Glossary of Health Insurance Terminology

Accountable Care Organization – A group of health care providers who give coordinated care, chronic disease management, and thereby improve the quality-of-care patients get. The organization’s payment is tied to achieving health care quality goals and outcomes that result in cost savings.

Affordable Care Act (ACA) – The comprehensive health care reform law enacted in March 2010 (sometimes known as ACA, PPACA, or “Obamacare”).

Allowable Fee – [Also referred to as ‘Usual & Customary Reimbursement or UCR.] The maximum amount of money that the health insurance provider will agree to pay for a specific medical service or procedure.

Balance Billing
 – When a provider bills you for the difference between the provider’s charge and the allowed amount. 

Benefit Year – A year of benefits coverage under an individual health insurance plan. The benefit year for plans bought inside or outside the Marketplace begins January 1 of each year and ends December 31 of the same year.

Bronze Health Plan – One of 4 plan categories (also known as “metal levels”) in the Health Insurance Marketplace®. Bronze plans usually have the lowest monthly premiums but the highest costs when you get care. They can be a good choice if you usually use few medical services and mostly want protection from very high costs if you get seriously sick or injured.

Carrier – The insurance company or provider offering a health insurance plan.

Catastrophic Health Plan – Health plans that meet all of the requirements applicable to other Qualified Health Plans (QHPs) but don’t cover any benefits other than 3 primary care visits per year before the plan’s deductible is met.

Children’s Health Insurance Program (CHIP) – Inexpensive health coverage for children in families who don’t qualify for Medicaid because their incomes are too high. CHIP also covers pregnant women in certain states. All states provide a version of CHIP, but the name of the program can vary by state.

Claim – A request made by the insured individual to the insurance company to pay for services that were administered by a medical professional.

COBRA – It stands for the Consolidated Omnibus Budget Reconciliation Act of 1985, which is the law that first introduced COBRA insurance. A health insurance program that offers eligible employees and their dependents extended health insurance coverage for the plan they’re on, in the event that they lose their job or their hours are reduced.

Coinsurance – A percentage you’ll pay for covered health services after you’ve met your annual deductible. Many plans offer 80/20 coinsurance, covering 80% of the cost of a service. That means you’ll pay 20%. So if you visit the doctor and it costs $100, you’ll pay $20.

Copayment – A method of shared payment between the insurance company and the insured patient. The patient pays a specific dollar amount toward the cost of a medical service, and the insurance company is obligated to pay the rest of the bill. Different types of medical services can carry different copay amounts.

Cost Sharing – The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. Cost sharing in Medicaid and CHIP also includes premiums.

Cost Sharing Reduction (CSR) – A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Health Insurance Marketplace®, cost-sharing reductions are often called “extra savings.” If you qualify, you must enroll in a plan in the Silver category to get the extra savings.

Data Matching Issue (Inconsistency) – A difference between some information you put on your Marketplace health insurance application and information we have from other trusted data sources.

Deductible – The fixed dollar amount that the insured individual pays before the insurance company begins paying for covered medical services, during the benefit period which is typically one year. Insurance plans may have individual and family deductibles.

Dental Coverage – Benefits that help pay for the cost of visits to a dentist for basic or preventive services, like teeth cleaning, X-rays, and fillings. In the Marketplace, dental coverage is available either as part of a Marketplace health plan, or by itself through a separate dental plan.

Eligible Immigration Status – An immigration status that’s considered eligible for getting health coverage through the Marketplace. The rules for eligible immigration status may be different in each insurance affordability program.

Exchange – Another term for the Health Insurance Marketplace®, a service available in every state that helps individuals, families, and small businesses shop for and enroll in affordable medical insurance.

Exclusive Provider Organization (EPO) Plan – A managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).

Flexible spending account (FSA) – 
An offering from your employer that allows you to pay for out-of-pocket healthcare costs with pre-tax money. Money is set aside from your paycheck and placed into this account before taxes are deducted from your income. You can typically use FSA funds for copayments, deductibles, certain prescription medications, and medical devices.

Formulary – A list of all prescription medications covered under your health insurance plan.

Generic medications –
 Generic drugs have the same active ingredients, quality, and effect as brand-name drugs but are far less expensive. 

Gold Health Plan – One of 4 health plan categories (or “metal levels”) in the Health Insurance Marketplace®. Gold plans usually have higher monthly premiums but lower costs when you get care. Gold may be a good choice if you use a lot of medical services or would rather pay more up front and know that you’ll pay less when you get care.

Grace Period – A short period usually 90 days after your monthly health insurance payment is due. If you haven’t made your payment, you may do so during the grace period and avoid losing your health coverage.

Guaranteed Issue – A requirement that health plans must permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. Except in some states, guaranteed issue doesn’t limit how much you can be charged if you enroll.

