Health Insurance Glossary

Cost & pricing terms

Premium

The amount you pay each month to keep your health insurance active, regardless of whether you use any care that month. This is the number most people compare first when shopping, though it's only one piece of the total cost picture.

Deductible

The amount you pay out of pocket for covered care before your plan starts paying its share. A $2,000 deductible means you generally pay the first $2,000 of covered costs yourself each plan year, though many plans cover certain services, like preventive care, before the deductible is met.

Copay (copayment)

A fixed dollar amount you pay for a specific service, like $30 for a primary care visit, regardless of the total cost of that visit. Copays are common for routine visits and prescriptions and typically don't change based on your deductible status.

Coinsurance

Your share of a covered cost, shown as a percentage rather than a flat fee, usually applied after you've met your deductible. A plan with 20% coinsurance means you pay 20% of the covered cost and the plan pays the remaining 80%.

Out-of-pocket maximum

The most you'll have to pay for covered services in a plan year before your plan starts paying 100% of covered costs. This cap includes deductibles, copays, and coinsurance combined, and resets each plan year.

Premium tax credit (subsidy)

A federal tax credit that lowers your monthly ACA Marketplace premium, calculated based on your household income and size relative to the Federal Poverty Level. Most Marketplace enrollees in Texas qualify for at least a partial credit.

Cost-sharing reduction

An additional discount, available only on Silver-tier plans for income-qualifying households, that lowers your deductible, copays, and out-of-pocket maximum on top of your premium tax credit.

Plan types & networks

HMO (Health Maintenance Organization)

A plan type that requires you to choose a primary care provider and get referrals to see specialists, generally with little or no coverage for out-of-network care. HMOs typically cost less than PPOs in exchange for this added structure.

PPO (Preferred Provider Organization)

A plan type that lets you see specialists without a referral and offers partial coverage for out-of-network care, generally at a higher monthly premium than a comparable HMO.

EPO (Exclusive Provider Organization)

A middle-ground plan type: like an HMO, it generally doesn't cover out-of-network care, but like a PPO, it usually doesn't require referrals to see in-network specialists.

Metal tiers (Bronze, Silver, Gold, Platinum)

Categories that group ACA Marketplace plans by how costs are split between you and the insurer. Bronze has the lowest premium and highest deductible; Platinum has the highest premium and lowest deductible, with Silver and Gold in between. The tier doesn't describe plan quality, only the cost-sharing structure.

Provider network

The specific group of doctors, hospitals, and clinics that have contracted with your insurer to provide care at negotiated rates. Seeing an in-network provider is almost always cheaper than seeing one outside your plan's network.

Formulary

The list of prescription drugs a plan covers, organized into cost tiers. The same medication can sit on a low-cost tier with one carrier and a much more expensive tier with another, which is why checking your specific prescriptions against a plan's formulary matters.

Prior authorization

A requirement that your provider get approval from your insurer before certain procedures, tests, or medications are covered. Skipping this step can mean a covered service is denied or costs significantly more.

Enrollment & eligibility

Open Enrollment Period

The annual window, November 1 through January 15 for ACA Marketplace plans in Texas, when anyone can enroll in or change a plan without needing a qualifying life event.

Special Enrollment Period (SEP)

A window, typically 60 days, that opens outside normal Open Enrollment after a qualifying life event like a birth, marriage, job loss, or move, letting you enroll in or change coverage without waiting for the next Open Enrollment.

Qualifying life event

A specific change in circumstances, such as marriage, having a baby, losing other coverage, or moving, that triggers a Special Enrollment Period.

Minimum essential coverage

The baseline standard of health coverage that counts for purposes like QSEHRA reimbursement eligibility. Most ACA Marketplace, employer, Medicare, and Medicaid/CHIP plans qualify.

Guaranteed issue

A protection under the ACA that requires Marketplace insurers to accept any applicant regardless of pre-existing health conditions, and prohibits charging more based on health history.

Pre-existing condition

A health condition you had before applying for a new plan. Under the ACA, Marketplace plans can't deny coverage or charge more because of one, though this protection doesn't automatically extend to every type of coverage.

Medicare-specific terms

Original Medicare (Parts A & B)

The federal government-run Medicare program, with Part A covering hospital care and Part B covering outpatient medical care, accepted by nearly every provider nationwide.

Medicare Advantage (Part C)

An alternative to Original Medicare offered by private insurers approved by Medicare, usually bundling hospital, medical, and often drug coverage into one plan with a defined network.

Medicare Part D

Prescription drug coverage, either bundled into a Medicare Advantage plan or purchased as a standalone plan alongside Original Medicare.

Medigap (Medicare Supplement)

A separate policy that pairs with Original Medicare to help cover its out-of-pocket costs, generally allowing you to see any provider nationwide that accepts Medicare.

Small business & group coverage terms

Group health plan

Coverage a business offers to its employees as a single plan (or small set of options), typically with the employer covering some or all of the premium and pricing based on the group as a whole.

Full-time equivalent (FTE)

A calculation that combines part-time employee hours into an equivalent full-time headcount, used to determine ACA employer mandate status and certain small business tax credit eligibility.

Employer mandate

The ACA requirement that businesses with 50 or more full-time-equivalent employees offer affordable, minimum-value health coverage or face a potential penalty.

QSEHRA

A Qualified Small Employer Health Reimbursement Arrangement, letting small employers under 50 employees reimburse workers tax-free for individual health coverage instead of sponsoring a group plan.

ICHRA

An Individual Coverage HRA, a more flexible reimbursement arrangement available to employers of any size, with no cap on contribution amounts.

Self-employed health insurance deduction

An above-the-line tax deduction letting sole proprietors, partners, and certain S-corp shareholders deduct their own health insurance premiums on their personal tax return.

COBRA

A federal law letting employees continue their employer's group coverage for a limited time after leaving a job, generally by paying the full premium themselves without an employer contribution.