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Health Insurance Glossary Page


Access - Your availability to medical care which is determined by where you live and the type of health care facilities available in your area.


Accident - For the purposes of health insurance, an accident is an unforeseen, unexpected and unintended event resulting in a bodily injury.


Accumulation Period - The period of time during which the policy holder (insured) of a health insurance policy accumulates eligible medical expenses which accrue towards satisfying the policy deductible.


Acupuncture -   Most health insurance policies are consider acupuncture an alternative medical treatment and may or may not be covered under the plan.  


Acute Care – Short-term but frequent medical treatment, usually in a hospital or by nursing professionals, for patients recovering from surgery or from an illness or serious injury.


Alternative Medicine –  Usually refers to the practice of medicine without the use of drugs and may or may not be covered under a health insurance policy. Many alternative medicine procedures that were once considered outside the boundaries of covered expenses are now covered under many plans such as acupuncture, osteopathic treatments and midwives services. re


Arbitration -  A legal process in which the parties agree to let an impartial third party hear the facts of the dispute and make a legally binding decision which can save a lot of time and money as opposed to going through the court systems.


Behavioral Healthcare -  The assessment and treatment of mental and/or psychoactive chemical dependency (substance abuse) disorders.


Beneficiary - The recipient of the benefits of the health insurance policy


Benefit – The amount payable by the health insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.


Brand-name drug – A prescription drug that has a specific brand name and is protected by a patent. Patents can lasts for several years and during the patent protected timeframe the drug can be produced and sold only by the company holding the patent. When the patent runs out generic versions of many popular drugs are produced and sold at lower cost by other companies.


Carrier - The carrier is the insurance company that offers the health insurance plan such as Blue Cross, Humana, Cigna, Blue Shield or United Health for example.


Carve-out - A separation from the primary group health plan designed to provide a specialized type of care, such as a retiree health carve-out. Carve-outs are also used when an employer eliminates coverage for a specific category of services (e.g. vision care, mental health/psychological services) from the group medical insurance plan.


Chronic Condition - A chronic condition is a prolonged condition which requires ongoing treatment, or treatment for a period of at least three months. Examples are asthma and diabetes.


Claim - A request by the insured (or his or her medical provider) to an individual's health insurance company to pay for services obtained from the medical provider.


Closed Practice – In an HMO medical plan a closed practice refers to a primary care doctor that is no longer accepting new patients under the HMO plan.


COBRA -  A federal law that allows an employee to continue coverage of health insurance benefits for up to 18 months at the employees expense after the employee loses the job or if the employer terminates the group coverage. Cobra premiums are too expensive for many people and a short-term or an individual health insurance policy is often times a better choice.


Co-insurance - The share (usually a percentage such as 80/20) of the covered charges in a health insurance policy that the insured (you – the policy holder)) and the insurance company each pay after the deductible has been met and until the out of pocket maximum is met. After the out of pocket maximum for the year has been met, co-insurance stops and the insurance company pays 100% of covered charges for the remainder of the year.


Coordination of Benefits – COB occurs when someone is covered under more than one health insurance plan and its purpose is to divide responsibility among plans and ensure that benefits from all plans do not exceed 100% of covered expenses.


Conventional indemnity plan - An indemnity medical plan that allows the participant of the plan the choice of any provider without effect on reimbursement. These plans reimburse the patient and/or provider as expenses are incurred.


Co-Pays - Co-payments are specified dollars amounts that an insured pays directly to the medical provider at the time the medical service is rendered.   For example, a health insurance plan may specify that the insured pay a $40 co-pay for each office visit to their doctor’s office and may also have a separate co-pay for prescription drugs of $25 for each pharmacy prescription filled for example.


Deductible - A fixed dollar amount an individual must pay for health care expenses before the insurance plan will cover any of the costs. Different plans may have different exceptions for yearly deductibles. Some plans for example, will waive the deductible for yearly check-ups or routine doctor visits. The higher the plans deductible is, the lower the monthly insurance premium will be.


