affordablehealthinsurancequote's health insurance Glossary
A
adjusted community rating (ACR) A rating method under which a health plan or MCO divides its members into classes or groups based on demographic factors such as geography, family composition, and age, and then charges all members of a class or group the same premium. The plan cannot consider the experience of a class, group, or tier in developing premium rates. Also known as modified community rating or community rating by class.
agent A person who is authorized by an insurer to act on its behalf to negotiate, sell, and service managed care contracts.
ancillary services Auxiliary or supplemental services, such as diagnostic services, home health services, physical therapy, and occupational therapy, used to support diagnosis and treatment of a patient's condition.
annual out-of-pocket maximum A dollar amount set by the plan which puts a cap on the amount of money the insured must pay out of his or her own pocket for covered expenses over the course of a calendar year.
annual maximum benefit amount The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healthcare services provided to a subscriber in a year.
applicant The person or business that applies for an insurance policy.
B
beneficiary The person or party the owner a life insurance policy names to receive the policy benefit in the event of the insured's death.
brand-name (medications)
Prescription medications that are manufactured by the developer of the medication in question.
broker A salesperson who has obtained a state license to sell and service contracts of multiple health plans or insurers, and who is ordinarily considered to be an agent of the buyer, not the health plan or insurer.
C
calendar-year deductible
An amount that the insured person must pay before insurance payments for covered services begin.
captive agents Agents that represent only one health plan or insurer.
certificate of insurance A document that describes the type and length of coverage provided by a group insurance policy that is given to each insured by the group policyholder.
CHAMPUS See Civilian Health and Medical Program of the Uniformed Services.
Children's Health Insurance Program (CHIP). A program, established by the Balanced Budget Act, designed to provide health assistance to uninsured, low-income children either through separate programs or through expanded eligibility under state Medicaid programs.
chiropractic care Not all plans cover chiropractors -- practitioners who manipulate the spine and other structures within the body to relieve pain and tension resulting from posture, stress or strain. Some plans offer chiropractic care as an optional benefit.
Civilian Health and Medical Pro- gram of the Uniformed Services (CHAMPUS) A program of medical benefits available to inactive military personnel and military spouses, dependents, and beneficiaries through the Military Health Services System of the Department of Defense. See also TRICARE.
claim An itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.
claim form An application for payment of benefits under a health plan.
claimant The person or entity submitting a claim.
claims administration The process of receiving, reviewing, adjudicating, and processing claims.
claims investigation The process of obtaining all the information necessary to determine the appropriate amount to pay on a given claim.
closed access A provision which specifies that plan members must obtain medical services only from network providers through a primary care physician to receive benefits.
closed formulary The provision that only those drugs on a preferred list will be covered by a PBM or MCO.
closed-panel HMO An HMO whose physicians are either HMO employees or belong to a group of physicians that contract with the HMO.
closed PHO A type of physician-hospital organization that typically limits the number of participating specialists by type of specialty.
COBRA See Consolidated Omnibus Budget Reconciliation Act.
coinsurance A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.
coinsurance provision A specified percentage of the cost of treatment the insured is required to pay for all covered medical expenses remaining after the policy's deductible has been met.
commission The amount of money, usually a percentage of the premiums, that is paid to an insurance agent for selling an insurance policy.
community rating A rating method that sets premiums for financing medical care according to the health plan's expected costs of providing medical benefits to the community as a whole rather than to any sub-group within the community. Both low-risk and high-risk classes are factored into community rating, which spreads the expected medical care costs across the entire community.
comprehensive major medical policy A health insurance policy that covers both major medical coverages (i.e., hospitalization and surgeries) and basic medical expense coverages.
Consolidated Omnibus Budget Reconciliation Act (COBRA) 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.
copay (1) A fee that many insurance plans require an insured to pay for certain medical services (such as a physician's office visit). (2) An amount that the insured must pay toward the cost of each prescription under a prescription drug plan
copayment A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.
D
deductible A flat amount of covered medical expenses that an insured must incur before the insurer will make any benefit payments under a medical expense policy.
dental benefits Some health plans offer dental care as an optional benefit or rider that you or your employees may decide to add at an additional cost.
dental health maintenance organization (DHMO) An organization that provides dental services through a network of providers to its members in exchange for some form of prepayment.
dental point of service (dental POS) option. A dental service plan that allows a member to use either a DHMO network dentist or to seek care from a dentist not in the HMO network. Members choose in-network care or out-of-network care at the time they make their dental appointment and usually incur higher out-of-pocket costs for out-of-network care.
dental POS option See dental point of service option.
dental PPO See dental preferred provider organization.
dental preferred provider organization (dental PPO) An organization that provides dental care to its members through a network of dentists who offer discounted fees to the plan members.
dependent A person for whom the insured has some legal obligation to. For most plans, it is the insured's spouse and/or children. Some plans also allow non-traditional spousal relationships (significant other, life-partner, etc.) to be considered a dependent with some additional certifying paperwork.
