Health Insurance Basics
Cost-sharing vocabulary
A deductible is paid before benefits; coinsurance is the insured's percentage after the deductible; a copay is a flat charge; the out-of-pocket maximum caps the insured's share. A waiting period delays eligibility; an elimination period (disability income) delays benefits; an inside limit caps a specific service. Usual, customary and reasonable (UCR) limits what indemnity plans pay.
Delivery systems
Fee-for-service indemnity plans reimburse covered care. Managed care controls cost through networks: HMO (closed panel, gatekeeper, capitation), PPO (network discounts, out-of-network allowed, no gatekeeper), POS (hybrid with in-network gatekeeper), EPO (network only). Coordination of benefits prevents double payment, with the primary plan paying first.
Coverage categories
Individual and group medical, disability income, long-term care, critical illness, accident, hospital indemnity, dental, and vision. Disability definitions matter: own occupation pays if you cannot do your own job (richer); any occupation pays only if you cannot do any job for which you are suited. Residual disability pays proportional benefits. Long-term care covers custodial care that medical plans exclude.
Hawaii specifics
The Prepaid Health Care Act makes Hawaii the only state with a near-universal employer mandate: employees working 20 or more hours weekly must be covered, the employer pays at least half the premium, and the employee's share is capped at 1.5% of wages. Medicaid is delivered through Med-QUEST; Medicare Advantage and Part D carry strict marketing rules.
Traps: treating coinsurance as a flat dollar amount, assuming an elimination period runs once per year, and applying federal ERISA reasoning to Hawaii's mandate.
Rule of thumb: coinsurance is a percentage; a copay is a dollar amount.