applicant: The person, group or business applying for an insurance policy.
beneficiary: You and your dependents who are entitled to receive benefits under a plan.
claim: A notification to your insurance company that payment is due under the policy provisions.
co-insurance: The amount of health care bills you are required to pay after you have met the deductible. The co-insurance rate is usually expressed as a percentage, i.e., the insurance company pays 80 percent and you pay 20 percent, up to a maximum out-of-pocket limit.
After you hit the maximum out-of-pocket limit, your insurance company pays 100% of covered expenses during the remainder of the calendar year, up to any maximum limits of the policy.
co-payment: The portion of charges you need to pay your provider every time you receive a medical service, usually a fixed amount, e.g., $10 for prescription, $20 for every doctor’s visit. The insurance company pays the rest of the charges.
coverage: The scope of protection provided by a health insurance contract which includes any of the listed benefits or medical services/procedures in a policy.
creditable coverage: The number of months you were covered by health insurance before your current or new policy took effect. Creditable coverage must count towards any preexisting condition exclusion in either an individual or group policy. This is also referred to as "prior qualifying cverage."
deductible: A fixed amount of money you must pay each year to cover your medical expenses before your insurance policy starts paying. Typically, health plans with lower deductibles require higher premiums.
exclusions and/or limitations: Specific conditions or circumstances for which your insurance company will not provide benefits.
It is very important that you read all exclusion, limitation, and reduction clauses in your health insurance policy or certificate of coverage to determine which expenses are not covered.
Fee-For-Service Plans (FFS): Also known as Indemnity Plans. These are insurance plans that pay for medical services provided by any hospital or any doctor that you choose, at any time. There are no networks to utilize.
guaranteed issue: The requirement that all insurance companies accept all applicants regardless of health status. Under a guaranteed issue policy, your present and past physical condition is not considered part of the underwriting. You will not be required to go through physical examination.
The insurance company cannot decline coverage to you, as an applicant of a guaranteed issue policy, based on your medical history.
health insurance: A type of insurance that provides protection against the risk of financial loss resulting from sickness, accidental injury or disability.
Most HMOs require that you use physicians within their network. Oftentimes, you are required to choose your primary care physician who monitors your health and directs most courses of your treatment. HMOs use managed care techniques.
individual health insurance: A policy that provides protection to you and/or your family members. This is also referred to as the "individual market."
long term care insurance: A health plan that covers your medical care, nursing care and certain in-home care if you ever become unable to care for yourself due to an extended illness or disability.
managed care: Health care financing and delivery arrangements that are designed to manage and control health care costs and improve the utilization and quality of services. All HMOs, PPOs and many Fee-for-Service plans have managed care.
maternity health insurance: Many individual plans and some small-group plans for groups of fewer than 15 employees don't cover the costs associated with pregnancy and birth. However, federal law requires that group plans cover maternity if a group has 15 employees or more.
maximum out-of-pocket: The most amount of money that you are required to pay a year for deductibles and coinsurance. It is stated in fixed dollar amount set by the insurance company, in addition to regular premiums. This limits the amount you will have to pay in a given year for health care services.
Medicaid: State programs supported by federal matching funds, that provide health insurance and other public health assistance to qualified low-income persons.
Medicare: A federal health insurance program providing hospital, nursing, and home health care benefits for people 65 years and older or younger people who are totally disabled (or who have kidney failure) who are covered under Social Security benefits.
Medigap (Medical supplemental insurance): Specifically designed to supplement Medicare's benefits and is regulated by federal and state law. This type of coverage helps seniors cover the costs of "gaps" in the coverage provided by Medicare.
member: You and your dependents who receive medical coverage under an insurance policy. Also referred to as the "insured."
out-of-pocket expenses: Those health care costs, not covered by the health insurance, that you pay for.
Point of Service Plans (POS): A Managed Care health plan that encourages you to seek care from certain providers by offering you more reimbursement.
You also have the ability to seek care outside the network, but at a lower reimbursement level. Some HMO health plans include a POS policy.
policy: A contract between you and the insurance company that outlines your responsibilities and those of the insurance company, the terms of the agreement, as well as the coverage and any exclusions of the health care plan.
preexisting condition: Any health problem (disease, illness, medical condition) for which you have received advice or treatment during the six months before obtaining health insurance.
Group health insurance cover preexisting conditions after you have been insured for 6 months. Individual health insurance cover preexisting conditions after you have been insured for one year.
premiums: The periodic (monthly or quarterly) payments you or your employer makes to the insurance company in exchange for insurance coverage.
Preferred Provider Organization (PPO): A combination of traditional fee-for service and HMO health plans. This is an organization of providers who have agreed to provide medical services for a discounted rate.
You can see any doctor in the PPO network without requiring any special approval, and you usually do not need to choose a primary care physician. You may also seek care outside the PPO network, but you will be incurring higher out-of-pocket expenses.
primary care physician: Usually your first contact for health care. In most cases, this is a family physician (or some women choose their gynecologist), who monitors your health, diagnoses and treats minor health problems, and refers you to specialists if needed.
provider: Any person (doctor, nurse, dentist) or institution (hospital or clinic) that provides medical services.
quote: The preliminary amount of premium you and/or the group will pay per month before underwriting factors are considered.
short term health insurance: A major medical plan designed to protect you in the event of an illness or injury during "gaps" in your traditional medical voverage - when you are between jobs or plans, a recent graduate, on strike, etc. Short-term plans do not cover routine exams and preventive care.
small business health insurance: Also known as "small group health insurance", this type of coverage is available to small businesses with 2 to 50 employees. It often offers less expensive premiums, tax advantages to business owners, and in most cases, coverage cannot be denied.
underwriting: The process by which an insurance company determines whether or not and on what basis it will accept your insurance application.