Glossary of Health Insurance Terminology
Access
A person's ability to obtain affordable medical care on a timely basis.
Accreditation
An evaluative process in which a healthcare organization undergoes an examination
of its operating procedures to determine whether the procedures meet designated
criteria as defined by the accrediting body, and to ensure that the organization
meets a specified level of quality.
Acquisition
The purchase of one organization by another organization.
Actuaries
The insurance professionals who perform the mathematical analysis necessary
for setting insurance premium rates.
Adjusted community rating (ACR)
A rating method under which a health plan or MCO divides its members into
classes or groups based on demographic factors such as geography, family composition,
and age, and then charges all members of a class or group the same premium.
The plan cannot consider the experience of a class, group, or tier in developing
premium rates. Also known as modified community rating or community rating
by class.
Behavioral healthcare
The provision of mental health and substance abuse services.
beneficence.6 An ethical principle which, when applied to managed care, states
that each member should be treated in a manner that respects his or her own
goals and values and that managed care organizations and their providers have
a duty to promote the good of the members as a group.
Benefit design
The process an MCO uses to determine which benefits or the level of benefits
that will be offered to its members, the degree to which members will be expected
to share the costs of such benefits, and how a member can access medical care
through the health plan.
Blended rating
For groups with limited recorded claim experience, a method of forecasting
a group's cost of benefits based partly on an MCO's manual rates and partly
on the group's experience.
Brand
A name, number, term, sign, symbol, design, or combination of these elements
that an organization uses to identify one or more products.
Broker
A salesperson who has obtained a state license to sell and service contracts
of multiple health plans or insurers, and who is ordinarily considered to
be an agent of the buyer, not the health plan or insurer.
Business integration
The unification of one or more separate business (nonclinical) functions into
a single function.
Cap
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.
Coinsurance
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.
Coordination of Benefits
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.
Co-payment
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.
COBRA
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.
Covered Expenses
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.
Deductible
The amount of money paid each year by the insured for medical care expenses
before an insurance policy starts paying.
Exclusions
Specific conditions or circumstances for which the policy will not provide
benefits.
Fee-for-Service
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.
Formulary
The list of preferred pharmaceutical products that is to be used by physicians
in a managed-care plan when they prescribe medication.
Generic Drug
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.
Health Maintenance Organization (HMO)
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.
Health Care Quality Improvement Act (HCQIA)
A federal act which exempts hospitals, group practices, and HMOs from certain
antitrust provisions as they apply to credentialing and peer review so long
as these entities adhere to due process standards that are outlined in the
Act.
Health Care Quality Improvement Program (HCQIP)
A program, established by the Balanced Budget Act of 1997, that seeks to improve
the quality of care provided to Medicare beneficiaries by requiring Medicare+Choice
coordinated care plans to undergo periodic quality review by a peer review
organization.
Health Insurance Portability and Accountability Act (HIPAA)
A federal act that protects people who change jobs, are self-employed, or
who have pre-existing medical conditions. HIPAA standardizes an approach to
the continuation of healthcare benefits for individuals and members of small
group health plans and establishes parity between the benefits extended to
these individuals and those benefits offered to employees in large group plans.
The act also contains provisions designed to ensure that prospective or current
enrollees in a group health plan are not discriminated against based on health
status.
Indemnity Plan
Traditional health insurance that usually covers a percentage of the cost
of care after the insured pays an annual deductible.
Insured
The person for whom a healthcare insurance policy is issued.
Managed Care
A healthcare system structured to manage costs, use and quality of healthcare
delivery. All HMOs and PPOs are managed-care systems.
Maximum Out-of-Pocket
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.
Point-of-Service (POS)
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.
Preferred Provider Organization (PPO)
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.
Pre-existing Condition
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.
Premium
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.
Primary Care Physician or Doctor
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.
Provider
Any person (doctor, nurse, dentist) or institution (hospital or clinic) that
provides medical care.
Short Term Health Insurance Plan
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.
Usual and Customary
(Also Usual and Regular) Agreed upon dollar amounts an insurance company will
pay for specific types of healthcare treatments.