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Health Insurance FAQ

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Health Insurance 101

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It’s a way to pay for health and medical care. Health insurance is also known as a health plan or “benefit program.” You pay a monthly fee or a “premium” to keep your health insurance.

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Health insurance protects you from unexpected and high costs due to a hospital stay or treatment for an injury or when you are sick. Your health insurance plan could help pay for some or even all of these costs.

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Insurance pays for covered services. Your benefit plan documents will show the services your insurance carrier will pay for or “cover.” There are also “non-covered services” or services that your insurance carrier will not pay. 

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The insurance carrier pays a portion of your medical costs with the premium money from all the people they insure. In the same way, your premium helps pay medical costs for others when they need it. You lose your insurance if you do not pay your premium.

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Additional costs outside of the premium are called out-of-pocket costs. Below are some kinds of out-of-pocket.

You may have to pay a “deductible.” A deductible is the amount you pay each year toward health care costs before the insurance company pays. When you meet your deductible, your insurance begins to cover a portion of costs. Example: Your deductible is $500. Your insurance pays for your claims after you have paid the first $500 in medical costs. Some services will be paid even though you have not met your deductible. Preventive and other wellness screenings may be covered before you meet your deductible.

A “co-payment” or “co-pay” is another out-of-pocket cost you may need to pay. The co-pay is the fee that you pay at the doctor or facility office.

You may also have “coinsurance” or “cost-sharing” costs. Coinsurance is the cost you pay for a medical service when you get it. Coinsurance applies after you reach your deductible. For example, if your health plan has a 20% coinsurance, you pay $20 of a $100 doctor bill. The insurer pays the remaining $80.

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The Medical Loss Ratio (MLR) requires that insurance companies spend a certain percentage of premium dollars on medical claims and activities to improve care quality. Rebates are due to members if an insurer fails to meet minimum loss ratios of 80 percent in the individual and small group markets. For each calendar year, Capital BlueCross and its affiliates will calculate and pay rebates, if required, to eligible policyholders prior to August 1 of the following calendar year.

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Marketplace and Metal Levels

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Each health plan group is named for a color of metal, called “metal level.” The colors also signify the level of coverage they give: Bronze, Silver, Gold and Platinum. Metal levels show the amount of cost you pay under your health plan and the amount of cost the insurer pays. Your cost is in addition to your premium.

Bronze
Silver Gold
Platinum
Catastrophic
Actuarial value of 60%. This means it's designed to pay 60% of essential health benefits across all the people covered by this type of plan. Members as a whole pay 40%. Lowest monthly premium of all metal levels; least generous cost coverage
Actuarial value of 70%. This means that it's designed to pay 70% of essential health benefits across all the people covered by this type of plan. Members as a whole pay 30%.
Actuarial value of 80%. This means that it's designed to pay 80% of essential health benefits across all the people covered by this type of plan. Members as a whole pay 20%.
Actuarial value of 90%. This means that it's designed to pay 90% of essential health benefits across all the people covered by this type of plan. Members as a whole pay 10%. Highest monthly premium of all metal levels; most generous cost coverage.
Requires you to pay all medical costs up to a specific limit before insurance company begins payment of your covered services. The specified limit is usually several thousand dollars. Low monthly premium.

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Compare metal levels.

Think about the premium price that will work best for your budget. Your premium will be lower if you choose to pay MORE when you go for doctor visits or medications. The premium will be higher if you choose to pay LESS at the time of a doctor visit or for medicine.

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How you get care and how it’s paid differs from one type of plan to another.

Health Maintenance Organization (HMO): HMO health plans limit the number of doctors, hospitals and medical providers from which you can get care. Network providers agree to a pre-set dollar amount that will be paid for services. This pre-set amount helps keep costs down — a network provider cannot charge more.

  • If you use a provider that is not in the network, you may have to pay the whole cost. HMO plans do not pay benefits for services provided by out-of-network providers.
  • You must choose a primary care doctor to guide all your health care decisions. That includes seeing other doctors, or referral.
  • There is a premium.
  • Co-pays go toward out-of-pocket requirements.
  • You may have a co-pay for services, like doctors’ visits.

Preferred Provider Organization (PPO): This type of health plan generally has more doctors, hospitals and medical providers in its network than an HMO plan. You can seek care in or out of the provider network.

  • You pay more for out of network care. But you don’t need to choose a primary care doctor or get referrals.
  • Some paperwork. You submit claims forms for out of network services.
  • You pay a premium, plus yearly deductible, coinsurance and co-pay charges.
  • Co-pay amounts get applied toward the deductible.
  • You may have to pay a balance for out-of-network provider charges once your health plan pays its share of costs.

Catastrophic Health Insurance Plan: Catastrophic (CAT) plans are designed for people under 30. These plans also cover the core essential benefits of the law. There may be cases of low income where individuals, regardless of age, could get a CAT plan. A CAT plan is minimum “just in case” insurance to cover a major accident or serious illness.

  • Usually a lower premium than other types of health plans
  • High deductible and high out-of-pocket charges
  • Full coverage for first three primary care doctor office visits only

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Health Insurance Marketplace Subsidy

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The government has different guidelines for different levels of income. If you are eligible, you must buy a Federal Marketplace qualified health plan to get the subsidy. To determine and confirm a subsidy, please visit the Health Insurance Marketplace Subsidy website.

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Your income determines eligibility. If you aren’t eligible, you’ll need to pay the whole cost of the premium.

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A subsidy might pay all, most or only part of the premium cost for a health plan.

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The exact amount of subsidy is determined by the government. For an estimate of the subsidy you are eligible to receive, please visit our subsidy estimator. You can also determine eligibility for a subsidy on the Health Insurance Marketplace Subsidy website.