The healthcare industry has A LOT of complex jargon, acronyms and unique terminology making it difficult to understand the basics. To learn how to “talk the talk,” Dr. Eric Bricker, Chief Medical Officer and Chief Growth Officer at First Stop Health, has defined the top six terms to know:
BUCA (Blue Cross, United Healthcare, Cigna, and Aetna)
This acronym represents the 4 largest commercial health insurance companies that most employers in the US use to provide health insurance for their employees. CVS bought Aetna several years ago, so sometimes it is referred to as CVS/Aetna or sometimes just as CVS Health.
Blue Cross Association
There are about 33 Blue Cross companies in the US. They typically give each other geographic exclusivity so that they do not compete with each other. There are many Blue Cross plans for individual states (e.g., Blue Cross of Michigan), but not all plans have the state’s name in it (e.g., Horizon Blue Cross is the Blue Cross plan for New Jersey). Some plans have come together to form larger companies (e.g., Health Care Services Corporation (HCSC)) is a combination of Blue Cross of Illinois, Texas, Louisianna, Oklahoma and Massachusetts). It’s quite a web!
Most Blue Cross plans are not-for-profit organizations. However, the largest combination of Blue Cross Plans is called Anthem Blue Cross, which is a for-profit, publicly traded company and combines California, New York, Indiana and other state-based Blue Cross plans.
Medicare is the Federal Government health insurance program for those aged 65+. It covers those with a few select conditions (most commonly kidney failure requiring dialysis) that permanently disable someone, as well. It includes Parts A (hospital insurance), B (medical insurance) and D (drug plan). It is funded through taxes and monthly premiums paid by those enrolled. About 60% of people with Medicare have Traditional Medicare.
Medicare Advantage (aka, Medicare Part C)
The remaining 40% of people with Medicare choose to have their Medicare coverage through a private insurance company. A senior might choose a Medicare Advantage plan over a Traditional Medicare plan because typically, Medicare Advantage plans have $0 monthly premiums and include free dental and vision coverage. In exchange for that, however, members have less choice in doctors and hospitals than those enrolled in Traditional Medicare and often must receive approval from an assigned Primary Care Provider (PCP) before they can see a specialist (e.g., dermatologist). Blue Cross, United Healthcare, Cigna, Aetna and other health insurance companies all have Medicare Advantage plans for seniors.
Medicaid is the health insurance program for low-income people. Each state has its own Medicaid program, which is jointly funded (about 50/50) by each state and the Federal Government. The state chooses how to administer that program (i.e., eligibility, benefits, etc.). In the state of Illinois, for example, a single person would need to make <$13k annually to qualify.
Each state then contracts with one or multiple health insurance companies to administer the Medicaid plans. Blue Cross, United Healthcare, Cigna and Aetna all have Medicaid programs in various states, so a Medicaid enrollee may still have a Cigna insurance card.
PBM (Pharmacy Benefits Manager)
This organization processes claims for medications. While it’s separate from the insurance company, each of the health insurance companies owns and runs their own PBM (e.g., United Healthcare owns Optum Rx, CVS Health owns Caremark, Cigna owns Express Scripts, now called Evernorth, and many of the Blue Cross plans own Prime Therapeutics).