Dental Health Maintenance Organization (Dental HMO) – Provides dental services through a network of dental providers. Members pay a fixed monthly fee for services instead of a separate charge for each visit. Members pick a primary care dentist and the plan will not pay for dental specialist unless the primary care dentist refers the member.


Dental Preferred Provider Organization (Dental PPO) – Members receive dental care through a network of dentists that offer dicounted dental service fees to its members. 


Dependents – The primary insured’s spouse and/or unmarried children and can include the insured’s adopted and/or step children.


Disease Management – A system for patients that have specific chronic medical risks where preventative, diagnostic, and therapeutic techniques are implemented to provide quality and cost-effective healthcare.


Dual Eligible – Patients that due to certain qualifications, qualify for both medicare and Medicaid benefits.


Effective Date - The date your insurance coverage becomes effective. This date is usually requested on your health insurance application. Insurance companies will usually allow you to request coverage to begin as soon as the application is approved or up to 75 days in the future.


Enrollment Period – The period when an individual may apply for enrollment or change a health insurance plan. For example, Medicare open enrollment period is November 15 through December 31 each year.


Exclusions – Items that are not covered under a health plan are excluded from coverage. Most plans have common exclusions such as cosmetic surgery. Other plans will exclude certain pre-existing conditions that applicants either for the life of the policy or for a pre-defined period of time after which those exclusions would then be covered. 


Exclusive Provider Organization (EPO) plan – EPO plans are similar to HMO plans in that members, in order to be covered, must visit in-network doctors only. EPO members, however, do not select a primary care doctor like an HMO plan and do not need a referral to see a specialist as long as the specialist is in the EPO network. Exceptions for out of network visits are made in the event of an emergency.


Explanation of Benefits -  The insurance company's written decision and explanation regarding you claim. The explanation of benefit will list what the insurance has paid (or will pay) and what the patient is responsible for paying.


Evidence of Insurability (EOI) – EOI is proof that you are in good health. It is usually in the form of a medical exam although not all health insurance plans require a medical exam.


Fee for Service – A type of health insurance that allows you to choose any doctor you want but requires you to pay for the services yourself and then file claim for reimbursement with the health plan.


Flexible spending accounts or arrangements (FSA) – Usually associated with an employer, an FSA allows an employee to put aside money, tax-free from their paycheck to be used to pay medical expenses. The employer also can contribute to the employees FSA. Most FSA plans have a “Use it or Lose it” provision which means that any funds not spent by year’s end are forfeited.


Free Look Period – The period of time that the insurance company allows you to cancel the policy and receive a full refund. Most health insurance plans give you 10 days from the date you receive the policy and some plans (like medicare) may give up to 30 days in the free look period.


Gatekeeper – The term used to describe the primary care doctor in an HMO plan.


Generic Drug: After the patent on a brand name drug expires, other drug companies are allowed to sell a duplicate of the original drug under a different “Generic” name. Once the drug is generic they cost leass than the original and health plans usually require or reward the member for using the less expensive generic drug.


Grace Period – The period of time allowed to make a premium payment after the due date of the premium without having the insurance terminate for non-payment of premium.


Guaranteed Issue – A guaranteed issue plan can be approved irrespective of any medical underwriting or pre-existing condition.


Group Health Insurance - When health insurance coverage is obtained through your employer or other entity that covers a group of people .


HMOs - Health Maintenance Organizations are a type of health insurance plan. When selecting an HMO plan, members choose a primary care doctor. Once the member of the HMO selects his or her primary care doctor the member is required to visit the primary care doctor first for all non-emergency health issues.


HIPAA: "The Health Insurance Portability and Accountability Act of 1996.”  The federal law is designed to provide privacy standards to protect patients' medical records and other health information provided to health plans, doctors, hospitals and other health care providers. Developed by the Department of Health and Human Services, these new standards provide patients with access to their medical records and more control over how their personal health information is used and disclosed.


