Health Insurance: Plan Types, Provisions, Disability, and Senior Coverage
Cost-sharing vocabulary
Deductible (paid first by the insured), coinsurance (a percentage after the deductible), copay (flat dollar amount), and out-of-pocket maximum (once reached, covered in-network care is paid at 100%). Preventive care is typically covered with no cost sharing.
Delivery systems
HMO: members use a network with a primary care gatekeeper and referrals; capitation pays providers per member; emergency care is covered anywhere. PPO: out-of-network care allowed at higher cost; no referrals. POS: a hybrid allowing out-of-network with a referral. EPO: network only, no gatekeeper. ACA marketplaces require guaranteed issue, prohibit pre-existing condition exclusions in the individual market, and cover essential health benefits.
Disability income
Key terms: own occupation (pays if you cannot do your own job - broader) vs. any occupation (pays only if you cannot do any suitable work); elimination period (waiting time before benefits); benefit period; residual/partial benefits. Renewability: noncancellable (rate and renewability guaranteed) is strongest for the insured, then guaranteed renewable, then conditionally renewable.
Senior coverage
Medicare Part A (hospital), Part B (medical), Part C (Medicare Advantage), Part D (drugs); Medigap supplements original Medicare but not drug costs. Medicare does not pay for custodial long-term care. Medi-Cal is California's Medicaid program.
Traps
- Cal-COBRA extends small-group (2–19 employees) continuation to 36 months.
- Confusing elimination period (waiting) with benefit period (how long benefits last).
- Coinsurance applies only after the deductible is satisfied.
Rule of thumb: deductible → coinsurance → out-of-pocket maximum → plan pays 100% of covered in-network care.