The actual amount of money your provider charged for medical care.
The percentage of total costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70%, you would be responsible for 30% of the costs of all covered benefits. (You could be responsible for less or more of total costs of covered services, depending on the terms of your insurance policy.) ACA approved plans are defined by the actuarial value- Bronze plans have an actuarial value of 60%, the lowest, while Platinum plans cover 90% of covered benefits.
Advanced Premium Tax Credit
A new tax credit to help you afford Marketplace health plans. Advance payments of the tax credit can be used right away to lower monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount.
Affordable Care Act (ACA)
A federal law providing for a fundamental reform of the United States healthcare system, signed into law by President Barack Obama in 2010. The law puts forth a number of new benefits, rights and protections for patients in regards to their healthcare. It also established health insurance marketplaces where Americans can purchase federally regulated and subsidized health insurance. The law expanded Medicaid and Medicare, requires all citizens to have coverage in 2014 and beyond, and contains new taxes and tax breaks. (Also called Obamacare.)
A third party company that offers unbiased rating information on health insurance companies.
All types of medical treatment which does not require you to be admitted to the hospital overnight. Please remember, this is the general explanation, please be sure to check your policy for its definition of Ambulatory Care.
An added attachment to a policy which changes the coverage in any way.
Coverage which will typically pay for certain professional services including: X-Rays, Lab work, chemo therapy, drug and other types of services. Some plans have optional ancillary coverage, although, most include it in the policy.
A maximum yearly dollar amount the health insurance company will pay out for the whole policy or on a particular benefit.
Association Health Plan
A health plan offered to members of an association. Many individual plans are sold primarily to the members of an association.
A time period of which benefits are available from the health insurance company.
The services or health care items you receive from your health insurance company. Every health insurance plan should come with an explanation of benefits- a document explaining what benefits are covered, and what is excluded.
Brand Name Drug
A prescription drug which is marketed with a brand name by the company which manufactures the medication. Brand name drugs are typically covered by patent protection for a period of time, after which the drug will be available in a generic form. Until this time, you may have to pay more for the medication or higher co-pay if applicable.
A termination of a policy premature of its normal expiration date.
Catastrophic Health Plan
Health plans that meet all of the requirements applicable to other Qualified Health Plans (QHPs) but that don't cover any benefits other than 3 primary care visits per year before the plan's deductible is met. The premium amount you pay each month for health care is generally lower than for other QHPs, but the out-of-pocket costs for deductibles, copayments, and coinsurance are generally higher. To qualify for a catastrophic plan, you must be under 30 years old or get a "hardship exemption" because your income is too low to afford a Silver level plan.
The most amount of money you will be required to pay out of pocket in the event that you have a large claim, or an abundance of claims in one year. This is often referred to as your “Stop Loss”.
A claim is a request for benefit from the insurance company in the event of a loss. When you visit the doctor, and submit the bill to the insurance company for payment, this is considered a claim.
An application for payment of benefits under a health plan.
Acronym for Consolidated Omnibus Budget Reconciliation Act. COBRA is a federal act which requires each group health plan to allow employees and certain dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered employee, and termination of employment.
A percent that the insurer pays after the insurance policy's deductible is exceeded. So it’s your share of the costs of a covered benefit. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, 20% coinsurance payment would be $20. The insurance carrier pays the rest of the allowed amount.
A policy which will be considered for renewal at each premium payment period, contingent on specific eligibility conditions. A Short-Term Medical policy is a good example of conditionally renewable.
CO-OP (Consumer Operated and Oriented Plan)
A new type of health insurer created by the Affordable Care Act. CO-OPs are member-governed, nonprofit health care systems. CO-Ops can be formed at a national, state, or local level and must be licensed as issuers in each state which they operate. CO-OPs can offer health plans both on and off exchange.
A fixed amount you pay for a covered health care service, like a doctor’s visit, usually when you get the service. For example, if you have a $15 copay, you pay that to the doctor, and your health insurance carrier is billed for the remainder of the bill.
The share of costs you pay “out of pocket” for, that are not covered by health insurance. This term generally includes deductibles, coinsurance, and copayments, but it doesn't include premiums, out of network charges, or the cost of non-covered services. The "out-of-pocket" payment varies among healthcare plans.
A Covered Expense is any service and/or product which is covered by the insurance company. Covered expenses are generally pre-defined in the policy certificate.
Also known as “Catastrophic Illness”. A serious health condition which can alter your life. Critical illnesses will typically place a large financial burden on the person who is ill. Cancer would be considered a Catastrophic or Critical Illness. Some health plans have additional catastrophic coverage as an option to purchase.
The amount you are required to pay for health care before your health insurance begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services. The deductible may not apply to all services.
The name of the illness which the doctor has deemed factual.
Services or products that are covered according to the health insurance contract.
Treatment received when an accident or illness is urgent. This type of treatment is for accidents or illnesses which need attention fast or you will have adverse effects.
A person who signs up for a health plan.
Episode of Care
The time which medical services were provided, typically in the same hospital stay.