DHMO See dental health maintenance organization.
diagnostic and treatment codes Special codes that consist of a brief, specific description of each diagnosis or treatment and a number used to identify each diagnosis and treatment.
discount dental insurance plan Dental insurance card that provides discounted fees for dentist services.
domestic partnerDomestic partners are commonly defined as "two adults who share an emotional, physical and financial relationship similar to that of a married couple but who either choose not to marry or cannot legally marry. They share a mutual obligation of support for the basic necessities of life." Additionally, some carriers may require that domestic partners own property together to qualify.
drug cards See pharmaceutical cards.
drug utilization review (DUR) A review program that evaluates whether drugs are being used safely, effectively, and appropriately.
due process clause A provider contract provision which gives providers that are terminated with cause the right to appeal the termination.
DUR See drug utilization review
dual choice Dual choice allows the employer to offer his employees not one, but two health plans. Instead of picking the least expensive plan for all employees, Dual Choice lets employees choose the type of plan that best meets their needs or budgets. Usually, this is a choice of an HMO and PPO, or HMO and POS. The employer will typically pay a portion of the premium in these plans, and the employee will pay the balance. Here are a few approaches:
ı An employer may pay for the lower cost plan and employees may buy up to the more expensive plan.
ı An employer may pay a set amount per month for every employee.
ı An employer may charge all employees the same amount and pay the balance, regardless of the plan each employee selects.
E
early and periodic screening, diagnostic, and treatment (EPSDT) services Services, including screening, vision, hearing, and dental services, provided under Medicaid to children under age 21 at intervals which meet recognized standards of medical and dental practices and at other intervals as necessary in order to determine the existence of physical or mental illnesses or conditions. Plans offering Medicaid coverage to EPSDT participants must provide any service that is necessary to treat an illness or condition that is identified by screening.
effective date The specified date of when the health insurance policy is to begin.
emergency care Most plans cover emergency care in a hospital emergency room if it is an extremely urgent medical emergency, even if the hospital you are taken to is not in the plan's network. It is possible, however, that after your condition has been stabilized, you would be transferred to a participating plan hospital.
emergency-room visit A visit to a hospital for treatment of an accidental injury or for emergency medical care. To qualify as an emergency, the symptoms must be sudden, severe and require immediate medical attention. Some states judge emergencies by the "prudent layperson" law, meaning that the health plan must cover a trip to the emergency room "if a prudent layperson, acting reasonably, would have believed that an emergency medical condition existed." Keep in mind that some plans won't cover a trip to the emergency room if the symptoms appeared more than 24 hours earlier.
employee contribution The amount of premium the employer requires the employee to pay towards his or her health insurance.
Employee Retirement Income Security Act (ERISA) A broad-reaching law that establishes the rights of pension plan participants, standards for the investment of pension plan assets, and requirements for the disclosure of plan provisions and funding.
experience The actual cost of providing healthcare to a group during a given period of coverage.
experience rating A rating method under which an MCO analyzes a group's recorded healthcare costs by type and calculates the group's premium partly or completely according to the group's experience.
enrollment or eligibility period The time during which a new group member may first enroll for group insurance coverage.
exclusions and limitations Conditions, situations and services not covered by the health plan.
F
family health insurance plan A individual health insurance plan paid by the insured. See individual health insurance plan
Federal Employee Health Benefits Program (FEHBP) A voluntary health insurance program administered by the Office of Personnel Management (OPM) for federal employees, retirees, and their dependents and survivors.
Federal Trade Commission Act A federal act which established the Federal Trade Commission (FTC) and gave the FTC power to work with the Department of Justice to enforce the Clayton Act. The primary function of the FTC is to regulate unfair competition and deceptive business practices, which are presented broadly in the Act. As a result, the FTC also pursues violators of the Sherman Antitrust Act. See also antitrust laws.
fee allowance See fee schedule.
fee-for-service (FFS) payment system A system in which the insurer will either reimburse the group member or pay the provider directly for each covered medical expense after the expense has been incurred.
fee maximum See fee schedule.
fee schedule The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full. Also known as a fee allowance, fee maximum, or capped fee.
FEHBP See Federal Employee Health Benefits Plan.
