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Question 1 of 1 in Glossary Of Health Insurance Words And Phases |
Glossary of health insurance words and phrases |
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Actual charge: the charge(s) for a particular service/treatment
by a health care provider
Alternative medicine: some medical techniques once considered
outside the boundaries of standard practice have become more accepted in
recent years and may now be eligible for coverage. Acupuncture, midwives,
and osteopathic treatments are examples of formerly excluded treatments
that are now covered under many health insurance policies.
Annual limits: are maximums on the dollar amounts the plan
will pay for any given year
Approved charge: the dollar amount on which your insurer
bases its payments and your co-payments.
Assignments of benefits: the insured allows a hospital or
doctor to collect your health insurance benefits directly from your insurance
company.
Associated group plans: fully insured plans issued to employee
groups, including those formed by labor unions, nonprofit membership corporations,
etc.
Beneficiary: the recipient of the benefits of the policy
Benefit maximum: the most a policy pays for a specified loss
or covered service. This can be expressed as either a period of time, a
dollar amount, or a percentage of the approved amount.
Benefit period: the time period for which payments for benefits
of an insurance policy are available.
Capitation to providers: a system where an HMO pays a doctor
or hospital a flat monthly fee for the care of each health plan member,
whether or not any services are delivered.
Chronic condition: prolonged conditions or illness, such
as asthma, diabetes, etc.
Claim: a request from the insured to the insurance company
for payment
Closed practice: a primary care physician that is not accepting
new patients.
COBRA: a Federal law that gives the right to workers to continue
group health care coverage for a specified period for themselves if the
worker loses coverage because of reduced work hours or loses the job.
Conditionally renewable: an insurance policy that the company
will renew with each premium payment, as long as you meet certain conditions.
Conversion privileges: group plans generally have a conversion
privilege that allows an employee to covert to an individual health insurance
plan upon termination of employment. Alternatively, coverage under a COBRA
plan may be available.
Co-insurance: is the share of the covered charges, usually
a percentage, that the insured and plan each pay. If the plan has a deductible,
the coinsurance is applied after the deductible has been satisfied. For
example, if the insured has bills amounting to $400 and the plan has a
$100 deductible amount, the insured is responsible for paying the first
$100 and the insurer will begin paying after that. But because of the coinsurance,
the company will pay only a percentage of the covered expenses and the
insured must pay the remaining percentage. Between the two of them, they
will pay 100%. So, in our example, if the plan pays 80% of the $300 remaining
after the deductible, the insurer will pay $240 (80% of $300) and the insured
will pay $60 (20% of $300).
Coordination of benefits (COB): When the insured is covered
under more than one plan (for example under a group plan at work, and as
a family member on a spouse’s plan) the benefits from the plans are
coordinated so as to limit the total benefits from all plans. Usually,
the benefits from all plans will not exceed 100% of the covered medical
expenses.
Covered dependents: traditionally, under group health insurance
plans dependent coverage was only available for spouses and children. More
recently, reflecting the changing lifestyles of Americans, some groups
have also begun covering domestic partners of homosexuals and lesbians,
children of divorced parents, and dependent parents of employees. Also,
common law marriages have been recognized by some plans because they need
to be in compliance with legal requirements.
Co-Pay: are fixed dollar payments that the insured must pay
directly to the provider at the time services are received. For example,
the contract for a certain network of doctors may require that patients
pay a $10 co-pay each time they visit one of the doctors who is a member
of that network. Or, the insured may have to pay $10 for each pharmacy
prescription filled.
Covered services and supplies: Usually, the insured will
receive a booklet that describes the services and supplies that are covered
and reimbursable under the plan. This booklet will probably also describe
the types of services and supplies that are not covered and reimbursable
under the plan.
Covered services generally include the professional services
of standard medical practitioners such as doctors, nurses, and midwives.
Other types of care providers may also be covered under the plan.
For a hospital plan, covered services would probably include
confinement in hospitals and possibly other facilities such as hospices,
rehabilitation centers and nursing homes.
Covered supplies refers to certain medical equipment and
supplies that may be medically necessary for treatment and therefore are
covered under the terms of the plan. For example, the plan might include
coverage for such items as prescription drugs, diabetic supplies, walkers,
crutches and other items of this nature.
The specifics of what items are covered vary from plan to
plan. Also, such details of coverage as dollar limitations and deductibles
and coinsurance percentages vary. So you need to check your own plan to
determine exactly what is covered, and what is not, as well as exactly
how much the plan will pay for covered services and supplies.
Deductible: is the amount the insured is required to pay
before the insurer begins paying benefits. For example, if the insured
has bills amounting to $400 and the plan has a $100 deductible amount,
the insured is responsible for paying the first $100 and the insurer will
begin paying after that. Higher deductible, lower the premium.
Discount fees for service to providers: HMOs contract with
health providers to provide services at discounted rates.
Elimination period: the number of days of care that you pay
before your insurance plan picks up the benefits.
Enrollment period: the period during which individuals may
enroll for an insurance policy, Medicare, HMO benefits.
ERISA: Employee Retirement Income Security Act, a federal
law that regulates employer-sponsored pension and insurance plans for employees.
