Here are some helpful definitions of common health insurance words and terms:
Ambulatory care—All types of health services that are provided on an outpatient basis, in contrast to services provided in the home or hospital.
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Benefits—Services provided to a member of a health plan, like doctor visits or prescription coverage. Covered services are defined by the policy.
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CDHP (Consumer-Directed Health Care Programs)—Health care plans that put you and your providers at the center of health care decision-making, giving you greater discretion and control over benefit dollars and care choices.
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Coinsurance—The portion of the bill or contracted charge for which you (the member) are responsible. For example, a 25 percent coinsurance for drugs means you pay 25 percent of the costs for that prescription and your health care plan pays 75 percent of the cost.
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Copayment—This is a flat fee you must pay for services after you’ve met your plan deductible. For instance, you may pay a $10 copayment every time you visit the doctor. Your plan pays the rest.
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Deductible—A specific amount of money you must pay for care each year before your insurance plan begins to cover you.
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Department of Insurance (DOI)—The DOI in each state protects the rights of citizens in their insurance transactions and monitors insurance companies.
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Effective date of enrollment—The date your membership in a health plan begins.
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Emergency services—Covered services that are furnished by a provider qualified to provide emergency services and needed to evaluate or stabilize an emergency medical condition.
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Exclusion—A health care service not reimbursable through an insurance plan or HMO (e.g., elective cosmetic surgery, etc.).
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Fee-for-Service (FFS)—A payment system by which doctors, hospitals and other providers are paid a specific amount for each service performed.
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Formulary—An insurance company’s list of covered drugs.
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Group health plan—A plan sponsored by an employer, union or professional association that covers at least two employees. A small group health plan is for employers with two to 50 employees.
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Health education—Educational program designed to improve and maintain your health.
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Health insurance—Protection against the costs of hospital and medical care arising from an illness or injury.
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Health savings account—A tax-free account established by an employer or individual to save money for medical expenses. Any money not used for expenses may be rolled over to the next year.
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HMO (Health Maintenance Organization)—A form of managed care in which health plans contract with medical groups to provide a full range of health services for their enrollees for a fixed, pre-paid, per-member fee.
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Indemnity plan—An indemnity plan reimburses you for your medical expenses, regardless of who provides the service.
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Individual health plan—An insurance policy you buy independently, not as part of a group. Often purchased by self-employed, unemployed or workers with no group health insurance for themselves or their families.
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Inpatient services—Treatment obtained while hospitalized.
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Insurance—A system to protect persons, groups or businesses against the risks of financial loss by transferring the risks to an entity that agrees to share the financial losses in exchange for premium payments.
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Insurance Store Advisor—A representative who assists members with enrolling in a plan offered by The Insurance Store.
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Managed care—A type of health plan that uses a network of physicians, hospitals and other providers. Members may be required to see an in-network provider.
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MCO (Managed Care Organization)—The most common types of Managed Care Organizations (MCOs) include Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs).
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Multi-specialty group—Physicians representing various medical specialties working together in a group setting.
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Network—A group of health care providers under a contract.
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OOP (Out-of-Pocket)—Amount you must pay for service that is not paid for by the insurance plan.
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Out-of-Pocket limit—The maximum amount of medical expenses you and your family could pay each year.
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Outpatient services—Non-hospitalized treatment at a hospital,
clinic or dispensary.
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PBM (Pharmacy Benefit Manager)—A PBM is a third-party administrator of a prescription drug program responsible for processing and paying prescription drug claims.
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Plan premium—The monthly or quarterly payment to a health care organization that entitles you to the covered services.
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POS (Point of Service)—An HMO arrangement where the health plan covers out-of-network providers like PPOs under open-ended plans.
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PPO (Preferred Provider Organization)—A type of managed care plan that lets you choose physicians and other providers that do not participate in a network. A PPO will cover more of your medical expenses when you use an in-network health care provider.
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Preventive care—An approach to health care that emphasizes taking care of small conditions before they become big conditions that can become very costly. Preventive care measures include routine physical exams, diagnostic tests (e.g. Pap tests), immunizations and more.
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PCP (Primary Care Physician)—These physicians provide a full range of basic health services to their patients. General practitioners, pediatricians, family practice physicians and internists are recognized by health plans as primary care physicians.
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Referral—Written permission from your primary care physician allowing you to see a certain specialist or to receive certain covered services. The Insurance Store has plans that let you visit a specialist with no referral.
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Specialist—A doctor who provides health care services for a specific disease or part of the body. Examples include oncologists (care for cancer patients), cardiologists (care for the heart) and orthopedists (care for bones).
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Urgent care—Care that you get for a sudden illness or injury that needs medical treatment right away, but is not life threatening.
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Still have questions about terms or definitions? One of our friendly
advisors can help. Just call 1-866-591-2456 (TTY 1-866-343-3796)
Monday–Friday, 9 a.m.–9 p.m. ET.