FFS payment system See fee-for-service payment system.
formulary A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by an MCO's providers in prescribing medications.
fully funded plan A health plan under which an insurer or MCO bears the financial responsibility of guaranteeing claim payments and paying for all incurred covered benefits and administration costs.
functional status A patient's ability to perform the activities of daily living.
funding vehicle In a self-funded plan, the account into which the money that an employer and employees would have paid in premiums to an insurer or MCO is deposited until the money is paid out.
fully insured plan A group insurance plan for which an insurance company bears the responsibility of making all claim payments.
fully self-insured plan A group insurance plan under which the employer takes complete responsibility for all claim payments and related expenses rather than purchasing coverage from an insurance company.
G
gatekeeper A term used to describe the primary care physician's role in a managed care plan; this role is to authorize all services delivered to the insured by other physicians or health care providers. Thus, whenever you wish to see a physician other than your primary care physician, you must first obtain his or her permission (via a referral).
generic (medications) When a new drug is put on the market, the pharmaceutical company patents it under a brand name. The company has the exclusive right to sell the drug under this name, but once its patent expires, other companies can sell the same drug under its chemical, or generic, name. Generic drugs are typically cheaper than brand-name drugs, but the Food and Drug Administration requires generic drug manufacturers to show that a generic drug "delivers the same amount of active ingredient in the same time frame as the original product."
generic substitution The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit management plan's formulary. In most cases, generic substitution can be performed without physician approval.
group health insurance plans Paid by employers for their employees.
group market A market segment that includes groups of two or more people that enter into a group contract with an MCO under which the MCO provides healthcare coverage to the members of the group.
group model HMO An HMO that contracts with a multi-specialty group of physicians who are employees of the group practice. Also known as a group practice model HMO.
group practice model HMO See group model HMO.
guaranteed issue An insurance policy provision under which all eligible persons who apply for insurance coverage and who meet certain conditions are automatically issued an insurance policy.
guaranteed renewable policy A health insurance policy that the insurer is required to renew -- as long as premiums are paid -- at least until the insured attains the age limit specified in the policy, or the policy is cancelled by the insured. The insurer may increase the premium rate for any class of guaranteed renewable policies.
H
health care provider A doctor, hospital, laboratory, nurse or anyone else who delivers medical or health-related care.
health insurance A type of insurance that provides protection against the risk of financial loss resulting from the insured person's sickness, accidental injury or disability.
HCQIA See Health Care Quality Improvement Act.
HCQIP See Health Care Quality Improvement Program.
Health Care Quality Improvement Act (HCQIA) A federal act which exempts hospitals, group practices, and HMOs from certain antitrust provisions as they apply to credentialing and peer review so long as these entities adhere to due process standards that are outlined in the Act.
Health Care Quality Improvement Program (HCQIP) A program, established by the Balanced Budget Act of 1997, that seeks to improve the quality of care provided to Medicare beneficiaries by requiring Medicare+Choice coordinated care plans to undergo periodic quality review by a peer review organization.
Health Information Network (HIN) An electronic system that uses telecommunications devices to link various healthcare entities within a geographic region in order to exchange patient, clinical, and financial information in an effort to reduce costs and practice better medicine.
Health Insurance Portability and Accountability Act (HIPAA) A federal act that protects people who change jobs, are self-employed, or who have pre-existing medical conditions. HIPAA standardizes an approach to the continuation of healthcare benefits for individuals and members of small group health plans and establishes parity between the benefits extended to these individuals and those benefits offered to employees in large group plans. The act also contains provisions designed to ensure that prospective or current enrollees in a group health plan are not discriminated against based on health status. Health insurance portability and accountability act of 1996 (HIPAA) under this federal law (known as HIPAA), group health plans cannot deny coverage based soley on an individual's health status. This law also gives employees who change or lose their jobs better access to health coverage, guarantees renewability and availability to certain employees and limits exclusions for pre-existing conditions. For example, under this law, group health plans must credit any employee the amount of time that they spent on any health plan prior to the new plan, which is known as "prior credible coverage." A pre-existing condition will be covered without a waiting period when an employee joins a new group plan if the employee has been insured for the previous 12 months with credible health insurance, with no lapse in coverage of 63 days or more. This means that if an employee has been insured for 12 months or more, the employee will be able to go from one job to another and his or her pre-existing coverage will remain intact -- without additional waiting periods. However, if an employee has a pre-existing condition and was not covered previously for 12 months before joining a new plan, the longest the employee will have to wait for their pre-existing coverage to be covered is 12 months.
health maintenance organization (HMO) A healthcare system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee.
HIPAA See Health Insurance Portability and Accountability Act.
HMO See health maintenance organization.
HMO Act 1973 federal law that ensured access for HMOs to the employer-based insurance market.
hold harmless provision A contract clause which forbids providers from seeking compensation from patients if the health plan fails to compensate the providers because of insolvency or for any other reason.
home health care Skilled medical care and other health care services that you receive in your home for the treatment of an illness or injury. Some insurance plans don't provide this kind of coverage, or provide it only for a limited amount of time.
