Glossary

Here are some definitions of key terms related to health insurance and health care.

A

Accident Insurance

Accident insurance can help cover health care and related expenses in the event of an unexpected injury. While coverage can vary, these may include emergency treatment and hospital charges, as well as other medical expenses.

Accountable Care Organizations (ACO)

Accountable Care Organizations (ACOs) are groups of health care providers (including doctors and hospitals) who come together to provide coordinated care to Medicare patients. They utilize a model that seeks to tie provider reimbursements to quality care and cost reduction metrics. Affordable Care Act (ACA) – The Patient Protection and Affordable Care Act is the national health care law enacted in 2010. It is widely considered the most significant health care reform legislation since Medicare and Medicaid were enacted in 1965.

Affordable Care Act (ACA)

The Patient Protection and Affordable Care Act is the national health care law enacted in 2010. It is widely considered the most significant health care reform legislation since Medicare and Medicaid were enacted in 1965.

B

Beneficiary

The person who is designated to receive benefits under a life insurance policy.

Bronze Plans

This is the lowest category level in the range of health insurance plans offered by exchanges under the Affordable Care Act, covering approximately 60% of health care costs. The category levels (in order) include Bronze, Silver, Gold and Platinum. Bronze level plans generally have lower monthly premiums but higher out-of-pocket costs. At the other end of the spectrum, Platinum level plans have higher premiums but lower out-of-pocket costs. The plan you choose depends on how much health care you expect to use each year.

C

Claims Review

The method by which an insured’s health care services are reviewed prior to reimbursement. The purpose of the claims review process is to validate the medical necessity of the provided services and to establish that the cost of the service is not excessive.

COBRA

This is short for the Consolidated Omnibus Budget Reconciliation Act (COBRA), which gives workers and their families who lose their group health insurance benefits (due to job loss, death or divorce, for example) the right to continue to receive coverage under the group health plan for a certain time period if they meet certain conditions. They may be required to pay the entire premium for this continued insurance coverage.

Copayment

A cost-sharing arrangement in which a plan member pays a specified charge for a specified service, such as a $30 fee for an office visit. The member is usually responsible for payment at the time of services.

Covered California

Covered California is the state of California's health insurance exchange, where state residents including individuals, families and small businesses can compare health care insurance plans available to them. Covered California is part of the national health care law (also called the Affordable Care Act).

Critical Illness Insurance

This is insurance coverage designed to help cover the cost of treating serious illnesses or diseases as specifically described in the policy, in exchange for paying premiums. Examples of conditions that might be covered include terminal illness, paralysis or organ failure.

D

Deductible

The out-of-pocket expenses that are the responsibility of an insurance policy holder before the insurer will start paying for medical losses. For example, a policy with a $500 deductible requires the patient to pay the first $500 of a medical bill, while insurance benefits apply to costs incurred above this threshold.

Dental Insurance

An insurance plan covering health care costs for teeth and gums, including regular check-ups. A dental insurance plan can help cover the cost of unexpected dental expenses. Pediatric dental coverage is an essential benefit under the Affordable Care Act.

E

Evidence of Insurability

This is proof of good health (through a statement of your medical history and other information) in order to obtain insurance. It is generally needed when applying for life insurance, not health insurance. Under the Affordable Care Act, health insurance companies cannot deny coverage or charge higher premiums because of a pre-existing condition.

Exchange

The health insurance marketplace set up by each state to facilitate the purchase of health insurance plans as part of the Affordable Care Act.

F

Flexible Spending Account (FSA)

A tax-advantaged account associated with an employer-based health care plan. You can deposit money (or employers can make contributions) into the account to be used to pay for qualified out-of-pocket health care costs (but not insurance premiums).

Formulary

This is a drug list, or a list of prescription drugs (both brand name and generic) covered by your insurance plan.

G

Gold Plans

This is a mid-upper category level in the range of health insurance plans offered by exchanges under the Affordable Care Act, covering approximately 80% of health care costs. The category levels (in order) include Bronze, Silver, Gold and Platinum. Bronze level plans generally have lower monthly premiums but higher out-of-pocket costs. At the other end of the spectrum, Platinum level plans have higher premiums but lower out-of-pocket costs. The plan you choose depends on how much health care you expect to use each year.

Group Health Insurance

This is employer-provided health insurance for business owners and their employees.

Guaranteed Issue

This means you are guaranteed to be accepted into an insurance plan regardless of your age or pre-existing conditions.

