Glossary

The Patient Protection and Affordable Care Act was signed by President Barack Obama on March 23. Essential benefits: The PPACA requires all health-insurance plans sold after 2014 to include a basic package of benefits, including hospitalization, outpatient services, maternity care, prescription drugs, emergency care and preventive services, among other benefits. It also restricts the amount of cost-sharing that patients must pay for these services.

Grandfathered plan: A health plan that an individual was enrolled in prior to March 23, when the act was signed. Grandfathered plans are exempted from most changes required by the PPACA. New employees may be added to group plans that are grandfathered, and new family members may be added to all grandfathered plans.

Group health insurance: Health insurance that is offered to a group of people, such as employees of a company. The majority of Americans have group health insurance through their employer or their spouse's employer.

Guarantee issue/renewal: Requires insurers to offer and renew coverage, without regard to health status, use of services or pre- existing conditions. This requirement ensures that no one will be denied coverage for any reason.

Health-insurance exchange/connector: A purchasing arrangement through which insurers offer and smaller employers and individuals purchase health insurance. The PPACA creates new "American Health Benefit Exchanges" in each state to assist individuals and small businesses in comparing and purchasing qualified health-insurance plans. Exchanges also will determine who qualifies for subsidies and make subsidy payments to insurers on behalf of individuals receiving them. They also will accept applications for other health-coverage programs such as Medicaid and CHIP.

High-risk pool: State programs designed to provide health insurance to residents who are considered medically uninsurable and are unable to buy coverage in the individual market. The PPACA creates a temporary federal high-risk pool program, which may be administered by the states, to provide coverage to individuals with pre-existing conditions who have been uninsured for at least six months.

Individual mandate: A requirement that all individuals obtain health insurance. A mandate could apply to the entire population, just to children, and/or could exempt specified individuals. Massachusetts was the first state to impose an individual mandate that all adults have health insurance.

Job lock: The situation where individuals remain in their current job because they have an illness or condition that may make them unable to obtain health-insurance coverage if they leave that job. The PPACA would eliminate job lock by prohibiting insurers from refusing to cover individuals due to health status.

Medical home: A health-care setting where patients receive comprehensive primary-care services; have an ongoing relationship with a primary-care provider who directs and coordinates their care; have enhanced access to primary, secondary and tertiary care; and have access to linguistically and culturally appropriate care.

Medical loss ratio: The percentage of premium dollars an insurance company spends on medical care, as opposed to administrative costs or profits. The PPACA requires that large group plans spend 85 percent of premiums on clinical services and other activities for the quality of care for enrollees. Small group and individual market plans must devote 80 percent of premiums to these purposes.

Out-of-pocket limit: An annual limitation on all cost-sharing for which patients are responsible under a health-insurance plan. This limit does not apply to premiums, balance-billed charges from out- of-network health-care providers, or services that are not covered by the plan. The PPACA requires out-of-pocket limits of $5,950 per individual and $11,900 per family, beginning in 2014. These amounts will be adjusted annually to account for the growth of health- insurance premiums.

Pre-existing condition exclusions: An illness or medical condition for which a person received a diagnosis or treatment within a specified period of time prior to becoming insured. Health- care providers can exclude benefits for a defined period of time for the treatment of medical conditions that they determine to have existed within a specific period prior to the beginning of coverage.

Premium subsidies: A fixed amount of money or a designated percentage of the premium cost that is provided to help people purchase health coverage. Premium subsidies are usually provided on a sliding scale based on an individual's or family's income.

Preventive care: Health care that emphasizes the early detection and treatment of diseases. The focus on prevention is intended to keep people healthier for longer, thus reducing health-care costs over the long term. The PPACA requires insurers to provide coverage for preventive benefits without deductibles, co-payments or coinsurance.

Qualified health plan: A health-insurance policy that is sold through an exchange. The PPACA requires exchanges to certify that qualified health plans meet minimum standards contained in the law.

Underinsured: People who have health insurance but who face out- of-pocket health-care costs or limits on benefits that may affect their ability to access or pay for health-care services.

-- SOURCES: Kaiser Family Foundation, National Association of Insurance Commissioners.

MEMO: Special Pullout; HEALTH-CARE REFORM

Originally published by RICHMOND TIMES-DISPATCH.

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