Evidence of insurability: proof that you’re in good
health
Exclusions: conditions or procedures that are not covered.
Every health care plan has its own list of exclusions and limitations.
Some of the more common ones are experimental medications/treatments/procedures,
sickness or injury as a result of war, attempted suicide, cosmetic surgery,
etc.
Experimental and investigational procedures: health insurance
coverage generally excludes medical treatments that are deemed to be unproven,
ineffective, or non-standard. This includes surgical techniques and medicines
not approved by the Food and Drug Administration. Sometimes such treatments
may be available by traveling to another country, but these treatments
would generally not be covered.
Explanation of benefits (EOB): the insurance company’s
explanation of its decision regarding your claim.
Fee for service: a health plan that allows you, as the patient,
to use any doctors you want, but requires you pay for the services yourself
and file (or your provider files) claims for reimbursement.
Free look: the period during which you may reconsider the
purchase of an insurance policy, cancel, and get a full refund. The clock
starts running the day you receive the policy. Check your state’s
insurance law for the specific provisions that apply in your state.
Gatekeeper: a term applied to a primary care physician
Grace period: a specified period of time after a premium
is due during which you can still make a payment without losing the insurance.
Check your policy to be sure what it provides.
Grievance procedure: the required appeal process an HMO/insurance
company provides to protest a decision regarding a claim payment
Guarantee issue: an insurance policy that is issued to anyone,
regardless of prior medical history.
Guaranteed renewable: an agreement by an insurance company
to insure a person for as long as premiums are paid.
Health care reimbursement accounts: accounts that allow you
to set aside pre-tax dollars to pay for medical care or costs
HIPAA: Health Insurance Portability & Accountability
Act, a federal law that guarantees health care plan eligibility for people
who change jobs, if the new employer offers group insurance.
HMO (Health Maintenance Organizations): provide health services
through a network of hospitals, doctors, laboratories, and so forth.
Hospital indemnity policy: pays a fixed dollar amount for
each day you are hospitalized, regardless of the actual costs.
Hospital pre-certification: managed care plans often require
prior approval before the insured enters the hospital. In the case of an
emergency, or other situation where pre-certification is not possible,
such plans often require prompt notification – often in 48 hours
after admission.
Individual practice associations (IPAs): a network of individual
practitioners who have entered into contracts (generally an HMO) to provide
medical services to enrolled members. Visits take place in the doctor's
office.
Insured: an individual or organization protected by an insurance
plan
Lifetime maximum: is the total dollar amount the plan will
pay for all types of medical expenses, for all benefit periods, while the
insured person is alive and covered under the plan.
Limitations: the conditions or circumstances for which benefits
are not payable or are limited.
Loss: the basis for a claim under an insurance policy.
Loss ratio: the dollar amount an insurer pays in claims compared
to the amount it collects in premiums.
Managed health care plans: a system that organizes a network
of doctors, hospitals, and other providers to provide comprehensive health
services to their members at lower costs.
Mandated benefits: health care benefits that state or federal
law says must be include din health care plans.
Medically necessary: a provision in a health care insurance
policy that excludes coverage for treatment that is not “medically
necessary”. This term may be defined differently from one health
care plan to another.
Medical Savings Account (MSA): an account held in trust for
the account holder. The employer or employee makes annual tax-free contributions
to the account that must be maintained in conjunction with a high deductible
health insurance policy.
Multiple employer plans: benefit plans that serve employees
of more than one employer and are set up under collective bargaining agreements.
Multiple Employer Welfare Arrangements (MEWA): a type of
employee association plan that provides benefits to employees of more than
one employer.
Network: all physicians, specialists, hospitals and other
health care providers who agree to provide medical care to HMO/PPO members
under the terms of a contract.
Open enrollment: a specified period of time when new subscribers
may enroll in a health insurance plan or HMO regardless of their health.
Out-of-pocket limit: is a dollar limit on the portion of
covered medical expenses that the insured must pay during a benefit period
(usually a calendar year). When the out of pocket limit is met, the insured
will not have to pay further deductibles or coinsurance for that year.
To illustrate, say the out of pocket is $1000 per calendar year and the
insured’s coinsurance is 20%. When $5000 of covered medical expenses
have been incurred, the $1000 out of pocket limit will be met ($5000 at
20%). Thereafter, the plan will pay benefits at 100% and the insured’s
portion will be $0 for the remainder of that year.
Outpatient services: services usually provided in clinics,
physician or provider officers, ambulatory surgical centers, hospices,
home health services, and so forth.
Physical examination: physical examination, as well as information
about your medical history, may be required to qualify for health insurance.
The requirements will vary for individual or group coverage, for different
insurance companies, and for very large or very small groups.
Point-of-service (POS) plans: these plans allow members the
option of using services outside the HMO network without prior approval
Portability: under HIPAA, workers with pre-existing medical
conditions must receive credit for time in a previous health plan if they
join an employer plan
Pre-certification: a requirement that you notify the insurance
company for its approval before you check into a hospital, have elective
surgery, visit specialists, have expensive tests (e.g., MRI). Pre-certification
does not guarantee the insurance company will pay the medical bills. Also
called “utilization review”.
