Health Insurance Terms A-Z
Health insurance can be a confusing topic, so knowing the common health insurance terms can go along way to helping you better understand your policy. Here is an A-Z list of commonly used health insurance terms and definitions.
A
Actuary: A mathematician specializing in risk who works for the health insurance company to help determine the premium the insurance company should charge.
Agent: A person who is licensed on a statewide basis to sell health insurance to consumers.
B
Benefit: The amount that the insurance company is responsible to pay when the insured party suffers a loss.
Brand Name Drug: A prescription drug with a brand name that is patented usually by the manufacturer. When the patent expires, generic drugs will most likely become available.
Broker: An insurance salesperson who is licensed to sell insurance and presents various insurance products to consumers.
C
Carrier: The health insurance company.
Certificate of Insurance: Printed document specifically covering the contract between the insurance company and the consumer and details coverage provisions.
Claim: The request made by the insured or the insured’s health care provider for payment from the insurance company for services performed.
Co-insurance: Also known as a co-payment in some health insurance plans, it is the amount that the insured is required to pay for a health care service once a deductible has been paid usually represented by a percentage.
Co-payment: A flat fee that has been predetermined which must be paid by the insured for health care services.
COBRA (Consolidated Omnibus Budget Reconciliation Act): Legislation that allows you to purchase health insurance for an 18 month period after losing your job or if your health insurance coverage was terminated for another reason.
D
Deductible: The amount that must be paid by the insured before their health insurance coverage will cover costs.
Denial of Claim: Refusal by the insurance company to pay a claim made by the insured or the insured’s provider.
Dependents: Persons who are the legal responsibility of the insured, spouses, and unmarried children.
E
Effective Date: The date that your health insurance policy goes into effect. This is the day that you health insurance coverage will begin.
Exclusions: Medical services that are not covered under your health insurance policy.
Explanation of Benefits: A statement from the insurance company which will show what was paid by the insurer and what the insured is responsible for paying.
G
Generic Drug: Cheaper than a brand name drug, this is a duplicate of a brand name drug whose patent has expired and is now able to be reproduced by other companies.
Group Health Insurance: Health insurance coverage that is obtained through an employer or another group that offers health insurance coverage to all of its members.
H
HMO (Health Maintenance Organization): An HMO is a type of pre paid health insurance plan where an individual pays a fixed monthly service fee. The fee remains constant; however you will be limited to your choice of physicians as they must be chosen from the HMO network.
HIPAA (Health Insurance Portability and Accountability Act): Passed in 1996, this Federal law allows an individual to immediately obtain health insurance coverage when they change employment or a relationship affecting their health insurance coverage.
I
In- Network: Health insurance providers or facilities that belong to a health insurance plan network with which they have negotiated discounts.
Indemnity Health Plan: Also known as a fee for service plan. With an indemnity plan, the insured person pays a specified predetermined amount of the health care costs, usually a percentage, and the insurer covers the remaining expense.
Individual Health Insurance: Health insurance coverage that is obtained on a individual basis, as opposed to group health insurance.
L
Lifetime Maximum Benefit: The maximum amount of benefits that an insurance company will pay during an insured’s lifetime.
Limitations: The limit on the benefit amounts that will be paid, as defined in the policy.
LOS: This stands for length of stay and is used to describe the amount of time the insured will spend in a hospital or other medical facility.
M
Managed Care: A health care system that attempts to manage the cost of medical services and the quality of service that their customers receive.
Maximum Dollar Limit: The maximum amount that the insurer will pay for claims within a certain period of time.
N
Network: Doctors, hospitals and other health care providers that are under a contract with an insurance company to provide services at a discount.
O
Out Of Plan: Sometimes referred to as Out of Network, this term is usually describing doctors or hospitals that are not part of an insurance plans network.
Outpatient: An individual who receives treatment but does not stay overnight in a hospital or medical facility.
P
Pre-Admission Certificate: Approval by an insurance company for an individual to be admitted into a medical facility,
Pre-Admission Review: A review of a person’s health condition before they are admitted into a medical facility for treatment, which is often conducted by the insurance company with the help of a physician.
Pre-Existing Condition: A medical condition of an individual that is in existence prior to that individual obtaining their health insurance policy and is therefore excluded from coverage.
Preferred Provider Organization (PPO): A type of health insurance plan in which you use a doctor or hospital from the PPO network to receive a discounted rate.
PCP (Personal Care Provider): A physician that is responsible for monitoring a person’s healthcare needs overall.
Provider: This term is generally used to describe physicians or other professionals providing health care services.
R
Rider: A modification made to a policy which usually adds coverage.
Risk: The degree of probability of loss or chance of loss taken by an insurance company when they provide you with insurance coverage.
S
Second Opinion: A medical opinion provided by a second physician after a serious diagnosis has been made by a first physician.
Short Term Disability: This term refers to an injury or illness that prevents an individual from working for a short period of time.
Short Term Medical: Health insurance coverage that is temporary, usually anywhere from 30 days to six months.
T
Triple Option: An insurance plan that offers an individual three options which are usually a traditional indemnity plan, an HMO and a PPO.
U
Underwriter: This refers to the company who assumes the risk and responsibility of the insurance policy.
W
Waiting Period: This is a length of time where you do not have insurance coverage for a particular problem.
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