| Glossary
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.
Board
Certified
This term describes 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.
Capitation
A payment method
in which a health plan pays a hospital or physician a fixed
amount per patient, regardless of the amount or types of services
the patient requires.
COBRA
The Consolidated Omnibus Budget Reconciliation (COBRA) Act of
1986 is a federal program that ensures continuity of medical
insurance coverage when an individual terminates a job or
shortens his/her work hours. See our COBRA section for information.
Co-Insurance
The percentage you pay for eligible expensesafter you satisfy
the deductible, if any.
There is usually a maximum amount of Co-Insurance that is
incurred each year before the plan kicks in at 100% for the rest
of the year. Co-Insurance applies to Indemnity plans, Out-of-Network
Point-of-Service (POS), and Preferred
Provider Organization (PPO) plans.
A method for establishing the price for health insurance
premiums. The insurance company
sets one rate for each plan for all covered people in the same
geographic area, regardless of age, sex, vocation, health
condition, etc.
Continuous
Coverage
Health insurance coverage that is not interrupted by a break
of 63 or more consecutive days. Employer waiting periods and HMO affiliation
periods do not count as gaps in health insurance
coverage for the purpose of determining if coverage is
continuous. See definition of Pre-Existing
Conditions.
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. Find
this section in your contract.
Co-Payment
The flat amount you pay for eligible expenses, such as
office visits and exams. This is usually $5, $10 or $15 for most
providers, but can be up to $700 for in-patient care. Used in
Preferred Provider
Organizations (PPOs), Health Maintenance
Organizations (HMOs) and Prescription Plans. In some
plans, the Co-Payment can be a percentage of the fee, as
determined by the insurer, instead of a flat amount.
Deductible
The sum of money that an individual must pay out-of-pocket for
medical expenses before a health plan reimburses a percentage of
additional covered medical expenses.
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.
Please Note: There is one national rule. 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.
Eligible
Expense
Only those medical expenses which are explicitly
covered in your contract.
Emergency
There are a few definitions for emergency, see your
contract.
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.
Fee-for-Service
Health insurance plans which reimburse physicians and
hospitals for each individual service they provide. These plans
allow consumers to choose any physician or hospital.
Gatekeeper
A Primary
Care Physician (PCP) who is responsible for overseeing
and coordinating aspects of a patient's medical care that is
subject to insurer rules. In order for a patient to receive a
specialty care referral or
hospital admission, the gatekeeper or insurer must pre-authorize
the visit, unless there is an emergency in which case pre-authorization
can be obtained after the fact.
Health Maintenance
Organization (HMO)
An organization
that provides a wide range of comprehensive health care services
through a designated group, or network of doctors, hospitals,
labs and other providers. When you join an HMO, you select a
Primary Care
Physician (PCP) from its staff or from a list of PCPs.
Your Primary Care Physician is responsible for coordinating all
of your medical care. Referrals to
specialists and hospital admissions are arranged by your Primary
Care Physician or the HMO
company.
There are two basic types of HMOs – Staff Model HMOs and
Network HMOs. A HMO can be a mixture of the two types. In the
staff model HMO, a group of physicians is employed directly by
the HMO and practice from a facility that is provided by the HMO.
In other HMOs, an independent network of physicians is recruited
and contracted by the HMO and practice from health facilities not
provided by the HMO.
Indemnity
Plan
Under the Indemnity Plan, you can use any medical provider
(such as a doctor and hospital). Before your insurance company
begins to pay for your expenses, you must meet your deductible. After you meet your
deductible, you may be responsible for 20 to 50% of each medical
expense, which is co-insurance. The insurance company
will pay each remaining balance. See Usual,
Customary and Reasonable Fees.
In-network or
In-plan
The list of providers (such as doctors and hospitals) which
have contracted with Health Maintenance
Organizations (HMOs) and Preferred Provider
Organizations (PPOs). HMOs and PPOs usually have
lists (panels) of providers to choose from. You pay the required
Co-Payment, if any, to
use these providers.
Please Note: If you receive care from a provider who is
not listed in the network (a non-network provider) you may have
to pay the provider yourself. If you have a POS or PPO
plan you would be able to access such non-network providers by
paying a deductible
and co-insurance.
Managed Care
A method of health care delivery that attempts to manage or
coordinate health care utilization, access and costs by closely
monitoring how physicians and other medical providers treat
patients.
