Health Insurance Glossary: Simplifying Health Insurance Language
Health Insurance Glossary
To understand your insurance options and get quotes that accurately represent the coverage you want, you need to know what certain insurance terms mean.
Terms
Benefits
Medical services included in a health plan.
Catastrophic Health Insurance
Very costly insurance covering medical expenses above ordinary health insurance.
Copayment
The fixed amount of money you pay out-of-pocket for an appointment, service, or prescription. You usually pay this at the time of service.
Coinsurance
The agreement between the insured and the insurer to share reasonable costs at fixed percentages. This term is often used with PPO plans and fee-for-service plans, and essentially means the same as copayment. Coinsurance, however, is usually paid after the service or as part of the reimbursement process.
Deductible
The amount of money you must pay for a particular service or at the start of a calendar year before your health care insurance begins coverage.
EPO
Exclusive Provider Organization
Exclusion
Any service that is not covered by the insurance company.
Exclusionary rider
An addendum to standard benefits from an insurance policy that excludes a pre-existing condition. California does not allow exclusionary riders but does allow companies to decline enrollment.
Exclusion Period (see also Waiting Period)
The length of time an insurance applicant may be asked to wait by the insurance company in order to get insurance for a particular pre-existing health issue.
Fee-For-Service (FFS) Plan (See also Indemnity Health Insurance Plan)
FSA (Flexible Spending Arrangement)
An arrangement in which a certain amount of money can be deducted from your gross income before taxes and placed in an account to be used for medical expenses.
HIPAA (Health Insurance Portability and Accountability)
A ruling to require access to individuals and families who have lost group health insurance, used up COBRA benefits, or are uninsurable due to pre-existing medical conditions. The cost may be high but the insurance is guaranteed to you if you qualify.
HMO Health Maintenance Organization
HSA (Health Savings Account)
A health savings account you an open at a bank if you have a health plan that accepts it. HSA’s are for high-deductible health plans (HDHP’s) that offer only limited wellness-care services (such as check ups) until your deductible is reached. The money in your account is deducted from your income and can be used for medical purposes only. Deductibles and maximum deposit amounts are set yearly.
Indemnity Health Insurance Plan (See also Fee-For-Service (FFS) Plan)
Managed Care Health Insurance Plan
Plans such as HMO’s, PPO’s, POS, or EPO’s.
Maximum Benefit Limit
The maximum total amount of money the insurance company will pay towards a certain service, or for a certain condition, or for the lifetime of the individual.
Network (or In-Network)
A group of physicians, health care providers, and facilities that own or operate within a managed health care plan, such as an HMO, PPO, or POS. Opposite of Out-of Network.
PCP (Primary Care Physician or Personal Care Provider)
A health care professional who participates in your health care system. If your group insurance plan requires a PCP, the plan will offer a list of physicians from which you choose.
POS Point of Service plan
PPO Preferred Provider Organization
Pre-authorization Requirement
The need to get permission from the insurance company before medical services are scheduled/performed.
Pre-existing Condition
A medical condition that was diagnosed and/or treated before the individual applied for an insurance plan.
Premium
The amount of money you must pay monthly or yearly for your health insurance coverage.
Reimbursement
A system of payment in which you pay the provider for services and you file to be repaid a certain portion of that payment from your health insurance.
SDHD (Self-Directed Health Plan)
A high-deductible health plan with features like a PPO but including a self-directed account, or SDA, in which you place a given amount of money to be used for health care.
Short-Term Health Insurance (Temporary Health Insurance)
A plan purchased for a limited time period (30 days to a year) to cover a gap in insurance coverage, such as after a job loss or college graduation.
Subscriber
The person who holds or buys the insurance policy.
Waiting Period (see also Exclusion Period)
A length of time before certain benefits begin on a policy.
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