Cost-sharing questions are usually small calculations. Learn the order the pieces apply in, and they become easy points.
The pieces, in order
- Deductible: what you pay for covered services before the plan starts paying. With a $2,000 deductible and no covered claims yet this year, you pay the first $2,000 yourself.
- Coinsurance: after the deductible, your percentage of the allowed amount. If the allowed amount for a visit is $200 and coinsurance is 20%, you pay $40.
- Copayment: a fixed dollar amount for a service, such as a set fee per office visit.
- Out-of-pocket maximum: the most you pay in a year; after it, the plan pays 100% of covered services.
Marketplace metal levels
Marketplace plans come in metal categories that trade premium against cost sharing. Two facts the exam likes: the extra cost-sharing reductions available to lower-income enrollees come only with a Silver plan, and the categories that work with a Health Savings Account are Bronze and Catastrophic. Marketplace plans must cover pre-existing conditions and cannot charge more for them.
Three accounts, three owners
- Health Savings Account (HSA): paired with a high-deductible health plan. The money is the account holder's: if the person later loses HDHP coverage and can no longer contribute, they can still take tax-free distributions for qualified medical expenses. HSA money generally cannot pay health insurance premiums.
- Health Reimbursement Arrangement (HRA): funded and owned only by the employer; unused amounts carry forward.
- Flexible Spending Account (FSA): funded by salary reduction and "use it or lose it", unless the plan offers a grace period of up to 2½ months or a limited carryover, not both.
One more distinction
Short-term, limited-duration insurance is not individual health insurance coverage under federal rules, so the protections for Marketplace plans do not apply to it.