GLOSSARY OF HEALTHCARE TERMS
Affiliation period - the time a Health Maintenance Organization (HMO) may require you to wait after you enroll and before your coverage begins. HMOs that require an affiliation period cannot exclude coverage of pre-existing conditions.
Alternative medicine - (also called alternative therapy or complementary medicine) comprises a wide range of philosophies, approaches and therapies including acupuncture; herbal medicine; chiropractic care; and mind/body techniques such as relaxation, visualization, talk therapy, hypnotherapy, yoga, and meditation. Insurance companies are less likely to cover these therapies.
Board certified - a physician who has passed a written and oral examination given by a medical specialty board and has been admitted to membership by the governing group for that specialty.
Catastrophic health insurance - is characterized by large deductibles (as high as five and ten thousand dollars) and lower monthly payments. These policies typically cover only big health and hospital expenses, while you pay out-of-pocket for routine care such as doctor visits and prescribed medicines. Once the deductible is met, however, the policies typically pay for most or all medical health care costs.
Claim - a health-related bill submitted for payment to a health insurance company by the policy holder or health care provider.
COBRA coverage - if you voluntarily resign from a job or are terminated for any reason other than "gross misconduct," you are guaranteed the right to continue your former employer's group plan for individual or family health insurance for up to 18 months at your own expense. In many cases, your spouse and dependent children are also eligible for COBRA coverage.
Co-insurance - the amount of money you pay for covered services, usually expressed as a percentage of the total. Co-insurance applies to indemnity plans, out-of-network Point-of-Service (POS) and Preferred Provider Organization (PPO) plans.
Coordination of Benefits (COB) - the health plan provision that determines the order in which benefits will be paid when an individual is covered under two medical insurance plans. This provision prevents double payment of benefits.
Co-payment (co-pay) - a flat dollar amount paid for a medical service by an insured person. Insurance companies use co-payments to share health care costs although the co-pay is often only a small portion of the actual cost of the medical service.
Covered services - a health service which qualifies as a benefit under the terms of the insurance contract.
Deductible - the portion of any medical claim that is not covered by the insurance provider. It is normally quoted as a fixed amount. The deductible must be "met", that is, paid by the insured, before the benefits of the policy can apply.
Direct pay - if your employer does not provide medical insurance and you cannot get it through an association (or as a self-employed individual), you may have to purchase insurance on your own. The rules governing the availability of this coverage are different in each state. Premiums are generally higher, and benefits offered are sometimes less extensive than through a group plan.
Eligible expenses - those medical expenses which are explicitly covered in your contract.
Emergency - please see your policy for your insurance carrier's definition. Most states have adopted this definition:
Symptoms, including pain, of a sufficient severity that a -prudent layperson (possessing an average knowledge of medicine and health) could reasonably expect that absence of immediate medical attention could result in serious jeopardy to his or her health.
This may soon be the national standard. However, some states use this definition:
A condition with acute symptoms that, without immediate medical attention, might seriously impair a person's health, bodily functions, or organs.
Federal Poverty Level (FPL) - the set minimum amount of income that a family needs for food, clothing, transportation, shelter and other necessities. The FPL varies according to family size. The number is adjusted for inflation annually. Public assistance programs, such as Medicaid, define eligibility income limits as a percentage of the FPL.
Group insurance - insurance plans offered to groups of people (usually through an employer, union, professional association or social or civic group.) Group insurance is usually less expensive than individual, direct pay insurance.
Health Maintenance Organization (HMO) - a type of Managed Care Organization (MCO) that provides health insurance coverage through a network of hospitals, doctors, and other providers. Under this model, providers contract with an HMO to receive more patients and in return usually agree to provide services at a lower rate. This arrangement allows the HMO to charge a lower monthly premium.
Health Savings Account (HSA) - a tax-exempt savings account set up to pay for qualified medical expenses for people covered under a high-deductible health plan.
HIPAA (Health Insurance Portability and Accountability Act) - a federal law that regulates access to medical information and provides persons with pre-existing conditions access to health insurance. If you have had 18 months of employment-based health coverage and you have exhausted all your rights to COBRA coverage (or other rights to continue on any other employment-based health plan), then any insurer selling individual coverage in your state must sell you a policy, regardless of your medical condition or vocation.
Indemnity plan - under an indemnity plan, also known as a fee-for-service plan, you can use any medical provider. Under this type of insurance structure, your doctor's bill is sent to the insurance company, which pays part of it. You pay the balance (called co-insurance). You are not restricted to a particular hospital or network of doctors. However, you must pay an annual deductible.
Individual insurance - an insurance plan whose costs are borne solely by the individual, usually costing more than group or pooled insurance.
In-network provider - a healthcare provider, also known as a preferred provider, that has contracted with a managed care organization (MCO) to provide medical services.
Managed care - an effort to control escalating health care costs by the health insurance industry. Under managed care, providers are bound to accept contracted maximum fees if they wish to be listed in directories of specific insurance companies, which are provided to their policy holders as referral directories of "approved" physicians. Managed care is administered primarily by private companies called Managed Care Organizations.