Hospital Indemnity Policy – This type of policy pays a pre-determined fixed cost for each day that you are in the hospital, irrespective of the actual costs.


Hospital Pre-certification – Most plans require approval or pre-certification before the insured enters the hospital. Exceptions are made for emergency situations.


Indemnity plan - A type of health insurance plan also called a “fee-for-service” that will reimburse the patient and/or the medical care provider as expenses are incurred.


In-network – Insurance companies havenegotiated rates with healthcare providers. These providers that have agreed to certain rates are providers that are in the plans network or “In-Network” and are almost always less expensive than seeing an out-of-network provider.


Independent Practice Associations -  IPAs are comprised of a group of independent doctors and are similar to HMOs, except that enrolled members receive care in the doctor’s own office, rather than in an HMO facility.


Individual Health Insurance - When you maintain and pay for your own or your family’s health insurance policy and are not part of a group policy.


Insured – The person or organization that is covered under the plan.


Lifetime Maximum – The total maximum dollar amount a health plan will pay in benefits to an insured individual while the person is alive and covered under the plan during that individual's lifetime.


Long-Term Care Policy - Insurance policies that cover specified services for a specified length of time to people who have a chronic illness or disability.  Most long term care policies include covered services such as home health care services and custodial care.


Long-term Disability Insurance – Designed topay an insured a percentage of their monthly earnings should they become disabled.


LOS - Length of Stay. This is a term used by insurance companies to describe the amount of time an individual stays in a hospital or an in-patient healthcare facility.


Medicare - A federal health insurance program for people age 65 and older and certain disabled Americans. Medicare is a fee-for-service program that allows patients to see any participating doctor or hospital. Medicare then pays the provider directly for eligible services. Medicare has two primary parts: Part A, which covers hospital services, and Part B, which covers doctor services. Additional parts C provide flexibility and are often referred to as Medicare Advantage Plans and Part D offer prescription drug coverage.


Medicaid - Medicaid is an entitlement program that provides health and long-term care coverage to certain categories of low-income Americans with few resources. Each State designs their own Medicaid programs within broad federal guidelines.


Managed Care - A healthcare delivery system that is set up to manage the quality and the cost of medical services that individual members receive. Managed care plans usually offer HMOs, PPOs, EPOs and POSs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality by emphasizing preventative care.


Mandated Benefits – Benefits in a health insurance plan that State or Federal law mandate as required benefits to be included in the plan.


Maximum out-of-pocket expense - The maximum dollar amount that a  member will pay out of pocket during the year. After the maximum out of pocket expenses are reached, the health insurance carrier pays all covered expenses up to the plan’s lifetime maximum.


Maximum plan dollar limit - The maximum amount payable by the health insurance for covered expenses for the insured and each covered dependent while covered under the health plan.


Medical savings accounts (MSA) – A savings account set up to save on a tax free basis to cover out-of-pocket medical expenses. MSAs are usually associated with high deductible medical plans.


Medigap Insurance Policies - Medigap insurance plans are supplemental plans designed to fill in different “gaps” in Original Medicare coverage. There are up to 12 different plans that are labeled “A” through “L” each with a different set of benefits and prices. Medigap plans are offered by private insurance companies, not the government.


Network: A group of physicians, specialists, hospitals, and other health care providers who agree to provide medical services to HMO or PPO members under a health insurance plan.  Insured members almost always pay less for using a network provider as opposed to using an out-of-network provider.


Non-emergency weekend admission restriction – A restriction that limits reimbursement to patients for non-emergency weekend hospital admissions. 


Open Enrollment: This is the specific period of time during which anyone regardless of medical history may enroll with a certain HMO or medical insurance plan.


Out-Of-Plan: These are facilities or service providers that are not covered by the standard plan you have purchased. If your  HMO or PPO doesn’t cover treatment from a doctor or clinic, but you’ve already received care, your expense may not be covered at all, or you may only be partially covered.


