of time prior to the date of enrollment in the health benefit plan. PPACA prohibits pre-existing condition exclusions for all plans beginning January 2014.1

Preventive benefits - Covered services that are intended to prevent disease or to identify disease while it is more easily treatable. PPACA requires insurers to provide coverage for preventive benefits without deductibles, co-payments or coinsurance.1

Provider -A health care provider, most commonly referring to a physician.

Q

Qualified health plan - A health insurance policy that is sold through the Marketplace. PPACA requires Marketplaces to certify that qualified health plans meet minimum standards contained in the law.1

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R

Reinsurance - Insurance purchased by insurers from other insurers to limit the total loss an insurer would experience in case of a disaster or unexpectedly high claims. PPACA directs states to create temporary reinsurance programs to stabilize their individual markets during the implementation of health reform.1

Rescission - The process of voiding a health plan from its inception usually based on the grounds of material misrepresentation or omission on the application for insurance coverage that would have resulted in a different decision by the health insurer with respect to issuing coverage. PPACA prohibits rescissions except in cases of fraud or intentional misrepresentation of a relevant fact.1

S

Secretary of Health and Human Services - Head of the United States Department of Health and Human Services. Also referred to as "Secretary" and "Secretary of HHS."

Self-insured - Group health plans may be self-insured or fully insured. A plan is self-insured (or self-funded) when the employer assumes the financial risk for providing health care benefits to its employees. A plan is fully insured when all benefits are guaranteed under a contract of insurance that transfers that risk to an insurer.1


Source
1 National Association of Insurance Commissioners
2 Healthcare.gov
3 Kaiser Health News

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North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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