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.
Admitting Privileges: The right granted to a doctor to admit
patients to a particular hospital.
Advocacy: Any activity done to help a person or group to
get something the person or group needs or wants.
Agent: Licensed salespersons who represent one or more health
insurance companies and presents their products to consumers.
Association: A group. Often, associations can offer individual
health insurance plans specially designed for their members.
B
Benefit: Amount payable by the insurance company to a claimant,
assignee, or beneficiary when the insured suffers a loss.
Brand-name drug: Prescription drugs marketed with a specific
brand name by the company that manufactures it, usually the company which
develops and patents it. When patents run out, generic versions of many popular
drugs are marketed at lower cost by other companies. Check your insurance
plan to see if coverage differs between name-brand and their generic twins.
Broker: Licensed insurance salesperson who obtains quotes
and plan from multiple sources information for clients.
C
Capitation: Capitation represents a set dollar limit that
you or your employer pay to a health maintenance organization (HMO), regardless
of how much you use (or don't use) the services offered by the health maintenance
providers. (Providers is a term used for health professionals who provide
care. Usually providers refer to doctors or hospitals. Sometimes the term
also refers to nurse practitioners, chiropractors and other health professionals
who offer specialized services.)
Carrier: The insurance company or HMO offering a health plan.
Case Management: Case management is a system embraced by
employers and insurance companies to ensure that individuals receive appropriate,
reasonable health care services.
Certificate of Insurance: The printed description of the
benefits and coverage provisions forming the contract between the carrier
and the customer. Discloses what it covered, what is not, and dollar limits.
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.
COBRA: Federal legislation that lets you, if you work for
an insured employer group of 20 or more employees, continue to purchase health
insurance for up to 18 months if you lose your job or your coverage is otherwise
terminated. For more information, visit the Department of Labor.
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 HMOs require a $10 "co-payment" for each office visit,
regardless of the type or level of services provided during the visit. Co-payments
are not usually specified by percentages.
Credit for Prior Coverage: This is something that may or
may not apply when you switch employers or insurance plans. A pre-existing
condition waiting period met under while you were under an employer's (qualifying)
coverage can be honored by your new plan, if any interruption in the coverage
between the two plans meets state guidelines.
D
Deductible: The amount an individual must pay for health
care expenses before insurance (or a self-insured company) covers the costs.
Often, insurance plans are based on yearly deductible amounts.
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: Spouse and/or unmarried children (whether natural,
adopted or step) of an insured.
Dependent Worker: A worker in a family in which someone else
has greater personal income.
E
Effective Date: The date your insurance is to actually begin.
You are not covered until the policies effective date.
Employee Assistance Programs (EAPs): Mental health counseling
services that are sometimes offered by insurance companies or employers. Typically,
individuals or employers do not have to directly pay for services provided
through an employee assistance program.
Exclusions: Medical services that are not covered by an individual's
insurance policy.
Explanation of Benefits: The insurance company's written
explanation to a claim, showing what they paid and what the client must pay.
Sometimes accompanied by a benefits check.
G
Generic Drug: A "twin" to a "brand name drug"
once the brand name company's patent has run out and other drug companies
are allowed to sell a duplicate of the original. Generic drugs are cheaper,
and most prescription and health plans reward clients for choosing generics.
Group Insurance: Coverage through an employer or other entity
that covers all individuals in the group.
H
Health Care Decision Counseling: Services, sometimes provided
by insurance companies or employers, that help individuals weigh the benefits,
risks and costs of medical tests and treatments. Unlike case management, health
care decision counseling is non-judgmental. The goal of health care decision
counseling is to help individuals make more informed choices about their health
and medical care needs, and to help them make decisions that are right for
the individual's unique set of circumstances.
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,
Services are provided by physicians who are employed by, or under contract
with, the HMO. HMOs vary in design. Depending on the type of the HMO, services
may be provided in a central facility, or in a physician's own office (as
with IPAs.)
HIPAA: A Federal law passed in 1996 that allows persons to
qualify immediately for comparable health insurance coverage when they change
their employment or relationships. It also creates the authority to mandate
the use of standards for the electronic exchange of health care data; to specify
what medical and administrative code sets should be used within those standards;
to require the use of national identification systems for health care patients,
providers, payers (or plans), and employers (or sponsors); and to specify
the types of measures required to protect the security and privacy of personally
identifiable health care. Full name is "The Health Insurance Portability
and Accountability Act of 1996."
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. With indemnity
plans, the individual pays a pre-determined percentage of the cost of health
care services, and the insurance company (or self-insured employer) pays the
other percentage. For example, an individual might pay 20 percent for services
and the insurance company pays 80 percent. The fees for services are defined
by the providers and vary from physician to physician. Indemnity health plans
offer individuals the freedom to choose their health care professionals.
Independent Practice Associations: IPAs are similar to HMOs,
except that individuals receive care in a physician's own office, rather than
in an HMO facility.
Individual Health Insurance: Health insurance coverage on an individual,
not group, basis. The premium is usually higher for individual health insurance
than for a group policy, but you may not qualify for a group plan.
In-network: Providers or health care facilities which are part of
a health plan's network of providers with which it has negoiated a discount.
Insured individuals usually pay less when using an 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: a limit on the amount of benefits paid out for
a particular covered expense, as disclosed on the Certificate of Insurance.
