Understanding the language of health Care

The first step to understanding health insurance begins with understanding the language used to describe it. In this section, we’ll define terms such as premium, deductible, network, and more. Plus we’ll explain the four plan levels available on the Marketplace.


Understanding Health Care Terms

Here are some common health insurance terms you’ll need to know when enrolling in health insurance.

  • advance premium tax credit

    A tax credit that helps qualifying-individuals afford health coverage on the Marketplace. The Advance Premium Tax Credit is a payment by the IRS to health insurers that lowers the monthly premium of health insurance purchased on the Marketplace. 

  • claim

    A claim is a request by an individual to the health insurance company for the insurance company to pay for medical services obtained from a health care professional.

  • coinsurance

    Some health care plans include coinsurance. This is the portion of a medical bill that you pay out-of-pocket once your deductible has been reached. A plan with 10% coinsurance would mean if you receive a medical bill for $100 after your deductible has been reached, you would owe $10 and your health care plan would pay the remaining $90.

  • copayment (copay)

    A fixed dollar amount that you pay each time you receive certain services. For example, if your health care plan includes a $15 copay for doctor visits, you pay $15 every time you visit your doctor, and the health insurance company pays the remaining cost.

  • cost sharing reduction (csr)

    CSR is a discount that lowers out-of-pocket costs for deductibles, coinsurance, and copays. To be eligible you must purchase a silver level Marketplace plan and have income below a certain level.

  • deductible

    The dollar amount you must pay out of your pocket for your health care expenses before your health plan begins to pay.

  • dependent

    A person or persons relying on the policyholder for support, as it pertains to health insurance. Dependents may include the spouse and/or unmarried children (whether natural, adopted or step) of the insured person.

  • in-network

    In-network refers to providers or health care facilities that are part of a health insurance plan's network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the health insurance companies with which they have contracts.

  • marketplace

    Health Insurance Marketplaces (also sometimes referred to as “health exchanges”) provide a set of government-regulated and standardized health care plans from which individuals may purchase health insurance policies and apply for federal subsidies. There are federal, state, and private Marketplaces.

  • maximum plan dollar limit

    The maximum dollar amount your health insurance will pay for covered expenses for the insured and each covered dependent while covered under the health care plan.

  • monthly premium

    The money paid every month to a health plan by you for health care benefits. This money is paid monthly regardless of whether you use your insurance or not.

  • network

    A group of doctors, hospitals and other health care providers contracted to provide services to health insurance companies customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network health care provider.

  • out-of-network (out-of-plan)

    This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan. Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health care professionals may not be covered, or covered only in part by an individual's health insurance company.

  • out-of-pocket limit (out-of-pocket maximum)

    The highest dollar amount you will ever need to pay during a plan year for covered services before your insurance pays 100% of the costs for any subsequent services.

  • preferred provider organization (ppo)

    A preferred provider organization (PPO) is a managed care organization of health care providers who contract with a health insurance company to provide health coverage to policy holders represented by the health insurance company.

  • prescription drug coverage

    When your health care plan helps pay for some or all of the costs for prescription medications.

  • provider

    A term used for health care professionals and places that provide health care services including physicians, hospitals, nurse practitioners, chiropractors, physical therapists, and urgent care centers just to name a few.

  • tax exemptions

    Generally refers to the reduction or elimination of your obligation to pay tax. As it pertains to the Affordable Care Act, individuals may be eligible for an exemption to reduce or eliminate their individual shared responsibility payment for reasons such as personal, medical, or financial hardships, just to name a few. Some exemptions are claimed when filing while others are applied for through the Marketplace.

  • tax penalty

    As it pertains to the Affordable Care Act, individuals who do not maintain qualified health insurance and are not eligible for any exemptions must make a payment when filing his or her federal tax return. The IRS calls this penalty the “individual shared responsibility payment.” 



Understanding Plan Levels

Marketplace plans are grouped into five categories – Platinum, Gold, Siler, Bronze, and Catastrophic. In the simplest terms, these categories group plans together by the level of coverage they provide. (In other words, what percentage of medical costs they cover.) Catastrophic plans may only be purchased by people under 30 years old or people with hardship exemptions. Generally speaking, these plans have lower monthly premiums and protect you from worst-case scenarios like serious accidents or illnesses.



Marketplace plans are grouped into four categories – Platinum, Gold, Silver, and Bronze. In the simplest terms, these categories group plans together by the level of coverage they provide. (In other words, what percentage of medical costs they cover.) The Bronze level plan pays about 60% of your costs and is the lowest premium payments. The Silver level plan pays about 70% of your costs and has low premiums with better coverage. The Gold level plan pays about 80% of your costs and has a high value cost-to-coverage. The Platinum plan pays about 90% of your costs and is the highest level of coverage.



It's important to consider how much you think you will use your health insurance when choosing the level of coverage and plan that's right for you. Generally speaking, if you think you’ll use your health insurance a lot, you may want to consider a Platinum or Gold plan to control your out-of-pocket costs. If you don't think you'll use your health insurance much, you may want to consider a Silver or Bronze plan. There is also a cost sharing reduction (CSR) discount that lowers out-of-pocket costs for deductibles, coinsurance and copays. To be eligible you must purchase a silver level Marketplace plan and have income below a certain threshold. 



Find An Office

With over 11,000 locations nationwide, there is an
H&R Block
that is convenient for you.

Find another office, a tax pro or manage your appointment. Search Now

Office Near

Office Near



| Office Info

Google Maps

| Office Info
Make An Appointment

This office does not take online appointments. Please call the office.

Loading content

Next Appointment:

Set an Appointment
Choose Another Time 
Make An Appointment

This office does not take online appointments. Please call the office.

Find another office, a tax pro or manage your appointment. Search Now 

Ready to file yourself?

Whether you’re a first time filer with a basic return or you have a complex tax situation, we make it easy to file online.

H&R Block Tax Software