A

Actuary: A mathematician working for a health insurance company responsible for determining what premiums the company needs to charge based in large part on claims paid verses amounts of premium generated. Their job is to make sure a block of business is priced to be profitable.
Additional Insured: Refers to anyone covered under your health plan that is not named as “insured” in your documentation.
Admitting Privileges: The right, granted by a particular hospital to a particular doctor, to admit patients to that hospital.
Agent: Licensed sales professionals that represent one or more health insurance companies and presents their products to consumers.
Annual Maximum Benefit (or Maximum Annual Benefit): The maximum amount a health plan will pay in benefits to an insured individual during that calendar year.
Association: A group. Often, associations can offer individual health insurance plans specially designed for their members.

B

Benefit: The amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.
Benefit Period: The time interval during which you will be eligible for benefits. Generally, your benefit period will begin with the first medical service you receive for a specific illness and end after you have not been treated for that condition for 60 days.
Brand-Name Drug: A prescription drug marketed with a specific brand name by the company that manufactures it (usually the company which develops and patents it.) When the patent(s) for a brand-name drug expire, a “generic” version will likely be produced and marketed at lower cost by other companies.

C

Carrier: The insurance company or HMO offering a health plan.
Certificate of Insurance: The printed description of the benefits and coverage provisions forming the contract between the carrier and the customer. The Certificate of Insurance discloses what it covered, what is not covered, and what the dollar limits of coverage are.
Claim: A request by an individual (or his or her provider) to an individual's insurance company for the insurance company to pay for services obtained from a health care professional, or institution.
COBRA: This acronym refers to 1985’s Consolidated Omnibus Budget Reconciliation Act. This law requires employers with more than 20 employees to allow employees that leave the company to continue their insurance in the company plan for 18 to 36 months. Under COBRA, the employee is required to reimburse the employer for the cost of the insurance plus up to a 2 percent administrative fee.
Co-Insurance: Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called "co-payment." Co-insurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.
Co-Payment: Co-payment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some plans require a $20 "co-payment" for each visit to a doctor’s office, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.
Covered Expenses: Refers to those medical procedures that your insurer has agreed to provide you with coverage for.

D

Deductible: The amount an individual must pay for health care expenses before the insurance begins to cover the costs.
Denial of Claim: Refusal by an insurance company to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.
Dependents: The spouse and/or unmarried children (natural, adopted and/or step) of an insured.
Disability Insurance: Pays an insured a fixed monthly benefit if they become disabled, usually after a specified waiting or “exclusion” period.

E

Effective Date: The date your insurance coverage actually begins. You are not covered until the policy’s effective date.
Exclusions: Medical services that are not covered by an individual's insurance policy.
Explanation of Benefits: The insurance company's written explanation of a claim, usually showing a.) What the provider charged, b.) What the carrier paid and c.)  What the client must pay.

F

Fee-for-Service: This is a healthcare payment system whereby the provider is paid for each service as it is rendered.

G

Generic Drug: An equivalent to a "brand name drug" which other drug companies are allowed to sell once the brand name drug’s  patent(s) expire. Generic drugs are generally less expensive, and most prescription and health plans reward clients for choosing generics.
Group Insurance: Coverage through an employer or other entity that covers all individuals within the group.

H

Health Maintenance Organizations (HMOs): Health Maintenance Organizations represent "pre-paid" or "capitated" insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided, and services are typically provided by physicians who are employed by (or under contract with) the HMO.
HIPAA: HIPPA refers to "The Health Insurance Portability and Accountability Act of 1996," a Federal law passed in 1996 that allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships. HIPAA also creates the authority a.) Mandating the use of standards for the electronic exchange of health care data; b.) Specifying what medical and administrative code sets should be used within those standards; c.) Requiring the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and d.) Specifying the types of measures required to protect the security and privacy of personally identifiable health care.
Hospice Care: Regular health services that are provided to a terminally ill patient.

I

Indemnity Health Plan: Indemnity health insurance plans are also called "fee-for-service." These are the types of plans that primarily existed before the rise of HMOs, IPAs, and PPOs. In an indemnity plan, the individual pays a pre-determined percentage of the cost of their health care services, and the insurance company pays the other percentage. For example, an individual might pay twenty (20%) percent for services and the insurance company pays the remaining eighty (80%) percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans typically offer individuals the freedom to choose their health care professionals.
Individual Health Insurance:Health insurance coverage offered and sold on an individual -- rather than a group -- basis.
In-network: Refers to care delivered by the “network” of providers or health care facilities which have pre-negotiated a discount with a given health insurance plan.  Insured individuals usually pay less when using their plan’s “in-network” provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.

L  

Lifetime Maximum Benefit (or Maximum Lifetime Benefit): The maximum amount a health plan will pay in benefits to an insured individual during that individual's lifetime.
Limitations: Refers to limits on the amount of benefits paid out for particular covered expenses, as disclosed on the Certificate of Insurance.
LOS: LOS is an acronym for “length of stay.” It is a term used by insurance companies, case managers, providers and/or employers to describe the amount of time an individual stays in a hospital or in-patient facility.

