Health
Insurance Terms Made Easy
Glossary & Definitions Dictionary
 Agent:
individual who represents a company and is qualified to explain
the terms of the policies and to collect payment
Ambulatory Care: a facility that provides a wide
range of services which may include preventive care as well as laboratory
procedures
Beneficiary: the person receiving the payment
for claims. The beneficiary could be the insured himself, the doctor,
a hospital, or any person to whom payment is due for claims filed.
Benefit: amount an insurance company will pay
if you file a claim
Claim: the document created either electronically
or in print that tells the company you have had a covered injury
or illness
Class basis: a company justification for raising
your premium. They can increase your premium for no reason if they
can say that all policies similar to yours had the same increase.
COBRA: a federal law which allows you to retain
your group coverage on an individual basis for a limited time period
after losing your group coverage
Co-insurance: a percentage of the medical bill
that you must pay, such as 20% of the approved amount. Your insurance
pays 80% of the approved amount and any amount not approved has
to be discounted. Different companies have different co-insurance
arrangements.
Contest: to object to a company's decision to
deny or pay less on a claim than the client believes to be covered
Copayment: a flat amount that you pay when you
go to a doctor or hospital. Does not apply until after you have
paid your deductible
Covered expenses: hospital, physician, outpatient or any other type
of care for which your company will pay providing it is not for
a condition expressly excluded.
Covered person: the person for whom the policy
will pay benefits
Deductible: the portion of a medical bill you have to pay before
your insurance starts paying. A higher deductible results in a lower
premium.
Effective Date: the date after which the policy
will pay for claims
EOB: explanation of benefits form sent to you
after a claim has been filed. It will tell you how much the insurance
will pay and what you will still owe the caregiver
Exclusions: conditions for which your company
will not pay
Formulary: a list of drugs included in the drug
coverage portion of your insurance plan. You usually have to pay
a copayment for each medication.
Generic: a medication that is the generic equivalent
of a brand named drug. A copayment will usually be much less of
a generic drug is available and accepted.
Grace period: not to be confused with "waiting
period," the grace period is a period of time during which
your policy will be continued if your payment is late—usually 30
days.
Hospital: a legally constituted institution with
facilities for care and treatment of sick or injured persons on
a resident or inpatient basis
HSA: health savings accounts, also known as medical
savings account. Allows you to put a portion of pre-tax earnings
into a special type of IRA which you can then use tax free to pay
for deductibles, copays, medication or any other health related
expense that is not covered by your insurance.
Indemnify: to insure or provide a benefit according
to the terms of the policy
Injury:
accidental bodily injury resulting from an accident
Insurability:
a condition of being "insurable"; that is, required medical conditions
of the person to be insured meet the criteria of the company providing
the insurance. Persons with certain medical conditions such as "congestive
heart failure" would be considered "uninsurable."
Insured:
the person for whom the policy will pay benefits, also called "covered
person" in some policies
Life Time Aggregate:
the amount of benefit your insurance would pay during your lifetime
Loss:
a condition of illness or injury for which you would suffer "loss,"
that is, have to pay out of your pocket, if you did not have insurance
Medical Underwriting:
the evaluation of health questions to determine if a client is insurable
under the terms of the plan or company
Office visit:
the visit that you make to your doctor's office for any reason
Omissions:
information you forget or neglect to tell the company when you take
the policy. If discovered, it gives them grounds to cancel the policy.
Out of Pocket
Maximum: an dollar amount beyond which you will have increased
or 100% coverage for covered expenses if you reach it. Does not
include expenses that are not covered
Out of Pocket:
the money you have to pay for care in addition to your premium
Outpatient:
care provided in the outpatient facilities of a hospital
Physician:
any person who is legally qualified and licensed as a practitioner,
practicing within the scope of his or her authority and license
Policy Year:
each successive, 12 month period extending from the effective date
of the policy and continuing for 12 consecutive months
Pre-existing:
a condition you had prior to taking the policy
Premium:
monthly payment you make for having insurance
Reinstatement:
to place a lapsed policy back in force. Often requires proof of
insurability
Renewable:
you can renew your policy each year and cannot be terminated for
having to use it. You can, however, be charged a higher premium
every year.
Rider:
an attachment to the basic policy which requires additional premium
and is not included in the policy itself. For example, dental or
vision care
Risk:
the likelihood that the company will have to spend more on a person's
care than they can recoup through that person's premium. Insurance
laws allow a company to refuse high risk clients.
Routine:
examinations or treatment for the maintenance of a chronic condition
that is not expected to improve, or conducted for the purpose of
affirming wellness. Routine exams are frequently not covered.
Sickness:
illness or disease manifested after the policy has been placed in
effect
Symptoms:
conditions indicating the presence of a disease or illness
Termination:
date after which the policy is no longer in effect
Waiting period:
a period of time during which your company will not pay for a pre-existing
condition
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