# Health Insurance Terminology (Educational Reference)
> Important: BNW Services is not licensed for health / Accident & Health (A&H) insurance. This is educational reference only, so we can understand your question and point you to the right resource — for example, healthcare.gov or a licensed health agent. We do not quote, sell, or advise on health coverage.
Health insurance has its own vocabulary, and the words overlap confusingly with property and life insurance (a "deductible" and "coinsurance" mean somewhat different things there). This reference exists so our team — and Lucy, our AI receptionist — can *understand* a health question when it comes up and *gracefully redirect* you to a licensed source. If you need health coverage, start at healthcare.gov or ask us and we'll help you find a licensed health agent.
The Money Words
Premium — What you (or your employer) pay each month to keep a health plan active. Paying the premium doesn't mean services are free — you still pay deductibles, copays, and coinsurance until you hit your out-of-pocket maximum.
Deductible — The amount you pay for covered services each year before the plan starts sharing costs. Some services (like preventive care) are often covered before you meet it.
Copay (Copayment) — A fixed dollar amount for a covered service (for example, a set fee for a doctor visit or prescription). Copays usually apply even before the deductible is met and count toward the out-of-pocket maximum.
Coinsurance — Your percentage share of a covered cost after the deductible. With 20% coinsurance, you pay 20% and the plan pays 80%.
Out-of-Pocket Maximum — The most you'll pay in a plan year for covered, in-network services. Once you reach it, the plan pays 100% of covered costs for the rest of the year. Deductibles, copays, and coinsurance count toward it; premiums do not.
Plan Types
HMO (Health Maintenance Organization) — Lower cost, but you generally must use in-network providers and get a referral from a primary care physician to see specialists.
PPO (Preferred Provider Organization) — More flexibility to see out-of-network providers (at higher cost) and usually no referral needed; typically higher premiums.
EPO (Exclusive Provider Organization) — Like a PPO's no-referral freedom but, like an HMO, generally covers in-network care only (except emergencies).
POS (Point of Service) — A hybrid: requires a primary-care referral like an HMO but allows some out-of-network care like a PPO.
Networks & Drugs
Network — The doctors, hospitals, and pharmacies contracted with your plan. In-network care costs less; out-of-network care costs more or may not be covered.
Formulary — The plan's list of covered prescription drugs, usually organized into cost "tiers." A drug's tier affects your share of its cost.
Prior Authorization — Approval the plan requires before it will cover certain services or drugs.
Explanation of Benefits (EOB) — A statement (not a bill) showing what the plan paid, what it didn't, and what you may owe after a claim.
Tax-Advantaged Accounts
HSA (Health Savings Account) — A tax-advantaged savings account paired with a qualifying high-deductible health plan (HDHP). Funds roll over year to year and are yours to keep.
FSA (Flexible Spending Account) — An employer account for eligible health costs funded with pre-tax dollars; often "use it or lose it" within the plan year (with limited carryover rules).
HDHP (High-Deductible Health Plan) — A plan with a higher deductible and lower premium that can be paired with an HSA.
The Marketplace & the ACA
ACA (Affordable Care Act) — The federal law that created the health insurance Marketplace, required coverage of pre-existing conditions, and set essential health benefits.
Marketplace / Exchange — Where individuals shop for and enroll in ACA health plans, at healthcare.gov (used by Missouri and Kansas residents).
Premium Tax Credit / Subsidy — Income-based financial help that lowers Marketplace premiums for those who qualify.
Metal Tiers — Marketplace plans grouped as Bronze, Silver, Gold, and Platinum, reflecting how costs are split between you and the plan (not quality of care).
Open Enrollment — The annual window to enroll in or change Marketplace or employer coverage. Outside it, you generally need a Special Enrollment Period triggered by a qualifying life event (marriage, birth, job loss, and so on).
Government Programs
Medicare — Federal health coverage mainly for people 65+ and certain younger people with disabilities:
- Part A — Hospital insurance (inpatient care).
- Part B — Medical insurance (doctor visits, outpatient).
- Part C (Medicare Advantage) — Private plans bundling A and B (and often drug coverage).
- Part D — Prescription drug coverage.
- Medigap (Medicare Supplement) — Private policies that help pay costs Original Medicare leaves to you.
Medicaid — Joint federal-state coverage for eligible low-income individuals and families; rules and names vary by state.
CHIP (Children's Health Insurance Program) — Low-cost coverage for children in families that earn too much for Medicaid but need help.
Authoritative details for these programs live at medicare.gov, cms.gov, and your state Medicaid agency — always verify there.
How We Handle Health Questions
If you ask us about health, Medicare, or Marketplace coverage, we'll answer educational questions using this reference and then point you to the right licensed resource. We won't quote, recommend, or sell health plans — that's outside our license. For coverage, the trusted starting points are healthcare.gov (Marketplace), medicare.gov (Medicare), or a licensed health/Medicare agent.
Where to Verify
Federal authorities own the definitive health-coverage definitions: HealthCare.gov (healthcare.gov) for the Marketplace and ACA, CMS (cms.gov) for program rules, and Medicare.gov (medicare.gov) for Medicare. These are the sources to trust over any third party.
Further Reading
- HealthCare.gov Glossary — https://www.healthcare.gov/glossary/
- Medicare.gov — What Medicare Covers — https://www.medicare.gov/what-medicare-covers
- CMS — Health Insurance Marketplace — https://www.cms.gov/marketplace
- HealthCare.gov — How Marketplace Plans Work — https://www.healthcare.gov/how-plans-set-your-costs/
- KFF — Health Insurance Basics — https://www.kff.org/understanding-health-insurance/
References
1. HealthCare.gov — https://www.healthcare.gov
2. Centers for Medicare & Medicaid Services (CMS) — https://www.cms.gov
3. Medicare.gov — https://www.medicare.gov
4. HealthCare.gov Glossary — https://www.healthcare.gov/glossary/
5. Kaiser Family Foundation (KFF) — https://www.kff.org
Related
- Insurance Acronyms & Abbreviations
- Insurance Glossary A–G
- How an Insurance Policy Is Structured
- Coverage Types Across All Lines
- Glossary & Terminology — README
Watch
- "Medicare & You" official video series — CMS / Medicare (YouTube): https://www.youtube.com/user/CMSHHSgov
- "Health Insurance Basics" — Khan Academy (YouTube): https://www.youtube.com/@khanacademy