H

Health Maintenance Organization (HMO)

The Managed Care Act of 1973 allowed for a new form of medical delivery system called a health maintenance organization (HMO). An HMO is a corporate entity that provides, offers or arranges for coverage of specified health services for plan members at a fixed, prepaid premium. HMOs typically require members to select a primary care physician who functions as a first contact with the system for most non-emergency health issues. As such, primary care physicians serve as gatekeepers to the use of specialists and diagnostic tests.

Health Reimbursement Account (HRA)

A Health Reimbursement Account (HRA) is an employer-funded health care benefit plan that reimburses employees for health care costs such as insurance premiums and out-of-pocket medical expenses.

Health Reimbursement Arrangement (HRA)

A Health Reimbursement Account is the same as a Health Reimbursement Arrangement (HRA). It is an employer-funded health care benefit plan that reimburses employees for health care costs such as insurance premiums and out-of-pocket medical expenses.

Health Savings Account (HSA)

A Health Savings Account (HSA) is a medical savings account with tax advantages. They are sometimes available to people who are enrolled in high-deductible health care plans. When money is deposited into an HSA, it is not subject to federal income tax.

HIPAA

This is short for the Health Insurance Portability and Accountability Act passed by Congress in 1996. HIPAA provides workers or their families the ability to transfer and continue health insurance coverage when they change or lose their jobs, mandates industry standards for health care information, and requires the protection and confidential handling of patient health information.

L

Life Insurance

An insurance contract in which the insured person pays premiums in exchange for the insurance company paying a designated beneficiary an agreed upon amount upon the death of the insured.

M

Medicaid

Medicaid is a government program run by the states to provide health care for people with low incomes. Every state has different program eligibility requirements and benefits.

Medical and Dependent Care Expenses

These terms refer to the two types of Flexible Spending Accounts (FSAs) that could be made available through your employer. Medical Expenses are qualified medical expenses not paid for by insurance (such as deductibles and copayments). Dependent Care Expenses are unreimbursed expenses that you may incur when taking care of your dependent (such as a child care or senior care).

Medical Insurance

Also referred to as health insurance or health care coverage, medical insurance can help cover the cost of health care providers and facilities necessary to improve or maintain your health. This insurance coverage is typically provided in exchange for a monthly premium.

Medically Necessary

Those services deemed essential to the preservation and maintenance of the health of a patient in accordance with the standards of medical practice.

Medicare (Parts A, B, C, D)

Medicare is the government’s health insurance program for people age 65 or older. Sometimes people with certain disabilities or conditions may also qualify for Medicare even if they are younger than age 65.

Medicare has four parts:

Part A (Hospital insurance) helps pay for inpatient care in a hospital or skilled nursing facility (following a hospital stay), some home health care and hospice care.

Part B (Medical insurance) helps pay for services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventive services.

Part C (Medicare Advantage plans) allows people with Medicare Parts A and B to receive all of their health care services through a single provider under Part C. Private companies offer Medicare Advantage plans that provide extra coverage and sometimes lower out-of-pocket expenses. With a Medicare Advantage plan, there is no need for a Medigap plan.

Part D (Prescription drug coverage) helps pay for the costs of prescription drugs.

Medigap

Medigap refers to a supplemental health care plan that covers some of the medical expenses that Medicare does not. These supplemental policies are provided by private insurance companies.

Network – The group of health care facilities, providers and suppliers your health insurance company or plan has contracted with to provide health care services. “In-Network” refers to health care facilities, providers and suppliers who are part of an insurance company’s network and “Out-of-Network” refers to those who are not part of the network. Usually costs are lower when using in-network providers.

N

Network

The group of health care facilities, providers and suppliers your health insurance company or plan has contracted with to provide health care services. “In-Network” refers to health care facilities, providers and suppliers who are part of an insurance company’s network and “Out-of-Network” refers to those who are not part of the network. Usually costs are lower when using in-network providers.

O

Open Enrollment

Open enrollment is the designated time period in which you can sign up for health care coverage for the upcoming calendar year. Open enrollment happens once a year, usually beginning in late Fall.

Out-of-Pocket Maximum

All insurance plans have an “out-of-pocket maximum” amount that limits the total amount you spend on health care in a given year, regardless of how much health care you need.

P

Patient

Signifying someone who is either receiving medical services or who is in a contractual relationship with an organization that provides such services. Also known as member or enrollee.

Physician

Refers to MDs (Medical Doctors) and DOs (Doctor of Osteopathic Medicine); sometimes used to refer to anyone who provides diagnostic and treatment services as a physician.