Medicaid
This is a state and federal sponsored health benefits program
for low-income individuals. The program is offered in all states,
but differs from state to state. Check your state’s
Medicaid description for more information.
Medicare
This is a federally sponsored health benefits program for the
elderly and permanently disabled. The program is offered in all
states, and is fairly consistent from state to state. Check our
Medicare
section for more details.
Medigap
(Medicare Supplement) Policy
Medigap plans are private insurance policies specifically
designed to provide benefits that help fill in the gaps in your
Medicare coverage. Unlike other
private policies, Medigap policies must be clearly identified as
Medicare Supplement Insurance. See our Medicare Supplement
section for more information.
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
Benefits
Services received from providers not in your Health
Maintenance Organization (HMO), Preferred
Provider Organization (PPO) or Drug Plan network or
panel. PPO and Point-of-Service (POS)
plans cover out -of- network services, but with deductibles and co-insurance.
Out-of-pocket
maximum
The maximum amount of money a person will pay in addition to
premium payments and co-payments where applicable.
Theout-of-pocket
maximum includes the co-insurance payments and sometimes
thedeductible.
Participating
Physician or Participating Provider
The provider is listed in the network of the HMO,
POS or PPO
plan.
Point-of-Service
(POS)
The Point-of-Service plan allows members to use the HMO
network or a provider, which is not on the network, by paying a
deductible and co-insurance. Note that non-network
providers are subject to the same managed care requirements as
network providers.
Pre-authorization /
Pre-certification
Authorization from the insurer or Primary Care
Physician to enter a hospital, have surgery, obtain
tests, or follow a course of treatment. Without
pre-certification, the insurer will pay only a fraction or none
of the cost. This term applies to most services provided by
Managed Indemnity, Health
Maintenance Organizations (HMOs), Point-of-Service (POS)
and Preferred
Provider Organizations (PPOs). Almost all plans require
pre-certification for some services, like hospital
admissions.
Pre-existing
condition
Any condition for which medical advice, diagnosis or treatment
was recommended or received within six months prior to the
coverage date in a new plan. That condition will not be covered
by the new plan, until you have been in that plan for the
required number of months. This is called the pre-existing
condition exclusion period. Please note, some plans do not have
pre-existing exclusion periods.
Preferred Provider
Organization (PPO)
A Preferred Provider Organization (PPO) plan is similar to a
Point-of-Service
(POS) plan in offering coverage by a network of
providers, as well as coverage for out-of-network
services. In a PPO plan, you can go to a network specialist for
the co-pay of $5, $10 or $15, without obtaining a
referral from a
Primary
Care Physician (PCP). You are not required to choose
a PCP in a PPO plan. Pre-certification
requirements will still be maintained.
Premium
Amount of money paid to insurer for insurance coverage.
Primary Care Physician
(PCP)
You select a
doctor to manage and coordinate virtually all of the health care
services you receive. Your Primary Care
Physician provides you with routine medical care and
represents your case to the insurer to get authorization for
treatments that require pre-certification.
See also Gatekeeper.
Please Note: In HMOs, you must get a referral from your PCP to see a
network specialist. A main difference between an HMO
and a PPO
is that in a PPO you do not need to name a PCP, and you
can self-refer to any specialist in the network.
Referral
A recommendation from a provider that a patient should receive
care from another specific physician or facility. Health plans
may require that designated Primary Care
Providers authorize a referral for coverage of specialty
services.
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.
Viatical
Settlement
A viatical
settlement assists terminally ill people by giving them cash in
exchange for a group or individual life insurance policy. The
insured sells his or her policy at a percentage of its face
value.
The cash advance can be used:
- To continue the insured’s health care at the highest
quality
- To retain the insured’s independence and dignity by
being financially able to select and pay for choices
available
- To maintain one’s standard of living or preserve a home
during serious illness
- To retire a debt
- To take a memorable trip or fulfill life wishes
Please Note: Some states regulate viatical settlement
companies. Your state insurance department can tell you which
companies are licensed in your state. Beware, there are complex
rules applicable to the tax treatment of viatical settlements.
The receipt of a viatical settlement may jeopardize your
entitlement to public benefits. GET CAREFUL ADVICE BEFORE SELLING
YOUR INSURANCE.
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.
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