Out-Of-Pocket-Maximum: This is a pre-determined amount of money that an insured person must pay out of their own funds before their insurance covers 100 percent of costs.


Outpatient Services: These are any services or treatments a patient receives without an overnight stay in the hospital. Also referred to as ambulatory services, some plans will only cover particular procedures if they are done on an outpatient basis.


Physical Examination:  This is a basic medical assessment of insurability. A series of tests whereby insurance companies determine their own cost risk of insuring you based on health risks present during your physical examination.


Plan Administration: These are all the duties that an insurance provider must be responsible for besides providing care. These duties include answering phones and questions, enrolling new members, collecting premiums etc.


Point-Of-Service Plan: These plans include a network of  providers that you are allowed access to like an HMO, except that you can also receive service outside of network without seeking pre-approval. The treatment may be more expensive, and may not be covered in full, but you can still elect to receive it.


Pre-Admission Certification: These are tests done prior to hospital admission to endure tha patients are not receiving improper or inappropriate care. If you fail to obtain this certification in a non-emergency situation


Pre-Certification: See Pre-Admission Certification.


Pre-Existing Conditions:  Any medical or mental conditions or injuries that the patient had before applying for medical coverage through a plan. Providers may deny coverage for a certain illness for a period of time, but the Affordable Care Act will make denying customers coverage for pre-existing conditions illegal by 2014.


Pre-Admission Testing: Healthcare providers encourage this type of testing to then recommend outpatient service prior to a non-emergency hospital admission. The testing along with the outpatient services usually shorten the hospital stay and save the insurance company and the patient money.


p>(PPO) Preferred Provider Organization:  this is similar to the “in-network provider” in an HMO plan. Individuals or groups on a PPO plan receive discounted rates for receiving services from particpating providers in the netwrok but is different than an HMO in that you may see any doctor or specialists in the network without having to obtain a referral from a primary care doctor.


Premium:  This is how much you pay monthly or yearly for insurance.


Primary Care Provider: This health care professional is the person most responsible for treatment decisions and making sure all of the healthcare needs of the patient are considered. This person can also make recommendations for their patient to see specialists, or deny the patients requests to see a certain doctor. Sometimes called the gatekeeper.


Primary Plan: This plan must pay first if you have more than one insurance plan. The primary plan pay before all others, and only once it has paid in full will secondary or tertiary insurance kick-in.


Prior qualifying coverage:  This is coverage from a health plan that was active before the effective date of the new or current coverage.


Private Health Insurance: These are privately owned companies that provide coverage to two thirds of non-elderly Americans. These providers currently dominate the healthcare landscape.


Provider: this is any group or individual that provides service to a patient in order to treat a condition.


Reasonable and Customary Fees: When an insurer is billed for payment by a provider, they use details regarding the type of treatment, the expertise of the provider, and other common charges for the same procedure from other providers in the same geographic area to determine the ‘reasonability’ of the charges the doctor assessed.


Reinstatement: This refers to a process whereby, if past-due premiums are paid, a lapsed insurance policy can again be activated.


Reinsurance: the sharing of risk by multiple companies for a group policy under which only one insurer assumed the risk of the all of the members of the group policy.


Renewability: This is a measure insurance companies use to determine the terms of renewing an individual or group policy at the end of it’s scheduled term, usually one year. In group plans, the years worth of experience in claims by the group is figured in the determination of the next terms premium. In other words, the way you and your coworkers file claims with your insurer determines the entire group’s premiums for the next term. 

When determining the renewability of individual term health plans, the claims experience of all other ‘similar’ individual health plans currently underwritten by that company are usually used to determine changes to costs and benefits. This attempts to create the effect of adjusting the premiums of everyone in a similar economic, medical, And coverage situation, to also reflect that similarity.


Rider: A rider is a document that modifies the provisions of an otherwise ‘standard’ insurance policy. These can change coverage options, costs, benefit delivery type, and all other manner of specifics about the policy.