Essential Health Benefits
A set of health care services that must be covered by Affordable Care Act approved plans. The ACA dictates all major medical plans offered in the individual and small group market, both on and off exchange, must offer a comprehensive package of health items and services. Essential health benefits must include items and services within at least the following 10 categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care.
Conditions or circumstances in which the policy will not provide benefits.
Exclusions And Limitations
Any waived expenses by the insurance company. All policies will have an exclusion section in the outline of coverage. This is where they will deem if a certain procedure or product is not covered by the insurance plan. Some procedures or materials may have limited coverage, which will also be listed in this area.
Exclusive Provider Organization (EPO)
A managed care plan where services are covered only if you go to providers in the plan’s network (except in an emergency).
Explanation of Benefits (EOB)
A notice sent from the health insurance company to the insured breaking down the resolution of a submitted claim. Listed on the EOB you should find such information as: name of services provided, total amount billed, amount paid by the health insurance company and any remaining costs that are the insured's responsibility.
A list of prescription drugs covered by a health plan offering prescription drug benefits. Also called a drug list.
A prescription drug which is formulated the same as the “brand name” medication it copied. Generic drugs are often a much more affordable alternative to brand name drugs.
Group Health Plan
Health insurance which is provided to employees from an employer.
H.I.P.A.A. Eligible Individual
H.I.P.A.A. eligible individuals must have had 18 months of continuous creditable health coverage. To be HIPAA eligible, at least the last day of your creditable coverage must have been under a group health plan; you also must have used up any COBRA or state continuation coverage; you must not be eligible for Medicare or Medicaid; you must not have other health insurance; and you must apply for individual health insurance within 63 days of losing your prior creditable coverage. When you're buying individual health insurance, HIPAA eligibility gives you greater protections than you would otherwise have under state law.
Acronym for Health Savings Account. An HSA is a tax-sheltered trust account that you own for the purpose of paying qualified medical expenses for yourself, your spouse, and your dependents. When you enroll in a High Deductible Health Plan, the carrier determines whether you are eligible for a Health Savings Accounts (HSA) or a Health Reimbursement Arrangement (HRA) based on the information you provide.
Health Maintenance Organization (HMO)
A type of health plan that limits coverage to a network of doctors who work for or contract with the HMO. An HMO usually won't cover out-of-network doctors except in the case of an emergency. HMOs often require members to live or work within its service area to qualify.
Health Savings Account (HSA)
A health savings account available to tax payers enrolled in a High Deductible Health Plan. The funds contributed to the account aren't subject to federal income tax at the time of deposit. Funds have to be used to pay for qualified health expenses, or they may incur penalties. Funds roll over year to year if they’re not used.
High Deductible Health Plan
A High Deductible Health Plan (HDHP) is a new health plan product that, when combined with a Health Savings Account (HSA), provides insurance coverage and a tax-advantaged way to help save for future medical expenses.
Usually refers to a provider contracted with the health insurance carrier to provide services to plan members at a negotiated rate. An out-of-network provider is a provider not contracted with the plan. Usually the out of pocket costs for an in-network provider will be less than those for an out-of-network provider. PPO, POS, HMO and indemnity plans make use of provider networks.
Treatment which is received by a patient during a confinement to a hospital.
Limited Benefit Plan
A plan that offers a limited or reduced set of benefits to the beneficiary as compared to an ACA approved, major medical health plan. Limited benefit health plans cost less than major medical plans. Limited benefit plans are not ACA compliant and will not protect you from tax penalties. Additionally, they limit your benefit by category. Typically every benefit you receive is capped off individually and has a maximum benefit amount. They are also known as limited medical plans, bare bones plans, mandate-light plans, mandate-free plans, minimum benefit plans, fixed benefit plans, mini-med plans and indemnity plans.
Long Term Care
Services and care provided on a continuing basis for the chronically ill or disabled. Care is provided to people who are unable to perform basic activities of daily living such as dressing or bathing. Long-term supports can be provided at home or on an inpatient basis (at a long-term care facility).
Acronym for Medical Information Bureau, an association of health and life insurance companies which maintain a database to ensure accuracy regarding a person's health when an insurance application is completed.
A jointly funded federal and state program that provides hospital expense and medical expense coverage to the low-income population and certain aged and disabled individuals.
Medical Savings Account
A trust that Small business owners were able to establish to pay for out-of-pocket medical expenses. MSA accounts are no longer used and are now considered H.S.A. accounts, which are accessible to most anyone.
A process used by insurance companies to try to figure out your health status when you're applying for health insurance coverage to determine whether to offer you coverage, at what price, and with what exclusions or limits.
Treatment or supplies which are needed for the treatment or diagnoses of a medical illness or injury. This excludes any items which are used solely for the convenience of your of the provider. Example: If you were to fall and have a laceration on your head. If stitches were needed, this would be a medically necessary item. If you wanted to have the scar removed for personal appearance reasons, this is typically a non-medically necessary treatment. In most cases an insurance company will not provide coverage for non-medically necessary services or items.
