Understanding Health Insurance

At Common Ground Healthcare Cooperative, we know that health insurance can be confusing and intimidating, so we strive to make health insurance as easy to understand as possible. It’s important you know the basics when picking and using your health insurance policy.

Insurance Terminology

Deductible
The amount you are responsible for towards your in-network healthcare costs before your plan begins to assist with the cost.

Coinsurance
The percentage of in-network healthcare costs you are responsible for after your deductible has been met.

Copayment (Copay)
A fixed amount you pay for a covered service, usually when you receive the service. For example, if you have multiple lab tests done, a copy will apply per test.

Maximum Out-of-Pocket
The maximum amount you are responsible for towards your in-network healthcare costs before insurance begins to pay for covered services at 100%.

Premium
The monthly cost for your insurance policy. You pay this premium regardless of services used.

In-Network
Services received from a provider in our network. CGHC has contracted rates with many providers who you are able to see for healthcare services. Services from these contracted providers are “in-network,” and are therefore, applied to your plan benefits.

Out-of-Network
Services received from a provider who is not in our contracted network. If you are treated by an out-of-network provider without pre-approval, services will not be applied to your plan benefits. You may also be subject to an additional bill from that provider to cover the remaining balance of what CGHC is not allowed to pay.

Marketplace
A marketplace for health insurance where individuals, families, and small businesses can browse plans and prices and enroll in health insurance available in their area. CGHC plans are available on the Federal Marketplace, which is also known as Healthcare.gov. This Federal Marketplace at Healthcare.gov was established by the Affordable Care Act (ACA) – otherwise known as Obamacare.

Advance Premium Tax Credit (APTC)
Each month, the Federal Government automatically applies this amount of money towards your invoiced premium to reduce your monthly responsibility. APTC eligibility is based on your expected income for the year and can change when your income changes. You can only get an APTC if you apply for coverage through the Health Insurance Marketplace.

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Medical Loss Ratio (MLR) Rebates
Health insurance companies are legally required to spend 80% of the individual policyholders’ premiums on medical and pharmacy costs or quality improvement expenses. This means, only 20% of their income can be used towards on administrative and other expenses. This 80/20 ratio is called the Medical Loss Ratio (MLR). If the health insurance company does not meet these federal requirements, the Affordable Care Act (ACA) has a provision stating that the company must send rebates to their members. In previous years, CGHC has sent MLR Rebates in the form of a rebate check to individual members because of this ACA provision.