Secondary Plan: This term applies only to an insurance policy that pays ‘second’ to a primary insurance plan which MUST pay first. A secondary insurance policy will not release benefits unless they are to cover qualifying costs greater than the benefit amount your primary policy provides for the procedure etc.


Second Opinion: This is a second consultation regarding a certain condition- which is recommended after that condition has been diagnosed by a medical professional as needing serious treatment or surgery. 

Often times the insurer will require second opinions be ascertained when serious and costly surgery is recommended by one physician. If this is the case, or if the insured have themselves requested a second opinion which has been deemed necessary by the insurer, then the provider pays for a second consultation with a different doctor. This second doctor must either concur with treatment, or recommend another course of action.


Self Insured Plan: This is a type of insurance plan in which an employer absorbs most to all of the cost of their employees’ group coverage plan. To prevent major incidents bankrupting or disrupting the financial situation of the company, most employers purchase stop=loss coverage with these plans, which only kick in when an insurance claim has costs that could be considered  catastrophic to the employer.


Short Term Disability: This is temporary coverage. The term on temporary coverage seldom exceeds a period of six months.


Small Employer Group: In most states this refers to all group policies obtained by businesses that employ less than 100 people.


Specific Disease Policy: These plans are created with the intention of covering expenses only for a particular disease that is named in the policy. They can also be called Dread Disease Policies.


State Mandated Benefits: These are particular benefits included in a policy as per a state-law or state insurance requirement.


Stop- Loss: This is the point at which your insurer begins to pay 100 percent of medical cost. Stop-loss point is reached when you reach 100 percent of your out-of-pocket maximum including deductible.


Stop-Loss Clause: This particular clause of an insurance policy may specify maximums for different types of treatment. For example there may be a limit to the total number of payments a company will make on your psychiatric coverage during a given term. The Affordable Care Act will completely eliminate LIFETIME maximums on all American policies signed after 2014. 

Stop-loss can also refer to a risk management strategy that use multiple insurance companies to share risk.


Student Health Insurance: More than 80 percent of four-year colleges offer their own health insurance coverage for students. Sometimes staying on your parents’ insurance plan can be more affordable, but because of discounts at student health centers and affordable rates more often than not the schools insurance is a great option for an average-to-low-income family. Recently many colleges have begun requiring proof of insurance for students. 

If a student is denied coverage for a pre-existing condition or cannot afford coverage for themselves for whatever reason, they may still qualify for a state-sponsored risk pool to still provide them coverage.


Third Party Administrator: This is a group or individual who is hired as an independent contractor to handle claims service, process premiums, and administer employee benefits of any group insurance plan.


Underwriter: This is usually the insurer, or the person who assumes financial risk, issues benefits, and collects premium. Underwriting is a process by which insurers enroll people in their coverage plan and assume their financial risk in exchange for a premium payment.


UCR or Usual, Customary and Reasonable Expenses: These are the usual fees for a service charged by a provider based on other providers charges in that geographic area. Most indemnity plans use UCR charges to determine benefit reimbursement. This is opposed to the PPO style of billing and reimbursement that allows a fixed maximum dollar amount for each procedure and will pay up to that point. If your doctor charges more for a procedure than other doctors in his area and the UCR is less than the real charges of the doctor, you usually must pay the balance.


URS or Utilization Review Services: These are reviews of treatment or care provided to insured persons that are performed on a case-by-case basis. They determine the appropriateness and quality of the care before, during, or after services have been provided as treatment. This is like a medical audit by an insurance provider to see where their dollars are heading.


Waiting Period: This is either the period you must wait to enroll in your employers’ healthcare coverage, or the amount of time you must wait once enrolled to receive benefits for a pre-existing or specific condition.


Waiver:  This is an amendment to an insurance policy surrendering certain treatments, care for certain conditions, or particular benefits. Waivers are like riders that take parts of a policy away to make it leaner and more tailored to your needs.