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| Glossary: Health
Insurance Terms |
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Cap |
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The
maximum amount an insured person will
pay for covered medical bills in any
one year. A cap is reached when
out-of-pocket expenses, including the
annual deductible and coinsurance
payments, total a specific amount
stated in the insurance policy. |
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Coinsurance |
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The
amount the insured is required to pay
for medical care in a plan after the
annual deductible has been met.
Coinsurance rate is usually expressed
as a percentage. For example, the
insurance company may pay 80% of the
covered claim, and the insured pays
the remaining 20%. This would be
called 80/20. |
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Coordination
of Benefits |
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A
system to eliminate duplication of
benefits when a person is covered
under more than one group health
insurance plan. Benefits under the two
plans usually are limited to no more
than 100% of the claim. |
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Co-payment |
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A
flat fee paid when medical service is
received. Co-payments are generally
paid by people insured in managed care
insurance plans. For example, $10 for
every visit to the doctor, or $5 for
every filled prescription. |
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COBRA |
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COBRA
stands for Consolidated Omnibus Budget
Reconciliation Act. This federal law
passed in 1985, made it possible for
workers and their covered spouses and
children to remain on a former
employer’s healthcare plan for a set
period of time. |
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Covered
Expenses |
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Costs
covered by a health plan for covered
services, which are medical procedures
the insurer agrees to pay for as
listed in the insurance policy. Most
insurance plans do not pay for all
services. For example, some may not
pay for mental health services or
certain medications. |
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Deductible |
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The
amount of money paid each year by the
insured for medical care expenses
before an insurance policy starts
paying. |
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Exclusions |
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Specific
conditions or circumstances for which
the policy will not provide benefits. |
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Fee-for-Service |
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A
payment system for healthcare in which
the caregiver is paid for each service
provided rather than a pre-negotiated
amount for each insured patient. |
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Formulary |
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The
list of preferred pharmaceutical
products that is to be used by
physicians in a managed-care plan when
they prescribe medication. |
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Generic
Drug |
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A
drug which is the same as a brand name
drug and which is allowed to be
produced after the brand name drug’s
patent has expired. |
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Health
Maintenance Organization (HMO) |
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Health
Maintenance Organizations are prepaid
health plans. The insured pays a
monthly premium and the HMO covers
services such as doctors' visits,
hospital stays, emergency care,
surgery, checkups, lab tests and
x-rays, and therapy. Doctors and
hospitals are designated by the HMO. |
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Indemnity
Plan |
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Traditional
health insurance that usually covers a
percentage of the cost of care after
the insured pays an annual deductible. |
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Insured |
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The
person for whom a healthcare insurance
policy is issued. |
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Managed
Care |
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A
healthcare system structured to manage
costs, use and quality of healthcare
delivery. All HMOs and PPOs are
managed-care systems. |
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Maximum
Out-of-Pocket |
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The
most money an individual is required
to pay per year for deductibles and
coinsurance. It is a stated dollar
amount set by the insurance company.
Regular premiums are not included in
this amount. |
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Point-of-Service
(POS) |
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A
type of managed-care plan that
combines features of health
maintenance organizations (HMOs) and
preferred provider organizations
(PPOs). Most POS plans enable the
insured to decide whether to go to a
doctor contracted with the plan and
pay a flat dollar copayment, or go to
a doctor not contracted with the plan
and pay an annual deductible and
coinsurance. |
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Preferred
Provider Organization (PPO) |
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A
combination of traditional
fee-for-service and an HMO. When
doctors and hospitals used are part of
the PPO, the insurer covers a larger
part of medical bills. Using other
doctors is allowed, but results in
higher costs for the insured. |
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Pre-existing
Condition |
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A
health problem that existed or for
which the insured received treatment
before the date healthcare insurance
became effective. Most healthcare
insurance policies have clauses that
describe under what circumstances
medical expenses related to
pre-existing condition will be covered
by the plan. |
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Premium |
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The
payment, or regular periodic payments,
that a policyholder makes to own an
insurance policy. Healthcare plan
premiums are often expressed as a
monthly premium payment. |
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Primary
Care Physician or Doctor |
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Usually,
the first contact for healthcare.
Often, this is a family physician or
internist, but some women use their
gynecologist. A primary care doctor
monitors health and diagnoses and
treats minor health problems, then may
refer individuals to specialists if
another level of care is needed. |
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Provider |
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Any
person (doctor, nurse, dentist) or
institution (hospital or clinic) that
provides medical care. |
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Short
Term Health Insurance Plan |
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Short-term
healthcare plans are sometimes called
temporary health insurance. These
plans offer very basic healthcare
coverage and are specifically designed
to cover you for the short time
periods during which you have no other
health insurance. |
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Usual
and Customary |
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(Also
Usual and Regular) Agreed upon dollar
amounts an insurance company will pay
for specific types of healthcare
treatments. |
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policy
- Long Term Consumer Care,
Inc.
- N27 W23960 Paul Road Suite
201 ~ Pewaukee, WI 53072
- Toll Free:
1.800.544.9505 Fax: 1-262.523-1910
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LTCC
is a trademark of Long Term Consumer Care, Inc. All
other products mentioned are registered trademarks of their
respective companies. LTCC, Inc. is a licensed health
insurance agency and only accepts business from appointed
agents.
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