Glossary of Insurance Terms

A

ACA (Affordable Care Act)
A U.S. law passed in 2010 that made health insurance more affordable and accessible. It requires all plans to cover essential benefits and prevents insurers from denying coverage due to pre-existing conditions.
Example: Thanks to the ACA, someone with diabetes can get affordable coverage without being denied.

Agent
A licensed professional who helps you understand, choose, and enroll in insurance plans. Agents explain your options in plain language.
Example: A Madrinas Insurance agent can compare Obamacare, Medicare, and private insurance to find the best fit for your family.

B

Beneficiary
The person chosen to receive the benefit from an insurance policy, usually in life insurance.
Example: A parent may list their child as the beneficiary, ensuring financial protection if something happens to them.

C

Carrier
The insurance company that issues and manages your health plan.
Example: Blue Cross Blue Shield is a carrier.

Claim
A formal request you make to your insurance company to pay for a covered service.
Example: After a hospital stay, your provider sends a claim to your insurer so the bill is covered.

Coinsurance
The percentage of medical costs you pay after meeting your deductible.
Example: If your plan has 20% coinsurance on a $1,000 bill, you pay $200.

Co-pay (Copayment)
A fixed amount you pay for certain services like doctor visits or prescriptions.
Example: You might pay $25 at the doctor’s office, while your insurance pays the rest.

D

Deductible
The amount you pay out of pocket before your insurance starts covering costs.
Example: If your deductible is $1,500, you must pay that amount first before your insurance begins paying for most services.

Dependent
A spouse, partner, or child who is covered under your insurance policy.
Example: Adding your kids to your ACA family plan makes them dependents.

Discount Plan
Not insurance, but a program where members pay a fee to get reduced rates on services like dental or vision.
Example: A dental discount plan may lower the cost of cleanings by 40%.

E

Eligibility
Rules that determine if you or your dependents qualify for a health plan.
Example: Medicaid eligibility is based on income and household size.

Enrollment Period
The time when you can sign up for or change your health insurance plan. This includes Open Enrollment and Special Enrollment.
Example: From November 1 to January 15, you can choose an ACA plan during Open Enrollment.

Essential Health Benefits
Ten categories of care ACA-compliant plans must cover, including prescriptions, maternity, preventive services, and pediatric care.
Example: An ACA plan must include preventive checkups at no cost.

M

Marketplace / Exchange
The government platform (federal or state) where you can shop for ACA plans.
Example: Healthcare.gov is the federal marketplace.

Medicaid
A government program that provides free or low-cost health insurance for individuals and families with low income.
Example: A family with limited income may qualify for Medicaid for both adults and children.

Medicare
A federal program that provides health coverage to people age 65+ and certain younger people with disabilities.
Example: Someone turning 65 can enroll in Medicare for hospital, doctor, and prescription coverage.

N

Network
The group of doctors, hospitals, and providers that accept your insurance plan.
Example: Staying “in-network” usually means lower costs for your care.

O

Out-of-Pocket Maximum
The most you’ll pay in a year for covered services (includes deductibles, copays, and coinsurance). After this amount is reached, your plan covers 100%.
Example: If your limit is $7,500 and you reach it, all further covered care is free that year.

P

Policyholder
The person who owns the insurance policy and is responsible for paying premiums.
Example: If you buy a family plan, you’re the policyholder and your kids are dependents.

Premium
The amount you pay each month to keep your insurance active.
Example: Your ACA plan might cost $75 per month after subsidies, which is your premium.

Pre-Existing Condition
A health condition you had before enrolling in a new plan. Under the ACA, insurers cannot deny coverage or charge more.
Example: Asthma is a pre-existing condition, but ACA plans must cover it.

Private Health Insurance
Coverage purchased directly from insurers or through a broker, not via ACA or government programs.
Example: Freelancers often buy private insurance when they don’t qualify for subsidies.

Provider
Any healthcare professional or facility that delivers medical services.
Example: Doctors, dentists, and hospitals are all providers.

S

Special Enrollment Period (SEP)
A time outside of Open Enrollment when you can enroll in a plan due to a life event like losing Medicaid, getting married, or having a baby.
Example: If you lose your job-based coverage, you qualify for a SEP and can sign up for an ACA plan right away.

Subsidy (Premium Tax Credit)
Financial assistance from the government that lowers your ACA premium based on income and household size.
Example: A $400 premium might drop to $50 after subsidies.