Pre-existing condition: health problem/condition/illness
you had prior to applying for insurance and for which you received medical
advice, diagnosis, care or treatment. Policies can exclude coverage of
any medical condition for a period of time.
Preferred Provider Organization (PPO): a network of doctors,
hospitals, and suppliers (preferred providers) who agree to provide services
to members of a health plan for discounted fees.
Premium: the amount you pay each year for insurance coverage
Primary care physician (gatekeeper): the physician selected
by HMO members who serves as a personal doctor and provides all medical
treatments and any referrals to medical specialists.
Primary plan: this is the plan that pays first when you are
covered by more than one insurance plan
Prior qualifying coverage: health plan coverage that was
in effect before the effective date of the current or new coverage
Provider: a doctor, hospital, x-ray company, pharmacy, etc.
that provides medical health care services
Reasonable and customary fees: when a doctor or other provider
of medical services submits a bill, the insurer will make an evaluation
of whether the charges are reasonable and customary for that medical service
provider and for the type of service performed. What is reasonable and
customary depends on factors such as the specific medical service provided,
the qualifications and skill level of the doctor (or other care provider),
the geographic area (fees can vary widely in different areas) and anything
else that the insurer may consider to be pertinent to the evaluation. Companies
maintain large computerized databases of information and sophisticated
computer programs to determine what is reasonable and customary in a specific
situation.
Reinstatement: policies which have lapsed can usually be
reinstated by paying the past due premiums and giving appropriate evidence
of insurability.
Renewability: group health insurance plans are normally 1
year term. Insurers generally review the claims experience of the group
at each renewal date and make a renewal offer – often at a different
premium. The company then decides whether to accept the renewal offer.
Individual policies are renewed periodically (as specified
in the policy). Premiums for individual health insurance plans are adjusted
based on the experience of all similar individual health insurance plans
issued by the insurance company. Details of renewability are spelled out
in the policy.
Rider: a legal document that modifies an insurance policy
Second surgical opinion: If surgery is recommended, the insurance
company may require, or in some cases the insured may request, a review
of the case by a second surgeon. If a second opinion is deemed warranted
the insurer would pay a second surgeon to review the case and concur with
the first doctor or suggest an alternative treatment.
Secondary plan: applies only when you have more than one
health insurance plan. The second plan pays only after the primary plan
has processed the claim.
Self-insured plan: an organization that pays health care
costs out of the organization’s own pocket
Specific disease policy: a plan that covers expenses only
for a specific disease identified in the policy. Also called Dread Disease
policy.
Spell of illness provision: spell of illness usually refers
to a period of time during which a patient is being treated for a particular
incidence of an illness. Some companies use the terminology “per
cause” rather than “spell of illness.” The exact definition
can also vary from plan to plan. Here is one example of how it might work:
If a patient is confined in a hospital for 5 days for a specific condition,
the spell of illness is 5 days. If the confinement continues for an additional
7 days because of another non-related condition, that might be considered
to be another 7 day spell of illness. On the other hand, if the total confinement
of 12 days (5 days plus 7 days) results from the initial condition or a
related condition -- hospital plans usually have lists of conditions that
are considered closely related and so constitute a single spell of illness
-- the entire confinement might be considered to be one spell of illness
lasting 12 days.
Spell of illness is more commonly associated with disability
insurance than health insurance, but it sometimes comes into play in health
insurance as a limitation on what will be covered. For instance, in the
above example, there might be a limitation of 10 days hospital confinement
per spell of illness, where spell of illness is defined as being for only
one condition. Therefore, the plan would pay for the entire 12 days where
the confinements are for non-related conditions (5 days for one spell of
illness and 7 days for the other spell of illness). But if the entire 12
days is only for one condition, then benefits might be limited to covering
only 10 days confinement.
Stop-loss clause: the clause in the contract between the
insurer and the insured that specifies the maximum payment that will be
made for particular types of coverages – for example the total payments
for psychiatric coverage or surgery may be limited to some maximum dollar
amount. Sometimes the term stop-loss is also used to refer to an arrangement
of risk management where the risk is shared among several insurance companies.
Third party administrator: they administer employee benefit
plans under contract with insurance companies, HMOs and self-funded plans.
Underwriting: the process by which an insurer establishes
and assumes risks.
Usual, customary & reasonable (UCR): the dollar amount
the insurance companies believe to be a fair price for the medical service/procedure
in a specific geographic area. Companies have developed their own UCR,
which often do not reflect the doctor’s actual bill. If the doctor’s
chargers are higher than the companies UCR charge, you generally have to
pay the balance.
Utilization review services: a process that reviews, on a
case-by-case basis, the utilization, appropriateness, or quality of medical
services provided to a person. Examples of utilization review are pre-hospital
admission, pre-inpatient certification, second opinions, etc.
Waiting period: has two meanings: (1) the time period you
must wait before you can get health insurance from a new employer; and
(2) the time that must pass after becoming insured before the policy will
begin to pay benefits for a pre-existing condition or specified illness.
Waiver: an amendment to a policy that excludes coverage for
certain medical conditions.
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