Reference
Health insurance glossary
The terms that appear on every plan document, defined in the way someone would actually explain them out loud.
- Actuarial value
- The share of total covered medical costs a plan pays across a standard population. Bronze is about 60%, silver 70%, gold 80%, platinum 90%. It describes the plan's generosity, not the quality of its network.
- Allowed amount
- The contracted rate an insurer has negotiated with an in-network provider. It is the real price of a service, and every other number on a claim is calculated from it.
- Balance billing
- When a provider bills you for the difference between their list price and the allowed amount. In-network providers generally may not do this, and federal law restricts it in emergencies and for many ancillary providers at in-network facilities.
- Benchmark plan
- The second-lowest-cost silver plan available in your area. Your premium tax credit is calculated against it, so it sets the size of every subsidy in that county.
- Catastrophic plan
- A high-deductible ACA-compliant plan available to people under 30 or to anyone with a hardship or affordability exemption. It covers the essential health benefits and preventive care, then very little until the deductible is met.
- Coinsurance
- Your percentage share of a cost after the deductible is met. If your coinsurance is 20% and the allowed amount is $1,000, you pay $200.
- Copay
- A fixed dollar amount for a service, such as $35 for a specialist visit. It applies whether or not you have met your deductible, depending on the plan.
- Cost-sharing reduction
- A subsidy that lowers your deductible, copays, coinsurance, and out-of-pocket maximum. Available between 100% and 250% of the federal poverty level and only on silver plans. It is never reconciled at tax time.
- Deductible
- What you pay for covered services before the plan begins paying its share. Preventive care and some services are typically covered before the deductible is met.
- Effectuated enrollment
- The number of people who selected a plan and then actually paid a premium. It is meaningfully lower than the sign-up figure, and it is the number that reflects who is genuinely covered.
- Essential health benefits
- Ten categories of care every ACA-compliant plan must cover, including hospitalisation, prescription drugs, maternity care, mental health and substance use treatment, and preventive services.
- Explanation of benefits
- A statement from your insurer showing how a claim was processed. It is not a bill. The amount shown as your responsibility should match the bill the provider sends.
- Federal poverty level
- Income thresholds published annually by HHS that determine subsidy eligibility. Marketplace subsidies use the prior year's figures, so 2027 coverage uses the 2026 guidelines: $15,960 for one person.
- Formulary
- The list of prescription drugs a plan covers, usually sorted into tiers with different copays. Check yours before enrolling; formularies change every year.
- Grandfathered plan
- A plan bought before March 23, 2010 and unchanged since. It is exempt from some ACA requirements and is increasingly rare.
- Health savings account
- A tax-advantaged account paired with a qualifying high-deductible plan. Contributions are deductible, growth is untaxed, and withdrawals for qualified medical spending are untaxed. Contributions also reduce modified adjusted gross income.
- In-network
- A provider who has a contract with your insurer at negotiated rates. Out-of-network care costs substantially more and sometimes is not covered at all.
- Metal level
- Bronze, silver, gold, or platinum. It describes actuarial value, meaning cost sharing, and says nothing about the network or the quality of care.
- Minimum essential coverage
- Coverage that satisfies the ACA's definition of health insurance. Losing it triggers a special enrollment period; many non-ACA products do not qualify as minimum essential coverage.
- Modified adjusted gross income
- The income measure used for marketplace subsidies. Adjusted gross income plus tax-exempt interest, non-taxable Social Security benefits, and excluded foreign earned income, for everyone on your tax return.
- Network adequacy
- Regulatory standards requiring a plan to include enough providers, close enough to enrollees, with short enough waits. Standards vary by state.
- Open enrollment
- The annual window in which anyone can buy or change a marketplace plan without needing a qualifying life event. For 2027 coverage it opens November 1, 2026.
- Out-of-pocket maximum
- The most you can pay for covered in-network care in a year. Once reached, the plan pays 100%. For 2027 it is capped at $12,000 for one person and $24,000 for a family.
- Preventive care
- Screenings, immunisations, and check-ups that ACA-compliant plans must cover at no cost sharing when delivered in network, even before the deductible is met.
- Qualifying life event
- A change such as losing coverage, marrying, moving, or having a child that opens a special enrollment period, usually of 60 days.
- Reconciliation
- The tax-return process, on Form 8962, that compares the advance credits you received against what your actual income entitled you to. Since plan year 2026 there is no cap on repaying an excess.
- Silver loading
- The practice of concentrating the cost of unfunded cost-sharing reductions into silver premiums. It raises the benchmark, which raises everyone's credit, and it is why gold plans are sometimes cheaper than silver.
- Special enrollment period
- A window, usually 60 days, to enroll outside open enrollment after a qualifying life event.
- Subsidy cliff
- The point at 400% of the federal poverty level above which the premium tax credit disappears entirely. For 2027 that is $63,840 for one person and $132,000 for a family of four.
- Summary of benefits and coverage
- A standardised document every plan must provide, in the same format, so that plans can be compared directly. It is the document to read before enrolling.
- Tiered network
- A network divided into preferred and non-preferred providers, with lower cost sharing at the preferred tier. Both tiers are in network, but they do not cost the same.
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Sources
- 1.HealthCare.gov: Dates and deadlines
- 2.CMS 2027 Payment Parameters Guidance
- 3.IRS Rev. Proc. 2026-26 (2027 applicable percentages)
- 4.healthinsurance.org: Cost-sharing subsidies
Marketplace rules change through legislation, rulemaking, and litigation. Confirm anything you are about to act on, or call and ask.
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