Health Insurance Glossary

A

ACTUARY

The person responsible for figuring the cost companies must charge for of premiums using a mathematical equation based on the amount of claims paid versus the revenue collected by your insurance company.

ADMITTING PRIVILEGES

A doctor's retained right to admit his/her patients to a particular hospital.

ADVOCACY

Any activity that helps an individual or a group attain what they want or need.

AGENT

Licensed insurance salespeople whose job it is to provide health care plan information to the consumer.

B

BENEFICIARY

A person selected by the plan holder to receive the benefits.

BENEFIT(S)

The amount paid by the insurance company to the plan holder, assignee or beneficiary.

BRAND NAME DRUGS

Prescription drugs that are marketed by specific companies under specific names (like Lipitor, Viagra, Prozac, etc.). After an initial product release, and as patents on a new drug run out, other companies market generic brands of the same drug, often at a discount.

BROKER

A licensed insurance sales agent assigned to obtaining quotes and and plan information tailored for your needs.

C

CAPITATION

A set dollar amount you or your employer pays to your insurer, regardless of the amount of services you do or don't use in a calendar year.

CARRIER

The insurance company (or HMO) that carries your plan.

CASE MANAGEMENT

The process of managing your insurance policy relationship with your insurer. This is a system used by insurance companies that ensures you receive reasonable and appropriate health care services under your plan.

CERTIFICATE OF INSURANCE

The written contract between you and your insurer. It should always disclose what services are covered, premium and co-pay details and limits information.

CLAIM

The legal request from you to your insurer/provider that asks the company to cover any health service costs that have been or will be incurred.

CO-INSURANCE/CO-PAYMENT

Co-insurance is a pre-determined amount of money that you are required to pay to your insurer for services rendered after the deductible has been met. This money often plays out as a co-payment paid upon each doctor's visit or pharmaceutical order. Often, co-insurance is referred to as a "split". A common split is 80 percent /20 percent-- your insurer paying the larger portion.

CO-PAYMENT

Co-payment is a pre-determined fee issued by your various providers and paid upon the date of the service, above and beyond the policy coverage for that service. Usually a co-pay is incurred upon each doctor's visit and is formulated on a flat-fee basis, depending upon the terms of your policy. Most co-pay fees run from $10 - $100.

COBRA

A federally instituted program that allows you to purchase, for a discounted rate, an extension on your personal health insurance after your job and coverage have been terminated. The COBRA plan generally lasts up to 18 months; a one-time deal per career change or job loss.

D

DEDUCTIBLE

The money you pay for your health care services before your insurer covers their part. Generally, there's a pre-determined, annual sum chosen.

DENIAL OF CLAIM

When your insurer refuses to pay your insurances services claim you or your employer made.

DEPENDENTS

Your spouse and or unmarried children, no matter the familial line, that qualify for insurance benefits under your plan.

E

EFFECTIVE DATE

The date your insurance coverage actually begins. Many plans will retroactively bill your insurer if you accrue costs before the effective date, but be sure to check this before you sign on a policy.

EMPLOYEE ASSISTANCE PROGRAMS (EAPs)

These can be mental health or alternative therapy services that fall beyond the boundaries of your health insurance policy that are covered instead by your employer.

EMPLOYER -SPONSORED HEALTH INSURANCE

Generally referred to as group health insurance. Costs are spread out among members of a purchasing group, be it a business, union or non profit organization.

EXPLANATION OF BENEFITS

The written explanation of a claim that lists what is covered by the insurer and what you must pay.

G

GENERIC DRUGS OR PHARMACEUTICALS

A non-name brand of pharmaceuticals, usually released by a drug company after the originating company's patent has run out.

H

HEALTH CARE DECISION COUNSELING

A type of counseling delivered by either your insurance company or you employer that is designed to help you select the most affordable and appropriate insurance policy for you and your family or business.

HEALTH CO-OPERATIVE

Currently proposed as a alternatives to the potential public or government health plan option on the pending Health Care Bill, these cooperatives would be structured as non-profits and owned by their contributing members. They would offer lowered health care costs and more flexibility when choosing services and providers of health services.

HEALTH MAINTENANCE ORGANIZATIONS (HMOS)

Insurance plans where you or your employer pays pay a fixed monthly service fee instead of separate charges for each service. Your monthly fee remains unchanged no matter what service you use.

THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 (HIPAA)

This is a federal law that:

• Allows you to qualify for a similar health insurance plan when you change your employment.


• Equalizes standards for health insurance information exchange from your provider to other providers and your insurer.