I
indemnity plan Also called a fee-for-service plan. A health insurance plan that allows the insured to use any medical provider that he or she chooses. As such, there are no networks to utilize.
independent agents Agents that represent the products of several health plans or insurers.
independent practice association (IPA) An organization comprised of individual physicians or physicians in small group practices that contracts with MCOs on behalf of its member physicians to provide healthcare services.
individual health insurance plan A health insurance plan for one individual (not group health insurance).
individual market A market segment composed of customers not eligible for Medicare or Medicaid who are covered under an individual contract for health coverage.
individual stop-loss coverage A type of stop-loss insurance that provides benefits for claims on an individual that exceed a stated amount in a given period. Also known as specific stop-loss coverage.
inpatient surgery Medical procedures which require the patient to spend at least one night at the hospital. Most plans limit the amount of time an inpatient may stay at the hospital following surgery.
insurance agent A person authorized by an insurance company to represent the company in its dealings with applicants for insurance.
insured The person whose life or health is insured under an insurance policy. Also referred to as a "member."
J
Sorry, we have no glossary items beginning with the letter J.
K
Sorry, we have no glossary items beginning with the letter K.
L
large group A large pool of individuals for which health coverage is provided by the group sponsor. A large group may be defined as more than 250, 500, 1,000, or some other number of members, depending on the MCO.
life dependent This option is offered by some plans to provide a set amount of life insurance for the insured's spouse, domestic partner or children.
lifetime maximum The maximum amount of money a plan will pay towards healthcare services over the course of the insured's lifetime.
M
major medical insurance plan A type of traditional medical expense coverage that provides substantial benefits for hospital surgical expenses and physicians' fees.
managed care A method of integrating the financing and delivery of health care within a system that seeks to manage the cost, accessibility and quality of care.
maternity coverage 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.
mail-order pharmacy programs Programs that offer drugs ordered and delivered through the mail to plan members at a reduced cost.
managed behavioral health organization (MBHO) An organization that provides behavioral health services using managed care techniques.
managed care The integration of both the financing and delivery of healthcare within a system that seeks to manage the accessibility, cost, and quality of that care.
managed care organization (MCO) Any entity that utilizes certain concepts or techniques to manage the accessibility, cost, and quality of healthcare. Also known as a managed care plan.
managed care plan See managed care organization (MCO).
managed dental care Any dental plan offered by an organization that provides a benefit plan that differs from a traditional fee-for-service plan.
managed indemnity plans Health insurance plans that are administered like traditional indemnity plans but which include managed care "overlays" such as precertification and other utilization review techniques.
Management Services Organization (MSO) An organization, owned by a hospital or a group of investors, that provides management and administrative support services to individual physicians or small group practices in order to relieve physicians of non-medical business functions so that they can concentrate on the clinical aspects of their practice.
manual rating A rating method under which a health plan uses the plan's average experience with all groupsıand sometimes the experience of other health plansırather than a particular group's experience to calculate the group's premium. An MCO often lists manual rates in an underwriting or rating manual.
McCarran-Ferguson Act A federal act that placed the primary responsibility for regulating health insurance companies and HMOs that service private sector (commercial) plan members at the state level.
MCO See managed care organization.
Medicaid 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 advisory committee Committee whose purpose is to review general medical management issues brought to it by the medical director.
medical center See ambulatory care facility (ACF).
medical clinic See ambulatory care facility (ACF).
medical savings account (MSA) A trust that employees of small businesses may establish to pay for out-of-pocket medical expenses.
medical underwriting The evaluation of health questionnaires submitted by all proposed plan members to determine the insurability of the group.
Medicare 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 part of Medicare that provides basic hospital insurance coverage automatically for most eligible persons. See also Medicare.
Medicare Part B A voluntary program that is part of Medicare and provides benefits to cover the costs of physicians' services. See also Medicare.
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 known as Medicare+Choice. See also Medicare.
Medicare+Choice See Medicare Part C.
Medicare+Choice MSAs Accounts created by contributions from HCFA to pay out-of-pocket medical expenses for Medicare beneficiaries. The accounts are used in conjunction with high-deductible, catastrophic healthcare policies.
Medicare supplement A private medical expense insurance plan that supplements Medicare coverage. Also known as a Medigap policy.
Medigap policy See Medicare supplement.
member services The department responsible for helping members with any problems, handling
member grievances and complaints, tracking and reporting patterns of problems encountered, and enhancing the relationship between members of the plan and the plan itself.
Mental Health Parity Act (MHPA) A federal act which prohibits group health plans that offer mental health benefits from applying more restrictive limits on coverage for mental illness than for physical illness. | 
