Glossary of Health Insurance Terms

Commercial Health Insurance -

Health insurance offered by private for-profit companies in exchange for a premium paid by enrollees. Commercial insurance plans can be structured in many different ways and are frequently offered with numerous plan types. Also known as private health insurance. Also known as Private Insurance.

Coverage -

An agreement between you and your insurer where they cover some of your health care costs in exchange for a premium. If you have coverage in place, you have agreed to the terms of the agreement.

Covered Benefits -

The entire package of defined medical procedures, therapies, prescriptions and services listed within your insurance plan documents in which the insurer agrees to provide compensation on your behalf. Also known as Benefits.

Covered Services -

The medical services, procedures or treatments that are listed within your coverage details that the insurer has agreed to provide payment on your behalf.

Cost-Sharing (or out-of-pocket costs) - In addition to premiums, many plans use other ways to share costs for medical expenses between the insurance company and the patient. There are three types of cost sharing: “co-pays,” “deductibles,” and “co-insurance”:

Co-Pay (or co-payment) - A flat amount you pay when you get medical care. For example, you may have a $20 co-pay for a visit to a primary care doctor and a $25 co-pay for prescriptions.

Co-Insurance - This cost-sharing method usually kicks in after you hit your deductible. It requires a patient to pick up a certain percentage of the cost of a procedure while the plan covers the rest. For example, a plan with 80/20 hospital co-insurance will cover 80% of the cost of your hospital stay, and 20% of the costs will be your responsibility.

Co-insurance: - The amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. The co-insurance rate is usually expressed as a percentage. For example, if the health insurance company pays 80% of the claim, you pay 20%.

Coordination of Benefits: - A system to eliminate duplication of benefits when you are covered under more than one group plan. Benefits under the two plans usually are limited to no more than 100% of the claim.

Co-payment: - Another way of sharing medical costs. You pay a flat fee every time you receive a medical service (for example, $20 for a visit to the doctor) and the health insurance company pays the rest. Be aware that for pharmacy charges, this expense occurs for every 30-day supply of medication. Getting a 90-day supply at once will require three co-payments.

Covered Expenses: - Most health insurance plans, whether they are fee-for-service, HMO or PPO, do not pay for all services. Some may not pay for certain prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for; they are listed in the health insurance policy.

Customary Fee: - Most health insurance plans will pay only what they call a reasonable and customary fee for a particular service. If your doctor charges $1,000 for a hernia repair while most doctors in the area charge only $600, you will be billed for the $400 difference in addition to the deductible and co-insurance you would be expected to pay. To avoid this additional cost, ask your doctor to accept your health insurance company’s payment as full payment, or shop around to find a doctor who will.

Deductible: - The amount of money you must pay each year to cover your medical care expenses before your health insurance policy starts paying.

Deductible - The amount which you must pay yourself before your insurance covers any costs. For example, a plan with a $1,000 deductible would require you to pay for your first $1,000 of medical care each year before the insurance company would cover any portion of the cost. Office visits are usually exempt from the deductible, meaning you would just pay the co-pay amount.

Exclusions: - Specific conditions or circumstances for which the policy will not provide benefits.

Explanation of Benefits (EOB): - A statement—not a bill—sent by the health insurance company to the policy holder (student, parent or family member, depending on who bought the policy) explaining what medical treatment and/or services were paid for on their behalf. An EOB typically describes: 1) the service performed—the date of the service, the description and/or insurer’s code for the service, the name of the person or place that provided the service and the name of the patient; 2) the doctor’s fee and what the insurer allows—the amount initially claimed by the doctor or hospital, minus any reductions applied by the insurer; and 3) the amount the patient is responsible for.

Employer-Based Health Plan -

Health insurance sponsored and coordinated by your employer and available to you as an employee. Many employer-based health plan premiums are covered in part by the employer, lowering the amount you owe in premiums. Also referred to as job-based health plans.

Enrollment Date -

The date when you signed up for health insurance and officially submitted your application and enrollment paperwork.

Health Insurance Card -

A wallet-sized card issued by your insurer when enrollment is complete and coverage begins. The card serves as proof of insurance and contains basic information regarding the insured member, the plan structure, co-payments and co-insurance and has contact information to reach the insurer.

Health Insurance Marketplace -

A shopping resource where people can compare, research and purchase insurance plans for the next plan year. Marketplaces are available in each state and are the only places where you can qualify and receive premium tax credits to help offset the cost of your monthly premium for the plan you select. Also known as Marketplace.

Health Insurance -

A type of contract in which you agree to pay a premium to a company in exchange for help paying for the cost of medical services should you require them during the time period of coverage. You must pay the premium even if you do not receive any care during that period. Also known as Insurance.

Health Maintenance Organization (HMO) -

A plan where you pay a higher premium in exchange for defined co-payments and co-insurance amounts associated with care due at the time of service. Most HMO's do not have a deductible, and are structured to reduce the exposure to large out-of-pocket costs. HMOs may also require your care to be provided by members of its network in order to be covered, with limited or no benefits for care received by a provider outside of this network.

