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Common Insurance Terms
B
Benefit: Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.
C
Capitation: Capitation represents a set dollar limit that you or your employer pay to a health maintenance organization (HMO), regardless of how much you use (or don't use) the services offered by the health maintenance provider.
Carrier: The insurance company or HMO offering a health plan.
Claim: A request by an individual (or his or her provider) to an individual's insurance company for the insurance company to pay for services obtained from a health care professional.
Co-Insurance: Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called "co-payment."
Co-Payment: Co-payment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers.
COBRA: Federal legislation that lets you, if you work for an insured employer group of 20 or more employees, continue to purchase health insurance for up to 18 months if you lose your job or your employer-sponsored coverage is otherwise terminated.
D
Deductible: The amount an individual must pay for health care expenses before insurance (or a self-insured company) covers the costs.
Denial of Claim: Refusal by an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.
E
Effective Date: The date your insurance is to actually begin.
Explanation of Benefits: The insurance company's written explanation to a claim, showing what they paid and what the client must pay.
H
Health Maintenance Organizations (HMOs): Health Maintenance Organizations represent "pre-paid" or "capitated" insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service.
HIPAA: A Federal law passed in 1996 that allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships.
I
In-network: Providers or health care facilities which are part of a health plan's network of providers with which it has negotiated a discount.
Individual Health Insurance: Health insurance coverage on an individual, not group, basis.
L
Lifetime Maximum Benefit (or Maximum Lifetime Benefit): the maximum amount a health plan will pay in benefits to an insured individual during that individual's lifetime.
Limitations: a limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Certificate of Insurance.
Long-Term Care Policy: Insurance policies that cover specified services for a specified period of time
M
Maximum Dollar Limit: The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period.
N
Network: A group of doctors, hospitals and other health care providers contracted to provide services to insurance company’s customers for less than their usual fees.
O
Out-of-Plan (Out-of-Network): This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO
Out-Of-Pocket Maximum: A predetermined limited amount of money that an individual must pay out of their own savings, before an insurance company or (self-insured employer) will pay 100 percent for an individual's health care expenses.
Outpatient: An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility.
P
Pre-existing Conditions: A medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company.
Preferred Provider Organizations (PPOs): You or your employer receives discounted rates if you use doctors from a pre-selected group.
Primary Care Provider (PCP): A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs.
Private Health Insurance: Private health insurance – insurance plans marketed by the private health insurance industry – currently dominates the U.S. health care landscape, with approximately two-thirds of the non-elderly population covered by private health insurance.
Provider: Provider is a term used for health professionals who provide health care services.
R
Reasonable and Customary Fees: The average fee charged by a particular type of health care practitioner within a geographic area.
U
Usual, Customary and Reasonable (UCR) or Covered Expenses: An amount customarily charged for or covered for similar services and supplies which are medically necessary, recommended by a doctor, or required for treatment. |
