Glossary of Terms
Health insurance and payment can be complicated matters. Many of the terms used are unfamiliar, which can cause confusion and stress for patients and their families. Here we offer a glossary of common health insurance terminology.
If you need a more complete glossary of Health Insurance terms, click here.
Co-Insurance
Co-Insurance and/or co-pay is a form of cost sharing. After deductible are met, the plan will begin paying a percentage of the insured’s bill. The remaining amount, known as the co-insurance, is the portion due by the patient and/or insured. Managed care carriers charge co-pays for varied services. For Example: Emergency room visit, specialist, physical therapy and mental health services.
Deductible
Deductibles are provisions that require the member to accumulate a specific (dollar) amount of medical bills before any benefits are paid. Once the patient/insured has met their deductible, the insurance carrier usually pays a percentage of the bills, as defined by your certificate of insurance. The patient is liable for the unpaid percentage. Deductibles are usually annual, and generally start in January.
Explanation of Benefits (EOB)
A statement sent to the member of a health insurance plan for the purpose of explaining how benefits have been applied to a claim.
HMO - Health Maintenance Organization
A managed health care system that provides comprehensive medical services and responsibility for the delivery of such services in exchange for a fixed, pre-paid fee. An HMO covers care administered by medical professionals who are in their 'network', meaning that they have agreed to treat patients in a manner consistent with the HMO's guidelines.
Network
Hospitals, physicians or other health care providers who participate in your health plan. Typically, insurance companies reimburse their members at a higher percentage for services billed by "in-network" providers.
Out-of-Network
Hospitals, physicians or other health care providers who do not participate in your health plan may be referred to as “out of network”. You may have a higher co-insurance and/or co-pay for out-of-network services. In some cases out-of-network services are denied totally.
Pre-Existing Conditions
A medical condition that is not covered by an insurance plan because it was perceived to be present in the individual before the purchase of the health insurance policy.
PPO - Preferred Provider Organization
This is a managed care system consisting of physicians, hospitals and other health care professionals who administer medical services through an insurance provider or third party to provide services at reduced rates. With a PPO, the insured individuals pay as they go for medical services, rather than a fixed, pre-paid fee. With a PPO plan, individuals receive reduced costs for medical services received in the network, but have the option to pay more if they choose to see a medical professional who is out of the PPO network.
Referral
Most HMO plans require authorization for a patient to seek treatment from someone from his/her primary physician. This authorization form is referred to as a referral.