High Deductible Health Plans -

A plan that typically has lower premiums but higher deductibles that must be met before the insurer begins to pay toward your care.

HMO (Health Maintenance Organization): - An HMO is a prepaid health plan. You pay a monthly premium and the plan covers doctors’ visits, hospital stays, emergency care, surgery, checkups, lab tests, X-rays and therapy. You must use the doctors and hospitals designated by the HMO. Some insurance company policies may require you to change to a local primary care physician (PCP). Contact your insurance company for specific details.

Insurance -

A type of contract in which you agree to pay a premium to a company in exchange for help paying for the cost of medical services should you require them during the time period of coverage. You must pay the premium even if you do not receive any care during that period. Also known as Health Insurance.

Managed Care: - Ways to manage costs, use and quality of the health care system. All HMOs and PPOs, and many fee-for-service plans, have managed care.

Marketplace -

A shopping resource where people can compare, research and purchase insurance plans for the next plan year. Marketplaces are available in each state and are the only places where you can qualify and receive premium tax credits to help offset the cost of your monthly premium for the plan you select. Also known as Health Insurance Marketplace.

Maximum Out-of-pocket Expenses: - The most money you will be required to pay per year for deductibles and co-insurance. It is a stated dollar amount set by the health insurance company, in addition to regular premiums.

Navigator -

An individual or organization that is trained to help you when shopping for insurance, and can assist in completing enrollment forms or evaluating plan options. Navigators are required to be unbiased and work to help you find the best health plan for your needs, all at no cost to you.

Network -

Medical providers that have contracted with your plan to provide your care at a reduced negotiated rate. This group of providers is referred to as your network or your insurer's network.

Non-cancellable Policy: - A policy that guarantees you can receive health insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.

Open Enrollment -

A defined period of time each year when an individual may select or change his or her health insurance plan for the following plan year. Open enrollment periods and time of year vary based on whether you are seeking Commercial insurance, employer-based insurance or Medicare insurance. Medicaid does not have an open enrollment period.

Out-of-Pocket Maximum - The maximum amount you could have to pay in a year in out-of-pocket costs. Once you’ve paid this amount in the year, your insurance covers 100% of the costs of any additional medical care.

Preferred Provider Organization - A type of health plan provided to you in exchange for your premium, that allows you access to a network of medical providers, such as hospitals and doctors who agree to provide you care at a discounted rate. This plan type may allow care outside of these providers, but typically will do so at a higher cost to you. Also seen as PPO.

Premium Tax Credit -

A tax credit that can help you afford health coverage through the Health Insurance Marketplace by providing instant savings on premium payments. In order to receive the Premium Tax Credit you must meet and maintain eligibility criteria throughout your plan year. Also known as Tax Subsidy.

Premium -

When you decide to enroll in a health plan, this is the amount you agree to pay in exchange for having an insurer issue you insurance coverage. This amount is typically due on a monthly basis but can be charged in other frequency. You must pay the premium amount regardless if you receive any care by medical providers during your plan term. If you do not pay your premium, you are canceling the contract and the insurer does not have to pay towards your care.

Private Insurance -

Health insurance offered by private for-profit companies in exchange for a premium paid by enrollees. Commercial insurance plans can be structured in many different ways and are frequently offered with numerous plan types. Also known as private health insurance. Also known as Commercial Health Insurance.

PPO (Preferred Provider Organization): - A combination of traditional fee-for-service and HMO. When you use the doctors and hospitals that are part of the PPO, a larger part of your medical bills can be covered. You may use other doctors, but at a higher cost.

Pre-existing Condition: - A health problem that existed before the date your health insurance became effective.

Premium: The amount you or your employer pays in exchange for health insurance coverage. Premiums are usually quoted as a monthly price. For employer-provided insurance, the premium is usually shared between the employer and the employee.

Primary Care Physician (PCP): - Usually your first contact for health care, this is often a family physician or internist, but some women use their gynecologist. A primary care physician monitors your health and diagnoses and treats most health problems, and refers you to specialists if another level of care is needed. In many health insurance plans, care by specialists is only paid for if you are referred by your primary care physician. An HMO or PPO plan will provide you with a list of doctors from which you will choose your primary care physician (usually a family physician, internist, obstetrician-gynecologist or pediatrician), though PPOs allow members to use primary care physicians outside their PPO network at a higher cost. Indemnity plans cover services by any doctor. Some insurance company policies may require you to change to a local primary care physician (PCP). Contact your insurance company for specific details.

Provider: - Any person (doctor, nurse or dentist) or institution (hospital or clinic) that provides medical care.

Tax Subsidy -

A tax credit that can help you afford health coverage through the Health Insurance Marketplace by providing instant savings on premium payments. In order to receive the Premium Tax Credit you must meet and maintain eligibility criteria throughout your plan year. Also known as Premium Tax Credit.

Third-party Payer: - Any payer for health care services other than you. This can be an insurance company, an HMO, a PPO or the federal government.

Uncovered Services -

Healthcare your insurer has stated that it does not pay for, as defined in your plan language. Also known as Excluded Services.

: -

: -