Health Insurance Glossary
Confused About A Term?
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
the thing the person or group needs or wants.
Benefit: Amount payable to the insurance company to the
claimant, assignee or beneficiary when the insured suffers a loss.
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 the services offered by the health maintenance providers. Provider is a term which usually refers to
the doctors or hospital.
Case Management: Case management is a system
embraced by employers and insurance companies to ensure that individuals receive appropriate, reasonable health care services.
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.
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 changes 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.
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.
Dependent Worker: A worker in a family in
which someone else has greater personal income.
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.
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 (HMO's): Health Maintenance Organizations represent "pre-paid" or "capitated" insurance plan 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.)
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.
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.
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.
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 and is not offered by 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.
Open-ended HMOs: HMOs that 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: This phrase usually refers to
physicians, hospitals or other health care providers who are considered non-participants 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.
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. The individual often must obtain pre-admission certification. 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 should 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.
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.
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.
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.
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.
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.
Waiting Period: A period of time when you are
not covered by insurance for a particular problem.
