Health Insurance Articles

An Essential Glossary of Health Insurance Terms And Information

2010-12-12

Health insurance plans have many terms that may be difficult to understand. If you have health insurance coverage or are in search of a plan, here is a list of commonly used words and its descriptions.

Annual Maximum amount. The maximum dollar amount an insured member is expected to pay for all medical services in one year.

Claim. A form submitted by a doctor's office, hospital or health-care facility to the health care insurer or plan on behalf of a member. Payments and costs for services are determined by a claim.

Coinsurance. A member's responsibility to pay a percentage of the medical expense for coverage within a health insurance plan. A common coinsurance portion for a member is 20 percent.

Co-payment. An amount that a member pays out of pocket for a medical service at the time the service is received.

Deductible. Annual amounts that an insured member would need to pay before certain benefits take effect.

Exclusion. Services that the health insurance group plan or policy will not cover.

Health Insurance Portability and Accountability Act (HIPAA). A federal law that requires companies providing health insurance coverage to abide by including regulations that protect the privacy and security of the insured member.

Health Maintenance Organization (HMO). Medical services provided by a health-care system to insured members for fixed or prepaid fees.

Lifetime Maximum amounts: The maximum dollar amount an insured member is expected to pay for all medical services in his or her lifetime.

Medicaid. A program that provides medical expenses coverage to disabled, low-income and people of a certain age group.

Medicare. A program established by the Social Security Act of 1965 that provides medical and hospital expenses to disabled and elderly persons.

Open Access. An insured member has the ability to see a specialist in or out of network at a reduced or full benefit without prior approval from a Primary Care Provider (PCP).

Out of Pocket. Any amount that an insured member pays in co-payments, deductibles or co-insurance for exchange of service.

Pre-existing condition. In a group health insurance plan, this term generally describes a condition for which an individual received medical care prior to the effective date of coverage.

Primary Care Provider (PCP). A physician or provider that serves as the insured member first contact in a health insurance plan.

Preferred Provider Organization. A health-care provider who contracts with health insurance companies to supply services at a discounted costs and coverage to insured members.

The vocabulary may differ slightly with each health insurance plan. A good knowledge of health insurance terms can be beneficial in helping you make wise medical decisions and choosing a health plan that's appropriate.