Glossary of Health Insurance Terms

A

• Affordable Care Act (ACA): A healthcare reform law passed in 2010 aimed at expanding access to insurance, improving quality, and reducing healthcare costs.

• Annual Limit: The maximum amount a health plan will pay for covered services in a year. Under the ACA, annual limits on essential health benefits are prohibited.

B

• Beneficiary: The person who is covered by the health insurance plan.

• Balance Billing: When a provider bills you for the difference between what your insurance pays and the provider’s charge.

C

• Coinsurance: The percentage of costs you pay after meeting your deductible. For example, in an 80/20 plan, the insurer pays 80%, and you pay 20%.

• Copayment (Copay): A fixed amount you pay for specific services, such as $20 for a doctor’s visit.

• Coverage: The range of medical services your health plan pays for.

D

• Deductible: The amount you pay out-of-pocket before your insurance starts to cover services.

• Dependent: A person, such as a spouse or child, who is covered under your insurance plan.

E

• Emergency Services: Immediate medical care required for a sudden and serious condition. Covered regardless of whether the provider is in your network.

• Essential Health Benefits: A set of 10 healthcare services (e.g., hospitalization, maternity care) that must be covered by all ACA-compliant plans.

• Exclusive Provider Organization (EPO): A type of plan that covers services only if you use in-network providers, except in emergencies.

F

• Formulary: A list of prescription drugs covered by your insurance plan.

H

• Health Maintenance Organization (HMO): A plan requiring you to use network providers and get referrals for specialists.

• High-Deductible Health Plan (HDHP): A plan with a higher deductible and lower premiums, often paired with a Health Savings Account (HSA).

I

• In-Network Provider: A doctor, hospital, or other healthcare provider contracted with your insurance company to provide services at discounted rates.

• Insurance Premium: The monthly amount you pay to keep your health insurance policy active.

M

• Maximum Out-of-Pocket Limit: The most you’ll pay in a year for covered services. Once reached, the insurer pays 100% of covered expenses.

N

• Network: A group of doctors, hospitals, and other providers your insurance plan has contracted with for services.

O

• Out-of-Network Provider: A healthcare provider not contracted with your insurance company. Costs are often higher for out-of-network care.

• Out-of-Pocket Costs: Expenses you pay directly, including deductibles, copays, and coinsurance.

P

• Point of Service (POS): A hybrid plan requiring a referral to see a specialist but offering some out-of-network coverage.

• Preferred Provider Organization (PPO): A plan offering flexibility to see any doctor without referrals and out-of-network coverage at higher costs.

• Preauthorization: Approval from your insurer before receiving certain medical services to ensure coverage.

• Preventive Care: Services like screenings, vaccines, and check-ups designed to prevent illness, often covered at no cost under the ACA.

S

• Specialist: A doctor focusing on a specific area of medicine, such as cardiology or dermatology.

• Summary of Benefits and Coverage (SBC): A document outlining your plan’s coverage, costs, and benefits.

T

• Tiered Network: A system categorizing providers into levels based on cost or quality, affecting how much you pay for services.

U

• Urgent Care: Medical care for conditions that require attention but are not emergencies.

W

• Waiting Period: The time before your coverage starts.

• Wellness Programs: Initiatives promoting healthy behaviors, often offering rewards like discounts or gym memberships.