Long-Term Care Policy: Insurance policies that cover specified
services for a specified period of time. Long-term care policies (and their
prices) vary significantly. Covered services often include nursing care, home
health care services, and custodial care.
Long-term Disability Insurance: Pays an insured a percentage of their
monthly earnings if they become disabled.
LOS: LOS refers to the length of stay. It is a term used
by insurance companies, case managers and/or employers to describe the amount
of time an individual stays in a hospital or in-patient facility.
M
Managed Care: A medical delivery system that attempts to
manage the quality and cost of medical services that individuals receive.
Most managed care systems offer HMOs and PPOs that individuals are encouraged
to use for their health care services. Some managed care plans attempt to
improve health quality, by emphasizing prevention of disease.
Maximum Dollar Limit: The maximum amount of money that an insurance
company (or self-insured company) will pay for claims within a specific time
period. Maximum dollar limits vary greatly. They may be based on or specified
in terms of types of illnesses or types of services. Sometimes they are specified
in terms of lifetime, sometimes for a year.
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 are designed to pay for some of the costs
that Medicare does not cover.
Multiple Employer Trust (MET): A trust consisting of multiple
small employers in the same industry, formed for the purpose of purchasing
group health insurance or establishing a self-funded plan at a lower cost
than would be available to each of the employers individually.
N
Network: A group of doctors, hospitals and other health care
providers contracted to provide services to insurance companies 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 a network provider.
O
Open-ended HMOs: HMOs which allow enrolled individuals to
use out-of-plan providers and still receive partial or full coverage and payment
for the professional's services under a traditional indemnity plan.
Out-of-Plan (Out-of-Network): This phrase usually refers
to physicians, hospitals or other health care providers who are considered
nonparticipants 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 only in
part by an individual's insurance company.
Out-Of-Pocket Maximum: A predetermined limited amount of money that
an individual must pay out of their own savings, before an insurance company
or (self-insured employer) will pay 100 percent for an individual's health
care expenses.
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 surgery) that will
not be covered (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
Plan Administration: Supervising the details and routine
activities of installing and running a health plan, such as answering questions,
enrolling individuals, billing and collecting premiums, and similar duties.
Pre-Admission Certification: Also called pre-certification
review, or pre-admission review. Approval by a case manager or insurance company
representative (usually a nurse) for a person to be admitted to a hospital
or in-patient facility, granted prior to the admittance. Pre-admission certification
often must be obtained by the individual. Sometimes, however, physicians will
contact the appropriate individual. The goal of pre-admission certification
is to ensure that individuals are not exposed to inappropriate health care
services (services that are medically unnecessary).
Pre-Admission Review: A review of an individual's health
care status or condition, prior to an individual being admitted to an inpatient
health care facility, such as a hospital. Pre-admission reviews are often
conducted by case managers or insurance company representatives (usually nurses)
in cooperation with the individual, his or her physician or health care provider,
and hospitals.
Preadmission 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 excluded
from coverage by an insurance company, because the condition was believed
to exist prior to the individual obtaining a policy from the particular insurance
company.
Preferred Provider Organizations (PPOs): You or your employer
receive discounted rates if you use doctors from a pre-selected group. If
you use a physician outside the PPO plan, you must 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 a "quarterback" for an individual's
medical care, referring the individual to more specialized physicians for
specialist care.
Provider: Provider is a term used for health professionals
who provide health care services. Sometimes, the term refers only to physicians.
Often, however, the term also refers to other health care professionals such
as hospitals, nurse practitioners, chiropractors, physical therapists, and
others offering specialized health care services.
R
Reasonable and Customary Fees: The average fee charged by
a particular type of health care practitioner within a geographic area. The
term is often used by medical plans as the amount of money they will approve
for a specific test or procedure. If the fees are higher than the approved
amount, the individual receiving the service is responsible for paying the
difference. Sometimes, however, if an individual questions his or her physician
about the fee, the provider will reduce the charge to the amount that the
insurance company has defined as reasonable and customary.
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 his or her risk of getting cancer if he or she chooses
to smoke cigarettes.
S
Second Opinion: It is 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.
Second Surgical Opinion: These are now standard benefits
in many health insurance plans. It is an opinion provided by a second physician,
when one physician recommends surgery to an individual.
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 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 30 days to six months.
Small Employer Group: Generally means groups with 1 99 employees.
The definition may vary between states.
State Mandated Benefits: When a state passes laws requiring that health insurance
plans include specific benefits.
Stop-loss: The dollar amount of claims filed for eligible
expenses at which which point you've paid 100 percent of your out-of-pocket
and the insurance begins to pay at 100%. Stop-loss is reached when an insured
individual has paid the deductible and reached the out-of-pocket maximum amount
of co-insurance.
T
Triple-Option: Insurance plans that offer three options from which
an individual may choose. Usually, the three options are: traditional indemnity,
an HMO, and a PPO.
U
Underwriter: The company that assumes responsibility for
the risk, issues insurance policies and receives premiums.
Usual, Customary and Reasonable (UCR) or Covered Expenses:
An amount customarily charged for or covered for similar services and supplies
which are medically necessary, recommended by a doctor, or required for treatment.
W
Waiting Period: A period of time when you are not covered
by insurance for a particular problem.
Copyright 1994-2007, The Health Insurance Resource Center
provides free resources on low cost health insurance, individual health insurance
and health insurance quotes but is not an insurance company or agent.
Last updated Saturday, January 20, 2007
