Health Insurance Basics
Risk and delivery models
Health underwriting measures morbidity (likelihood and cost of illness), not mortality. Delivery models: indemnity (fee-for-service, any provider, higher cost), HMO (closed network, gatekeeper PCP, prepaid, usually no out-of-network coverage except emergencies), PPO (network discounts, out-of-network allowed at reduced benefit), POS (HMO/PPO hybrid with a gatekeeper), and EPO (network only, no referral needed).
Cost sharing
A deductible is paid before benefits begin; coinsurance is a percentage split thereafter; a copay is a flat dollar amount. The out-of-pocket maximum caps the insured's exposure. Preventive care is a separate category - covered with no cost sharing in non-grandfathered plans.
Federal framework (ACA)
Market reforms: guaranteed issue and guaranteed renewal, no preexisting-condition exclusions, no annual or lifetime dollar limits on essential health benefits, dependent coverage to age 26, preventive services with no cost sharing, and medical loss ratio rebates (80% individual/small group, 85% large group). Plans are sold on the metal tiers - bronze 60%, silver 70%, gold 80%, platinum 90% actuarial value - plus catastrophic plans for eligible buyers. Subsidies are income based.
Public and employer coverage
Medicare Parts A (hospital), B (medical), C (Advantage), D (drugs); Medicaid for low income; CHIP for children. Group health is employer sponsored, and self-funded ERISA plans are largely exempt from state insurance mandates.
Traps: Medicare is not part of the ACA exchanges; HMO emergency care is covered out of network; coinsurance is a percentage, not a flat fee.
Rule of thumb: memorized metal tiers - 60/70/80/90 - plus 'preventive is free.'