Mandated coverage - medical procedures and services that insurers are required to cover by law. The number and type of mandates vary from state-to-state.
Medicaid - a public health insurance program for individuals and families with low incomes and resources. It is jointly funded by states and the federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Medicaid is the largest source of funding for medical and health-related services for people with limited incomes.
Medicaid Managed Care Organization - oversees the provision of primary care and other medical services to enrollees in Medicaid.
Medicare - a health insurance program administered by the federal government for people age 65 and over, or who meet other special criteria. Medicare is divided into specific areas of coverage: Part A covers hospitalization, Part B covers outpatient and other medical services, and Part D covers medications.
Medigap - private insurance policies specifically designed to provide benefits that help fill in the gaps in Medicare coverage. Unlike private policies, Medigap policies must be clearly identified as Medicare Supplement Insurance.
Open enrollment - A period of time in which eligible subscribers, regardless of age, sex, vocation, family status, or medical condition, must be accepted into a plan that is offered by an employer, association, or government program.
Out-of-network provider - doctors or other medical providers and facilities which either do not work for, or do not contract with, a group health care organization.
Out-of-pocket expense - medical expenses that are not covered by insurance and are paid for directly by the individual.
Out-of-pocket maximum - - the maximum amount of money a person will pay for medical expenses per year. The out-of-pocket maximum includes the co-insurance payments and sometimes the deductible, but does not include premiums or co-payments.
Point-of-Service plan (POS) - this type of policy has characteristics of both HMO and PPO plans. Like an HMO, the individual designates an in-network physician to be their primary care provider. However, like a PPO, a POS plan lets the individual go out-of-network. When the individual goes out-of-network, they will have to pay a portion of the cost, unless the primary care physician refers them to an out-of-network doctor.
Pre-existing condition - any condition for which medical advice, diagnosis or treatment was recommended or received within a designated period of time prior to the coverage date in a new plan. Such conditions may not be covered by the policy, or only after a time lapse.
Please note: Some plans do not have pre-existing exclusion periods.
Preferred Provider Organization (PPO) - a type of group health plan usually organized by an insurance company in which medical professionals in the system agree to accept a standard fee schedule and patient care controls, and the policyholder can go to any medical provider in the network and pay the co-payment amount for each regular service. If the policyholder chooses to get an out-of-network provider, s/he often pays that doctor's fee directly and files for reimbursement from the insurance company. Because this is a greater cost, the PPO system encourages its policyholders to see the doctors and health providers who are part of the system.
Premium - the money paid by an insured person or for a health insurance policy.
Primary Care Physician (PCP) - a physician, often a general practitioner or internist, who is the primary point-of-contact for an individual seeking care or in need of a referral to a specialist.
Private health insurance - insurance purchased by an individual or a group from an insurance company to cover a person's healthcare expenses.
Provider - an appropriately credentialed and licensed provider of health services such as a doctor, nurse, specialist, hospital, health center, home health agency, etc.
Public health insurance systems - where residents are insured by the state if they meet certain criteria such as age, low level of income, or special health condition. Examples are Medicaid, S-CHIP and HIV-related insurance programs.
Referral - most health insurance plans require an individual seeking specialized care to get permission or a referral from their primary care physician. Otherwise, the care provided by the specialist may not be covered by the insurer.
S-CHIP (State Children's Health Insurance Program) - a national program designed for children whose families earn too much money to qualify for Medicaid, yet cannot afford to buy private insurance.
Single-payer health care - a health care system in which a single entity, typically a government-run organization, acts as the administrator (or "payer") to collect all health care fees, and pay out all health care costs.
Specialist - a medical provider with a specific area of expertise such as: surgery, dermatology, neurology or cardiology.
Spouse/partner-benefits - most health insurance plans, particularly those provided by employers, allow for the employee's spouse, partner or children to be covered by the plan as well, although usually at an additional cost to the employee.
Subsidized health insurance - the defraying of the cost of insurance through payments or discounts from the government to individuals or employers.
Subsidy - amount of money provided by the government to off-set some of the cost of health insurance premiums.
Under-insured - an individual with health insurance that is inadequate to meet their healthcare needs.
Uninsured - an individual without health insurance.
Universal health care - a health care system in which all residents of a geographic or political entity have health care coverage, regardless of medical condition or financial status.
Usual, customary and reasonable fees - the maximum amount an insurer will reimburse a provider for a given service or procedure.
Utilization review - an insurer's review of a doctor's treatment plan, including length of hospital stay, to determine necessity, appropriateness and cost efficiency.
Waiting period - the time you may be required to work for an employer before you are eligible for health benefits. Not all employers require waiting periods. Waiting periods do not count as gaps in health insurance for purposes of determining whether coverage is continuous under pre-existing condition rules. If your employer requires a waiting period, your pre-existing condition exclusion period begins on the first day of the waiting period.