Health Insurance Glossary

Actual Charge
Actual amount charged by the provider.

Acute Care
Urgent medical care provided by a skilled medical professional.

Aftercare
Patient services required after hospitalization.

Allocated Benefits
Payments to a provider for a specified medical procedure and specified dollar amount.

Allowable Charge
The amount the insurance company allows for a certain service.

Allowable Costs
Charges that are for qualified services.

Ambulatory Care
Care that does not require a hospital stay.

Basic Hospital Expense Insurance
"Benefits providing payment for room, board, and other miscellaneous hospital expenses."

Board Certified
A professional that is certified as a specialist in a certain medical area.

COBRA
Consolidated Omnibus Budget Reconciliation Act of 1986. This federal law allows a person to continue group coverage for up to 18 months after leaving the group by job termination.

Calendar Year
A year beginning on January 1 and ending on December 31.

Closed Access
When an insurance company requires a member to have a primary care physician.

Coinsurance Clause
"After the deductible is met, the payment amount an insurance company requires a group participant to pay. Companies usually pay 80% and participants must only pay 20% of the provider bill up to the out-of-pocket limit. If you have difficulty understanding how this procedure works, contact your plan administrator."

Community Rating
"Rating system where insurance company does not use personal information, but instead uses hospital and provider bills as a basis for premium rates."

Comprehensive Major Medical
A benefit plan that combines major medical insurance with basic coverage.

Coordination of Benefits (COB)
A provision that helps decide which company pays expenses first when someone has two health insurance policies.

Co-pay
An agreement where the member pays a small amount to the provider and the insurance company pays the rest.

Covered Expenses
Health care expenses that qualify for payment by the insurance company.

Date of Service
The date the provider completed the service.

Dependant Coverage
Coverage for family members of the plan participant.

Diagnosis
Identification of a disease.

Drug Formulary
An approved list of drugs for which the insurance company will pay.

Eligibility Date
The date a person becomes eligible for insurance benefits.

Elimination Period
A probationary period before a person becomes eligible for insurance.

Enrollment Period
An open period of time where an employee can sign up for health insurance.

Explanation of Benefits
"Statement a participant receives describing services, amounts paid, and amount billed to patient."

Generic Drug
A drug that is the same as a name-brand drug but is made by a different company and is cheaper.

Group Health Insurance
A plan offered to businesses which allows employees to participate in an insurance plan at a cheaper cost than private insurance.

Health Insurance
Insurance against medical conditions and treatments.

Health Maintenance Organization (HMO)
A plan that requires participants to use HMO providers to treat medical conditions.

Identification Card
A card that identifies a person as a member of a health insurance plan.

Major Medical Insurance.
Insurance with high limits and deductibles. Usually for hospital services.

Managed Health Care Plan
A group of providers that contracts together to deliver lower cost service.

Maximum Out-of-Pocket Costs
Highest amount members pay out of their own bank account.

Medicaid
A medical benefits program run by the states and funded partially by the federal government.

Medically Necessary
Treatment that is absolutely necessary for health.

Member
A person that participates in a medical insurance plan.

Miscellaneous Expenses
Charges other than room and board.

National Health Insurance
A system that covers the health care needs for all residents of a country.

Office Visit
Services provided when a patient goes to their doctor's office.

Open Access
A plan that allows participants to use any desired provider.

Open Enrollment Period
A period when members can sign up dependants or can sign up for insurance themselves.

Out-of-Pocket Costs
"Amounts members have to pay from their own funds, like deductibles."

Out-of-Pocket Limit
The highest amount of coinsurance a member has to pay from their own funds.

Outpatient
Services provided to members that do not require a hospital stay.

Preferred Provider Organization (PPO)
"An organization of hospitals, health care providers, and physicians who offer special fees as part of a contract with the PPO."

Reasonable and Customary Charges
An average amount charged for a certain service by most providers in an area.

Self-funded Plan
When an employer pays the claims for employees instead of an insurance company.

Third Party Administrator
A company that specializes in processing claims for group insurance policies or businesses with self-funded plans.

Uniform Billing Code of 1992 (UB-92)
Federal mandate specifying how hospitals provide bills and itemizations of all services billed.

Insurance Quotes, Health Insurance, Life Insurance, Auto Insurance