Platinum Plans

This is the highest category level in the range of health insurance plans offered by exchanges under the Affordable Care Act, covering approximately 90% of health care costs. The category levels (in order) include Bronze, Silver, Gold and Platinum. Bronze level plans generally have lower monthly premiums but higher out-of-pocket costs. At the other end of the spectrum, Platinum level plans have higher premiums but lower out-of-pocket costs. The plan you choose depends on how much health care you expect to use each year.

Preauthorization – A method that insurers and managed care companies use to monitor and control the delivery of medical care by evaluating the need for a service before the patient is allowed to receive care; it is usually done by trained, mid-level providers, such as nurses.

Preferred Provider Organizations (PPO)

A PPO is an arrangement between providers, who offer services at a discounted rate, and an insurer, who in return offers to grant those providers preferred status. PPO members have incentives (such as lower deductibles and copayments) to use these preferred providers, while those who want to use out-of-plan providers do so at a higher cost. Single physicians and groups can belong to one PPO, or several at the same time, each with different terms and for different populations. PPOs are well received by members due to their increased “freedom of choice” and flexibility of care, however, premiums and out-of-pocket expenses for a PPO are generally higher than for an HMO.

Silver Plans – This is a mid-category level in the range of health insurance plans offered by exchanges under the Affordable Care Act, covering approximately 70% of health care costs. The category levels (in order) include Bronze, Silver, Gold and Platinum. Bronze level plans generally have lower monthly premiums but higher out-of-pocket costs. At the other end of the spectrum, Platinum level plans have higher premiums but lower out-of-pocket costs. The plan you choose depends on how much health care you expect to use each year.

Premium

The fee an insurance company charges in exchange for insurance coverage.

Prescription Drugs

Drugs and medications that require a prescription by law. Generic drugs have the same active ingredients as Brand Name drugs that have already been approved by the Food and Drug Administration (FDA). Generic Drugs only become available after the patent expires on a Brand Name drug.

Primary Care Physician

A physician who practices any of the generalist specialties of family practice, pediatrics and general internal medicine.

Provider

Anyone or any organization that provides health care, including hospitals, physicians, nurses, nurse practitioners, physician assistants, physical therapists and so forth.

Q

Qualifying Life Event (QLE)

A “qualifying life event” is something that happens in your life that would allow you to obtain new health insurance coverage through a special enrollment if the regular open enrollment period has already closed for the year. A qualifying life event could include: getting married, having a baby, having a substantial change in income, losing your current health insurance, or moving to a new state. There are many other circumstances that may be considered a “qualifying life event” that would enable you to get health insurance at any time of the year.

R

Rate Review

A process that allows state insurance departments to review rate increases before insurance companies can apply them to you.

Rider

A rider is a provision of an insurance policy that is purchased separately from the basic policy and that provides additional benefits at additional cost.

S

Silver Plans

This is a mid-category level in the range of health insurance plans offered by exchanges under the Affordable Care Act, covering approximately 70% of health care costs. The category levels (in order) include Bronze, Silver, Gold and Platinum. Bronze level plans generally have lower monthly premiums but higher out-of-pocket costs. At the other end of the spectrum, Platinum level plans have higher premiums but lower out-of-pocket costs. The plan you choose depends on how much health care you expect to use each year.

Subsidy

A subsidy is a payment from the government that reduces your health care costs. Under the Affordable Care Act, many individuals and families are eligible to receive subsidized health insurance coverage if they are not eligible for Medicare or Medicaid and are not offered affordable coverage through their employer. Your eligibility depends on factors such as your annual household income and how many people are in your household.

T

Tax Penalty

Obamacare imposes a tax penalty if you go without health insurance for over three months.

U

Urgent Care

Typically a walk-in clinic focused on the delivery of ambulatory care in a dedicated medical facility outside of a traditional emergency room. Urgent care centers primarily treat injuries or illnesses requiring immediate care, but not serious enough to require a visit to an emergency room.

V

Vision Insurance

A vision insurance plan helps cover the cost of things such as eye exams, glasses and contact lenses. All new health care plans under the Affordable Care Act are required to provide pediatric vision coverage. Adult vision coverage may or may not be included, depending on the plan you choose.

W

Wellness

Wellness programs are designed to help keep people healthy and living their best possible life. For example, wellness programs could help people stop smoking, lose weight, manage chronic conditions, or simply get the preventative care they need.