A federal government hospital expense and medical expense insurance plan primarily for elderly and disabled persons. See also Medicare Part A, Medicare Part B, and Medicare Part C.
Medicare Part A
The section of Medicare which provides basic hospital service insurance coverage for most eligible persons.
Medicare Part B
A voluntary program that is part of Medicare and provides benefits to cover the costs of physician services.
Medicare Part C
The part of Medicare that expands the list of different types of entities allowed to offer health plans to Medicare beneficiaries. Also referred to as Medicare+ Choice.
A private medical expense insurance plan that supplements Medicare coverage. Also referred to as a Medi-gap plan.
Minimum Essential Coverage
The minimum amount of health coverage a person needs to have to meet the individual responsibility requirement under the Affordable Care Act. Anyone who does not have this coverage must either qualify for an exception or face a tax penalty.
A group of doctors, hospitals, pharmacies and clinics which the insurance company has agreed with to provide services to the insured, typically for a discounted rate.
Informal name for the Affordable Care Act and its provisions. Also refers to the federal government subsidies and cost sharing for healthcare offered to qualified citizens.
Open Enrollment Period
The period of time during which individuals can buy ACA approved health plans in the Marketplace. For coverage starting in 2015, Open Enrollment is from November 15, 2014 through February 15, 2015. In subsequent years, Open Enrollment will be from October 15 through December 7. Outside of Open Enrollment, you can only buy a major medical insurance plan if you qualify for a Special Enrollment Period.
Out of Pocket costs
Expenses for health care that aren't reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments. All health services not covered by a health plan is also considered an out-of-pocket cost.
Treatment that is provided to a patient who is able to return home after care without an overnight stay in an inpatient facility.
Point of Service Plan (POS)
A type of health insurance plan that lets the member choose health services from in-network providers or out-of-network providers at the time care is needed, with different benefit levels.
A provider who has a contract with an insurance carrier to provide services at a discount.
Preferred Provider Organization (PPO)
A health plan that contracts with providers like hospitals and doctors to create a network. Providers in the plan’s network are less costly. You can use providers outside of the network, but for an additional cost.
The amount that must be paid for your health insurance plan. It’s usually a monthly, quarterly or yearly bill.
Premium Tax Credit
A new government issued tax credit to help people afford health coverage bought in the Marketplace. Under the Affordable Care Act, advance payments can be used right away to lower monthly premium costs. If you qualify, you can choose how much is applied to your premium each month. If your yearly amount of advance credit is less than the tax credit you're due, you’ll get the difference as a refundable credit when you file your federal taxes. If your advance payments for the year are more than your credit, you must repay the excess with your tax return.
Primary Care Physician
The doctor which you have chosen to provide basic healthcare services. This is the doctor which would perform wellness visits and such. You will typically see your primary care physician for any illness, he will then refer elsewhere if he/she feels another doctor or facility can provide better treatment for the issue.
Qualified Health Plan (QHP)
Under the Affordable Care Act, an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A qualified health plan will have a certification by each Marketplace in which it is sold.
Qualifying Life Event
A change in your life that can make you eligible for a Special Enrollment Period to enroll in health coverage. Examples of qualifying life events are moving to a new state, certain changes in your income, and changes in your family size. For example, if you marry, divorce, have a baby, move, or lose your job.
A reimbursement system that protects insurance companies from extremely high claims. It usually involves another company paying part of an insurance carrier’s claims once they surpass a certain amount. Reinsurance is a way to stabilize the market, and make coverage more affordable.
Special Enrollment Period
The time outside of Open Enrollment period when you have the right to sign up for health coverage. A Special Enrollment Period last 60 days after certain qualifying life events that involve a change in family make up (i.e. marriage, divorce, having a baby) or loss of other health coverage for a valid reason.
Stop Loss is referring to the total amount of money you will need to spend before the insurance company pays at 100%. Your stop loss total should include your deductible and co-insurance. Prescription drug and office visit co-pays typically go above and beyond the stop loss amount.
Financial assistance with health coverage for people with low and middle incomes.
Summary of Benefits and Coverage (SOB or SBC)
An easy-to-read summary that helps you make comparisons of costs and coverage between health plans. Comparative options include price, benefits, and other important features. You'll get the "Summary of Benefits” when you shop for coverage on your own or through your job, renew or change coverage from a health insurance carrier.
Total Cost Estimate
The total amount you may have to pay for health plan coverage, which is estimated before you actually have the coverage and have health expenses under the coverage.
Care for a condition serious enough that you should seek care right away, but not so severe as to require an E.R. visit.
Value-Based Purchasing (VBP)
Linking provider payments to improved performance by health care providers. This form of payment is intended to hold health care providers accountable for both the cost and quality of care they provide. It attempts to reduce inappropriate care and to identify and reward the best-performing providers.
Well-Baby and Well-Child Visits
Regularly scheduled preventative care services provided when a baby is young and annual visits until a children reaches 21 years old. Services include immunizations, physical exams and measurements, vision and hearing screening, and oral health risk assessments.