Guaranteed Renewal – A requirement that your health insurance issuer must offer to renew your policy as long as you continue to pay premiums. Except in some states, guaranteed renewal doesn’t limit how much you can be charged if you renew your coverage.

Health Coverage – Legal entitlement to payment or reimbursement for your health care costs, generally under a contract with a health insurance company, a group health plan offered in connection with employment, or a government program like Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).

Health Insurance – A contract that requires your health insurer to pay some or all of your health care costs in exchange for a premium.

HMO – Health Maintenance Organization – A managed health care system that provides comprehensive medical services and responsibility for the delivery of such services in exchange for a fixed, pre-paid fee. An HMO covers care administered by medical professionals who are in their ‘network’, meaning that they have agreed to treat patients in a manner consistent with the HMO’s guidelines.

HSA – Health Savings Account – A savings account that permits policy holders to use pre-tax money on covered medical expenses. Health Savings Accounts are coupled with High Deductible Insurance Plans for which contributions can be made by an employer or an employee.

Indemnity Plan – A medical plan that reimburses the health care provider or patient as costs are incurred.

Individual Health Insurance – A health insurance plan that applies to an individual person, not a group or employee sponsored plan. Individual health plans typically carry a higher premium.

In-network – Referring to care or providers who are part of your insurance plan’s contracted network.

Inpatient care – Care that requires a hospital stay and continuous supervision by a healthcare provider. This could be for care after a minor surgery or for a serious ongoing health condition.

Medicaid – A state/federal government program that provides health care assistance to those who are unable to pay for medical expenses.

Medicare – A federal program providing health care benefits to eligible individuals, typically those over the age of 65 and the disabled. The program is paid for using payroll taxes from employers and employees. Medicare consists of Part A and Part B: Part A is funded by the government and covers hospitalization, while Part B, Supplemental Medical Insurance, covers basic medical costs and is paid for by the government and the insured.

Network – A group of physicians and hospitals that provide health care services to members of a particular health insurance company’s plan. The network provides services to these customers at lower rates than usual.

Non-preferred provider – A provider who doesn’t have a contract with your health insurer or plan to provide services to you. You’ll pay more to see a non-preferred provider. Check your policy to see if you can go to all providers who have contracted with your health insurance or plan, or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers.

Open enrollment
 – The period of time each year when you can enroll in a new health insurance plan. 

Out-of-pocket costs – The healthcare expenses that aren’t paid for by your insurance and you are responsible for paying. Out-of-pocket costs include deductibles, coinsurance, and copays.

Outpatient care – Care that does not require an overnight stay in the hospital.

Platinum Health Plan – One of 4 categories (or “metal levels”) of Health Insurance Marketplace® plans. Platinum plans usually have the highest monthly premiums of any plan category but pay the most when you get medical care. They may work well if you expect to use a great deal of health care and would rather pay a higher premium and know nearly all other costs are covered.

POS – Point-of-Service Plan – A Point of Service, or POS, plan is a composite of HMO and PPO plans. Insured individuals are required to select a primary care physician within the network. While a patient may opt to see a physician outside of the network, he or she will be required to pay the majority, or entirety, of the bill. On the other hand, should your primary care physician refer you to a provider outside of the network, the insurer will pay most or all of the bill.

Pre-Existing Conditions – A medical condition that is not covered by an insurance plan because it was perceived to be present in the individual before the purchase of the health insurance policy.

PPO – Preferred Provider Organization – [Also referred to as a Participating Provider Organization or Preferred Provider Option]. This is a managed care system consisting of physicians, hospitals and other health care professionals who administer medical services through an insurance provider or third party to provide services at reduced rates. With a PPO, the insured individuals pay as they go for medical services, rather than a fixed, pre-paid fee. With a PPO plan, individuals receive reduced costs for medical services received in the network, but have the option to pay more if they choose to see a medical professional who is out of the PPO network.

Silver Health Plan
 – One of 4 categories of Health Insurance Marketplace® plans (sometimes called “metal levels”). Silver plans fall about in the middle: You pay moderate monthly premiums and moderate costs when you need care. Important: If you qualify for “cost sharing reductions” (or “extra savings”) you can save a lot of money on deductibles, copayments, and coinsurance when you get care — but only if you pick a Silver plan.

Special Enrollment Period (SEP) – A time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for a Special Enrollment Period if you’ve had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child, or if your household income is below a certain amount.

Subsidized Coverage – Health coverage available at reduced or no cost for people with incomes below certain levels.

Urgent Care
 – Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe it requires emergency room care.

Vision Coverage
 – A health benefit that at least partially covers vision care, like eye exams and glasses. All plans in the Health Insurance Marketplace® include vision coverage for children. Only some plans include vision coverage for adults.

Zero Cost Sharing Plan
 – A plan available to members of federally recognized tribes and Alaska Native Claims Settlement Act (ANCSA) Corporation shareholders whose income is between 100% and 300% of the federal poverty level and qualify for premium tax credits

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