• Requires a national identification systems for health patients, insurance companies, providers and employers.


• Regulates the protection of the security and privacy of your personal healthcare history and rights.

I

IN-NETWORK

Healthcare providers that are approved by your insurer for your services.

INDEMNITY HEALTH PLAN

Also called "fee-for-service" health plans. Generally these services function under the percentage plan where you pay a portion of your bill and your insurer pays the rest.

INDEPENDENT PRACTICE ASSOCIATIONS

Very similar to HMOs, except that IPA clients generally receive health services in their physician's office rather than clinics or HMO facilities.

L

LIMITATIONS

Limits placed on benefit coverage for a particular expense. This limitation will be disclosed on the details of your coverage plan.

LONG-TERM CARE POLICY

Policies offered by your insurer that cover specific long term care needs such has hospice, nursing or end-of-life care.

LONG-TERM DISABILITY INSURANCE

A kind of insurance that will pay a portion of your usual monthly earnings should you become disabled.

M

MANAGED CARE

A healthcare system that is designed to manage the quality and cost of your healthcare plan.

MAXIMUM DOLLAR LIMIT

A pre-determined, maximum amount of money that an insurer will pay for claims over a time period. These amounts will vary depending on your plan and may have other limits based upon special services or illnesses.

MEDIGAP INSURANCE POLICIES

A policy designed to pay some of the costs that your insurer, Medicare and Medicaid won't cover. It is NOT a government covered policy but a private, supplemental one.

MULTIPLE EMPLOYER TRUST (MET)

A trust group consisting of a few small employers in the same kind of industry, formed precisely for the purpose of buying group health insurance for their employers at a lowered cost.

N

NETWORK

The group of medical service providers who are listed under your policy, by your insurer, as useable for your medical needs. These providers agree to work for a discounted rate under your plan.

O

OPEN-ENDED-HMOS

HMO plans that allow you to use out-of-plan or out-of-network providers at no additional cost.

OUT-OF-PLAN OR OUT-OF-NETWORK

A phrase that refers to medical service providers that are out of your insurer's network of approved list. Your insurer may or may not cover some or all of the costs incurred from visiting your out-of-plan provider.

OUT-OF-POCKET-MAXIMUM

A pre-set, yet limited, amount of money you are required to pay, according to the terms of your policy, before your insurer kicks in their portion.

OUTPATIENT CARE

Health care services that are performed on an outpatient system only.

P

PLAN ADMINISTRATION

The people at your insurance company who supervise the details of your health plan, such as answering questions, enrolling new members, billing, etc.

PRE-EXISTING CONDITIONS

An illness or disease or complication that you already have when you sign up for your health care plan with an insurer.

PRE-ADMISSION TESTING

Medical tests that are required before you are admitted into a hospital or inpatient health care facility.

PREFERRED PROVIDER ORGANIZATIONS (PPOS)

PPO's differ from HMO's in that you are allowed to choose your own provider from any network and are able to see a specialist or use emergency care without a referral.

PRIMARY CARE PROVIDER (PCP)

The health care provider or physician chosen by you to be your major health care provider.

PRIVATE HEALTH INSURANCE

The dominant form of health care services in the U.S. today, opposite of public health insurance.

PROVIDER

A health professional that provides your health care services.

R

RIDER

A change or modification made to your policy regarding adding or excluding coverage.

RISK

This term represents the possible loss of income to your insurer based upon certain probabilities like surgical complications, side-effects from medication, exposure to infection or unhealthy life style choices.

S

SECOND-OPINION

A term that refers to your right as an insured client to find another medical professional's opinion when asked to submit to surgery, therapy or tests.

SHORT-TERM HEALTH INSURANCE

A type of insurance that covers you for a short period of time, generally 30 days to 18 months.

STATE-MANDATED BENEFITS

Benefits that are required by your state to be included in health care plans.

STOP-LOSS

When you have paid 100 percent of your deductible and out-of-pocket expenses, the stop-loss clause covers the rest of your services bill.

STUDENT HEALTH INSURANCE

A kind of insurance geared toward full-time college students. Some plans allow students to be covered by their parents' plan up to a certain age or those provided by your school.

T

TRIPLE-OPTION

Plans provided by insurers that offer three kinds of coverage options, usually an HMO, PPO or a traditional indemnity plan.

U

TRIPLE-OPTION

Plans provided by insurers that offer three kinds of coverage options, usually an HMO, PPO or a traditional indemnity plan.

W

WAITING PERIOD

The period of time between the beginning of your insurance policy plan and/or certain prescribed periods of time that your insurance is withheld as approval is researched.