Diabetes insurance dictionary: 10 terms to know

Trying to navigate the world of health insurance as a person with type 1 diabetes (t1d)? Here are ten keywords and phrases to understand and add to your ever-evolving diabetes insurance glossary.

Affordable Care Act (ACA)

The ACA was signed into law on March 23, 2010, and aims to extend health insurance coverage to uninsured Americans. The key provisions for people living with t1d include:

• Most employers are required to provide health insurance for workers.
• Insurance exchanges have been established to help individuals purchase health insurance.
• Insurance providers are required to retain young adults on their parents' policies.
• Insurance plans are required to cover children with preexisting health conditions.
• Insurance policies are required to cover certain preventative care — including screening for conditions such as diabetes — without cost-sharing.

Children's Health Insurance Program (CHIP)

CHIP is a bridge for families who don't qualify for Medicaid but are having trouble finding an affordable health insurance option through the parent's employer or the ACA insurance exchange. CHIP limits costs to no more than 5% of a family's annual income and provides comprehensive coverage for children, including routine checkups and prescriptions.

Qualifying life event

Typically, health insurance plans are only open for enrollment during a specific time frame. However, if you experience a qualifying life event, you may be eligible to enroll in a plan outside of its open enrollment period. Examples of qualifying life events include:

• Marriage or divorce
• The birth of a child
• Losing existing health coverage, such as leaving a job or aging out of a parent's plan
• Change in residency

Insurance premium

An insurance premium is a fee you pay to the insurance company each month to keep your policy active and maintain insurance coverage. If your insurance is provided through your employer, it's likely this fee is automatically deducted from your paycheck — and in many cases, the employer may also pay part of the premium.

Deductible

A deductible is the amount of money you must pay out of pocket before the insurance company will pay any expenses. Deductible amounts are usually inversely correlated with insurance premiums. In general, a higher insurance premium is paired with a lower deductible.

It's a good idea to consider your prescription needs, labs, and doctor/specialist visits to determine the plan that best meets your needs. Keep in mind some plans have an individual and a family deductible amount.

Copay

A copayment — also known as a copay — is the fixed fee you're required to pay for medical services set by your healthcare plan. You may pay more than this amount until you meet your deductible. However, after you meet the deductible, this amount will be the fixed cost based on the type of service (i.e., primary care provider versus specialist versus emergency room).

Coinsurance

Coinsurance is another form of cost-sharing, similar to a copay. However, coinsurance is calculated as a percentage of health services costs instead of a fixed amount.

Formulary

A formulary is a document containing all of the medications a specific insurance plan covers, sometimes called a drug list. This is important to pay attention to because many diabetes insurance plans only cover specific types of insulin.

In-network vs. out-of-network

An insurance plan's network is the set of doctors, hospitals, and pharmacies that are within their contract for negotiated, discounted rates. For the consumer, seeing an "in-network" physician generally means lower costs. Providers or services that are "out-of-network" are usually more expensive since the insurance plan doesn't have a negotiated rate established.

Insulin rationing

Insulin rationing is a dangerous practice where a person with diabetes limits the amount of insulin they inject or take through an insulin pump to extend their prescribed supply. Many health insurance providers and most insulin manufacturers have programs in place to reduce insulin costs at the pharmacy to prevent insulin rationing.

Looking for more diabetes definitions? Check out Health Insights for additional insight into other important terms to know.