Terms & Definitions
Open Enrollment packets are often dense and packed with acronyms. If you’re stumped on definitions or struggling to keep all the acronyms straight, keep this guide handy as you work through the open enrollment process.
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The 2010 health law that expanded coverage, created the Health Insurance Marketplace, and offers financial assistance to make insurance more affordable.
Example/Additional Information: Allows you to shop for plans on Healthcare.gov or your state marketplace. Offers financial help (subsidies) to lower monthly premiums. Requires all ACA‑compliant plans to cover the 10 “Essential Health Benefits” (Outpatient care/doctors visits, Emergency services, Hospitalization/inpatient care, Maternity care, Pediatric care, Mental health, Prescriptions, Rehabilitative services/devices, Laboratory services, Preventive and wellness services and chronic disease management (think screenings/vaccines).
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Third‑party programs that help cover expensive drugs when insurance won’t.
Example/Additional Information: A nonprofit steps in to pay for your rare‑disease medication.
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Extra financial help that lowers the costs you pay when you actually use care — things like deductibles, copays, and coinsurance. Only available if your income qualifies and you choose a Silver plan on the Marketplace.
Example/Additional Information:
At the doctor’s office → your copay for a visit might drop from $40 to $10.
At the pharmacy counter → instead of paying $50 for a prescription, you might pay $15.
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The percentage you pay after meeting your deductible.
Example/Additional Information: Insurance pays 80%, you pay 20% of the bill.
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A flat fee you pay each time you get care.
Example/Additional Information: $20 when you see your doctor, $10 for a prescription.
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A restriction that prevents manufacturer coupons from counting toward your deductible or out‑of‑pocket maximum.
Example/Additional Information: Assistance is front‑loaded, so if you have $6,000 in support it gets applied right away and is often depleted by spring. After that, you’re suddenly responsible for the full cost, and even if a drug company pays $500 for your medicine, your deductible remains untouched.
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Similar to a copay accumulator, but structured differently. This program spreads manufacturer copay assistance (coupons/cards) evenly across the benefit year.
The assistance covers your copays, but none of it counts toward your deductible or out‑of‑pocket maximum.
Example/Additional Information: A $6,000 coupon is divided into $500 per month, making your copays look covered. However, none of the assistance reduces your deductible or out‑of‑pocket maximum, and once the coupon runs out you face the full cost.
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The amount you pay out of pocket before insurance starts helping.
Example/Additional Information: You pay the first $2,000 of medical bills yourself, then insurance kicks in. ($ varies per plan)
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Medications listed in formulary that are not covered by the plan at all, regardless of medical need.
Example/Additional Information: Your plan excludes weight-loss drugs, so you must pay the full cost out of pocket.
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The 10 basic services every ACA plan must cover.
Example/Additional Information: Minimum coverage includes doctor visits, hospital care, prescriptions, maternity, mental health, kids’ dental/vision, emergency services, rehabilitative services, lab services, and preventive/wellness services.
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Insurance offered through your job, often with employer paying part of the premium.
Example/Additional Information: Your company pays half your monthly premium, you pay the rest.
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Cheaper premiums, but only covers in‑network care (except emergencies).
Example/Additional Information: If your doctor isn’t in the network, you pay the full bill.
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A special account for medical or dependent care costs, offered through your employer.
Example/Additional Information: You put in pre‑tax money to cover things like copays, prescriptions, or childcare. Employer sets limits. Usually “use it or lose it” at the end of the year.
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The official list of prescription drugs your health plan covers, organized by cost tiers.
Example/Additional Information: The tier your medication is placed in determines how much you pay (lower tiers = cheaper, higher tiers = more expensive).
Your asthma inhaler might be Tier 2 ($30), while a newer specialty drug is Tier 4 ($200 coinsurance).
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Lower cost plan, but you must use in‑network providers and get referrals.
Example/Additional Information: You need a referral from your primary doctor to see a specialist.
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Lower monthly premium, but you pay more upfront before coverage kicks in.
Example/Additional Information: Your premium is $150/month, but you must pay $5,000 before insurance helps.
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A special savings account for medical costs, only available with high‑deductible plans.
Example/Additional Information: You put in pre‑tax money to cover copays, prescriptions or long‑term savings. IRS sets limits. Funds usually to roll over year to year.
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Plans sold through Healthcare.gov or state exchanges, often with subsidies.
Example/Additional Information: You shop online, compare Bronze, Silver, Gold tiers, and pick what fits your budget.
*Every state has its own exchange name (for example, Pennsylvania’s is called Pennie, Kentucky’s is called kynect), so don’t worry if you don’t recognize yours right away—it’s still the Marketplace. You can look up your state’s Marketplace name directly on HealthCare.gov’s “Marketplace in Your State” page.
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Federal program mainly for people 65+ or with certain disabilities.
Example/Additional Information: Covers hospital (Part A), medical (Part B), and optional drug coverage (Part D).
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Joint federal‑state program for people with low income. Benefits vary by state.
Example/Additional Information: A family just above poverty line may qualify for Medicaid in one state but not another.
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Certain prescriptions must be filled through a mail-order pharmacy, often for maintenance medications.
Example/Additional Information: Your cholesterol medication is only covered if you order a 90‑day supply by mail.
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The most you’ll pay in a year. After that, insurance covers 100%.
Example/Additional Information: Once you hit $9,100, the plan pays everything else.
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What you pay when you do use care.
Example/Additional Information: Deductibles, copays, coinsurance
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Flexible plan: cheaper in‑network, but you can still go out‑of‑network at higher cost.
Example/Additional Information: You see your doctor in‑network for $20, or an out‑of‑network specialist for $100.
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The monthly bill you pay to keep your insurance active - what you pay every month, even if you don’t use care.
Example/Additional Information: Like a Netflix subscription, but for health coverage.
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This is a decision by your health insurer that a proposed healthcare service, prescription drug, or treatment plan is medically necessary and covered under your plan. It is not a guarantee of payment — it simply means the insurer agrees the service is necessary and eligible for coverage. Emergency care usually does not require prior authorization.
Example/Additional Information: Prior authorization means your doctor must get approval from your insurance before certain treatments, tests, or medications are covered. For example, you might need insurer approval before filling a brand‑name prescription or scheduling an MRI.
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The plan restricts the amount of medication you can receive within a set time frame.
Example/Additional Information: You can only get 30 tablets of migraine medicine per month, even if your doctor prescribes more.
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You must try lower-cost or preferred drugs first before the plan covers more expensive options.
Example/Additional Information: Before approving a brand-name arthritis drug, your insurer requires you to try a generic alternative.
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A window outside Open Enrollment when you can sign up due to life events.
Example/Additional Information: You lose your job, get married, or have a baby → you qualify for a SEP to get coverage.
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A pharmacy that provides medications for serious or complex health conditions, often requiring special handling, monitoring, or support.
Example/Additional Information: These are usually high‑cost drugs for conditions like cancer, rheumatoid arthritis, multiple sclerosis, or HIV. Unlike regular retail pharmacies (like CVS or Walgreens), specialty pharmacies focus on these complex therapies and often offer extra services to help patients manage side effects, treatment schedules, and insurance approvals.
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Money from the government that lowers your monthly insurance bill.
Example/Additional Information: Your plan costs $600, but with a subsidy you only pay $200.