M

Medicaid: This is a joint state/federal health insurance program that is administered by the state. It provides health coverage for low-income individuals, especially pregnant women, children and the disabled.
Medicare: This is a federally sponsored healthcare program that offers coverage for medical and hospital care primarily to those over the age of sixty-five (65.)
Medigap Insurance Policies: Medigap insurance is offered by private insurance companies, not the government. It is not the same as Medicare or Medicaid. These policies, sometimes referred to as “supplemental insurance,” are designed to pay for some of the costs that Medicare does not cover.

N

Network: A group of doctors, hospitals and other health care providers contracted to provide services to a health insurance company’s customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using their plan’s provider network.

O

Out-of-Plan (Out-of-Network): This phrase usually refers to care delivered by physicians, hospitals or other health care providers who are considered non-participants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered at a lower rate by an individual's insurance company.
Out-Of-Pocket Maximum: A predetermined limit to the amount of health care expense an individual must pay for before their insurance company will pay 100 percent for their remaining health care expenses.  These amount can vary greatly from one plan to another.
Outpatient: An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgeries) that will not be covered (i.e., paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with “ambulatory” to describe health care facilities where procedures are performed.

P

Point-of-Service Plan (“POS”): A POS is a managed healthcare plan that combines the features of a Health Maintenance Organization and a Preferred Provider Organization. These plans allow you to decide whether or not you’ll use an in-network provider or an out-of-network provider.
Pre-admission Certification: Also sometimes called a “pre-certification review” or “pre-admission review.” Under plans with this provision, the approval by a case manager or insurance company representative is required for a person to be admitted to a hospital or in-patient facility, and must be granted prior to the patient’s admittance. Pre-admission certification often must be obtained by the individual. Sometimes, however, physicians will contact the appropriate individual. The purpose of pre-admission certification is to ensure that individuals are not exposed to inappropriate or unnecessary health care services.
Pre-admission Testing: Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility.
Pre-existing Conditions: A medical condition that is specifically excluded from coverage by an insurance company, because the condition was either identified or believed to exist prior to the individual obtaining their policy from the insurance company.
Preferred Provider Organization (“PPO”): A plan under which you or your employer receives discounted rates if you use doctors from a pre-selected group. If you use a physician outside the PPO plan, you will typically pay more for the medical care.
Primary Care Provider (“PCP”): A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs. Typically, a PCP serves as the manager for an individual's overall health/medical care, referring the individual to more specialized physicians for specialist care as needed.
Provider: “Provider” is a term used for health professionals who provide health care services. In some plans the term refers only to physicians, while in others it can also refer to other health care professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.

R

Rider: A modification made to a Certificate of Insurance regarding the clauses and provisions of a policy (usually adding or excluding coverage).
Risk: The chance of loss, the degree of probability of loss or the amount of possible loss to the insuring company. For an individual, risk represents such probabilities as the likelihood of surgical complications, medications' side effects, exposure to infection, or the chance of suffering a medical problem because of a lifestyle or other choice. For example, an individual increases their risk of becoming diabetic if they are significantly overweight/obese.

Reasonable and Customary Charges: A term included in many medical plans as the amount of money they will approve for a specific test or procedure. The amount is determined by the plan, and is intended to reflect an amount customarily charged for or covered for similar services and supplies which are medically necessary, recommended by a doctor, or required for treatment.  Under plans with this provision, if the fees are higher than the amount approved by the plan, the individual receiving the service may be responsible for paying the difference, even if they have already met their plan’s deductible or co-payment requirements. Some providers will, however, reduce their charge to the amount that the insurance company has defined as reasonable and customary if an individual questions his or her physician about the fee.

S

Second Opinion: Refers to a medical opinion provided by a second physician or medical expert, when one physician provides a diagnosis or recommends surgery to an individual. Individuals are encouraged to obtain second opinions whenever a physician recommends surgery or presents an individual with a serious medical diagnosis.
Short-Term Disability: An injury or illness that keeps a person from working for a short time. The definition of short-term disability (and the time period over which coverage extends) differs among insurance companies and employers.
Short-Term Disability Insurance: Short-term disability insurance coverage is designed to protect an individual's full or partial wages during a time of injury or illness (that is not work-related) that would prohibit the individual from working.
Short-Term Medical: Temporary coverage for an individual for a short period of time, usually from thirty (30) days to six (6) months.
State-Licensed Health Plan: Those plans which have met the State requirements for licensing.  Not all plans marketed in a state are state-licensed, and consumers should beware of enrolling in plans which have not been licensed in their state.
State Mandated Benefits: Those specific medical care benefits required by state law for state-licensed health plans. 

U

Underwriter: The Company that assumes the responsibility for the risk, issues the insurance policy, and receives the premiums.
Usual and Customary Charges: Usual and customary charges refer to the ordinary or prevailing charge made for a specific medical expense within a geographic area.  See “Reasonable and Customary Charges” for a key difference.

W

Waiting Period: A specified period of time during which health care is not covered by the plan for a particular medical condition.

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