Health insurance, explained
The words on a health plan decide what you actually pay, and most of them are easy to mix up. Below are plain-English definitions of the 30 terms that matter most, and 12 side-by-side comparisons for the choices people get stuck on. Each one is short, honest, and links to a calculator when a number would help more than a paragraph.
The glossary, A to Z
- Actuarial value
The average share of covered costs a plan pays: roughly 60 percent bronze to 90 percent platinum.
- Benchmark plan
The plan your subsidy is measured against: on the marketplace, the second-lowest-cost silver plan.
- COBRA
A federal law letting you keep your job-based plan for a time after leaving, at the full cost.
- Coinsurance
Your percentage share of a covered service's cost after you've met your deductible.
- Copay
A fixed dollar amount you pay for a specific covered service, like $30 for a doctor visit.
- Cost-sharing reduction
Extra savings that lower your deductible, copays, and coinsurance, available only on silver plans.
- Deductible
The amount you pay for covered care each year before your plan starts paying its share.
- Essential health benefits
Ten categories of care every marketplace plan must cover, from hospital stays to prescriptions.
- Exclusive Provider Organization (EPO)
A plan that covers only in-network providers but usually skips referrals for specialists.
- Federal poverty level
An income benchmark, set yearly by HHS, used to decide marketplace and Medicaid eligibility.
- Flexible Spending Arrangement (FSA)
An employer-owned account for pre-tax health spending, usually subject to use-it-or-lose-it rules.
- Formulary
The list of prescription drugs a plan covers, usually sorted into cost tiers.
- Health Insurance Marketplace
The government-run exchange where you compare plans and the only place to get a premium tax credit.
- Health Maintenance Organization (HMO)
A lower-cost plan that uses one network, a primary care doctor, and referrals for specialists.
- Health Savings Account (HSA)
A tax-advantaged savings account for medical costs, available only if you have an HSA-qualified HDHP.
- High-Deductible Health Plan (HDHP)
A plan with a higher deductible and IRS-set limits that can be paired with a Health Savings Account.
- Metal tiers
Bronze, silver, gold, and platinum categories that set how you and the plan split costs.
- Modified Adjusted Gross Income (MAGI)
The income figure the marketplace uses for subsidies: adjusted gross income plus a few add-backs.
- Open enrollment
The yearly window when anyone can enroll in or change a marketplace plan without a qualifying event.
- Out-of-pocket maximum
The most you'll pay for covered, in-network care in a plan year before the plan covers 100 percent.
- Point of Service (POS) plan
A hybrid plan that uses a primary care doctor and referrals but covers some out-of-network care.
- Preferred Provider Organization (PPO)
A flexible plan that covers out-of-network care at a higher cost and skips specialist referrals.
- Premium
The fixed amount you pay every month to keep your health plan active, whether you use care or not.
- Premium tax credit
A subsidy that lowers your monthly marketplace premium, based on your household income.
- Preventive care
Recommended screenings, vaccines, and checkups that in-network marketplace plans cover at no cost.
- Provider network
The doctors, hospitals, and pharmacies a plan contracts with to provide care at in-network rates.
- Qualifying life event
A life change, like a job loss, move, marriage, or birth, that opens a special enrollment period.
- Second-Lowest-Cost Silver Plan (SLCSP)
The second-lowest-cost silver plan in your area, the benchmark your subsidy is calculated against.
- Special enrollment period
A window to enroll outside open enrollment after a qualifying life event like a job loss or move.
- Subsidy cliff
The income line above which marketplace premium tax credits end: 400 percent of poverty in 2026.
Compare two things
The decisions where two options look similar until you put them next to each other.
Ready to put real numbers on it?
The definitions tell you what a term means; the calculators tell you what it costs for your household — estimated subsidies, plan comparisons, and the true annual cost of care, all free and with no email required.
See all the calculators