Glossary

• ACA (Affordable Care Act): A federal law enacted in 2010 that aims to make health insurance more affordable and accessible. Also known as "Obamacare."

• Allowed Amount: The maximum amount an insurance company will pay for a covered service. If your provider charges more than the allowed amount, you may have to pay the difference.

• Annual Limit: A cap on the benefits your insurance company will pay in a year while you’re enrolled in a particular health insurance plan. After an annual limit is reached, you must pay all associated healthcare costs.

• Appeal: A request to your health insurer to review and change a decision it made regarding coverage for a specific service.

Balance Billing: When a provider bills you for the difference between what your insurance reimburses and what the provider charges.

Beneficiary: A person eligible to receive benefits under an insurance policy.

Benefits: The healthcare services or items covered under a health insurance plan.

Binder: A temporary insurance contract that provides coverage until a permanent policy is issued.

Broker: An individual or firm that represents the insured rather than the insurer, typically helping clients find and purchase the best available insurance policies.

Carrier: An insurance company that provides health insurance policies.

Catastrophic Health Plan: A health plan designed for emergency coverage with high deductibles and lower premiums.

CHAMPVA: A VA program that provides healthcare to the spouses and dependents of veterans who are permanently disabled or have died in service.

Claim: A request for payment submitted to your health insurer after receiving services.

Claim Adjuster: A representative of the insurance company who evaluates claims.

COBRA: A federal law allowing you to temporarily keep health insurance coverage after employment ends.

Coinsurance: The percentage of costs for a covered service you pay after paying your deductible.

Coordination of Benefits (COB): A process ensuring claims aren't paid multiple times when covered by more than one health insurance plan.

Copayment (Copay): A fixed amount you pay for a covered healthcare service.

Cost Sharing: The portion of costs covered by your insurance that you pay out-of-pocket.

Deductible: The amount you pay for covered services before your insurance begins to pay.

Dependent: A person relying on the policyholder for insurance coverage.

Dependent Coverage: Health insurance extended to an employee’s dependents.

Disability Insurance: Insurance providing income if an individual cannot work due to injury or illness.

Drug Formulary: A list of prescription drugs covered by a plan.

Effective Date: The date your health insurance coverage begins.

Elimination Period: The period between when a disability occurs and when benefits become payable.

Employee Assistance Program (EAP): A voluntary program providing work-related counseling services.

Employer Mandate: A requirement under the ACA for employers with 50+ employees to offer insurance.

Emergency Services: Evaluation and treatment for an emergency condition.

EOB (Explanation of Benefits): A statement from your insurer explaining what services were paid for on your behalf.

Essential Health Benefits: A set of 10 categories of services health insurance plans must cover under the ACA.

Exclusions: Specific conditions or circumstances for which insurance coverage is not provided.

Flexible Spending Account (FSA): A tax-advantaged account used to pay for qualified medical expenses.

Formulary: A list of prescription drugs covered by a health insurance plan.

Full-Time Employee: An employee working at least 30 hours per week, eligible for employer-sponsored health insurance.

Generic Drug: A drug equivalent to a brand-name product but usually sold at a lower cost.

Grandfathered Plan: A health plan that was in place before the ACA and has not made significant changes since.

Group Health Insurance: Health insurance coverage provided to a group, typically employees of a company.

Health Maintenance Organization (HMO): A health plan that limits coverage to in-network doctors.

Health Reimbursement Account (HRA): An employer-funded account reimbursing employees for medical expenses.

Health Savings Account (HSA): A tax-advantaged account paired with a high-deductible health plan.

High-Deductible Health Plan (HDHP): A plan with higher deductibles and often paired with HSAs.

In-Network Provider: A healthcare provider contracted with your insurance company.

Individual Mandate: A requirement under the ACA for individuals to have health insurance or pay a penalty (removed in 2019).

Insurance Navigator: A federally funded individual or organization trained to assist with health insurance options.

Insurance Premium: The amount paid for an insurance policy.

Insurance Rider: An additional provision to an insurance policy that adds or limits coverage.

Job-Based Health Plan: Health insurance that is offered to an employee (and often their family) through an employer. It’s also called group health insurance. 

Key Person Insurance: A life insurance policy a business purchases on a key executive’s life. The business is the beneficiary of the policy and receives the death benefit if the key person dies.

Knowledge-Based Authentication (KBA): A method used by insurance companies and other industries to verify an individual’s identity by asking them questions that should only be answerable by the person whose identity is being confirmed.

Level Premium: A premium that remains the same throughout the life of the insurance policy.

Lifetime Limit: A cap on the total lifetime benefits an insurer will pay.

Long-Term Care Insurance: Insurance covering services like nursing home care for individuals unable to perform daily activities.

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Loss Ratio: The ratio of claims paid by an insurance company to the premiums received. A lower loss ratio indicates better profitability for the insurer, while a higher loss ratio suggests more money is being spent on claims.

Maximum Out-of-Pocket (MOOP): The maximum amount you pay for covered services in a plan year before the insurer pays 100%.

Medicaid: A joint federal and state program assisting individuals with limited income.

Medicaid Expansion: ACA provision allowing states to expand Medicaid eligibility.

Medically Needy Medicaid: Medicaid category allowing individuals to qualify by spending down their income.

Medicare: A federal program for individuals aged 65+ and those with certain disabilities.

Medicare Advantage (Part C): Private Medicare plans providing Parts A and B benefits.

Medicare Part B Premium: The monthly premium for Part B medical insurance.

Medicare Supplement Insurance (Medigap): Private insurance covering costs not paid by Medicare.

Medical Underwriting: The process by which insurers evaluate risk based on medical history.

Medically Necessary: Services or supplies needed to diagnose or treat a condition.

Medicare Part D: A program helping cover prescription drug costs.

Medically Needy Medicaid: Medicaid category that helps people qualify by spending down their income.

Medicare Part A: Covers hospital stays and some home healthcare.

Medicare Part B: Covers outpatient care and preventive services.

Network: The facilities, providers, and suppliers contracted with your health insurer.

Non-Preferred Provider: A healthcare provider not contracted with your health insurer.

Open Enrollment Period: The period when you can sign up or change your health plan.

Out-of-Network Provider: A provider not contracted with your insurer, often costing more.

Out-of-Pocket Maximum: The most you pay for covered services in a year before insurance covers 100%.

PCP (Primary Care Physician): A healthcare provider who is your first point of contact for healthcare.

PPO (Preferred Provider Organization): A health plan offering more flexibility when choosing doctors and hospitals.

Preauthorization: Approval from your insurer before receiving certain healthcare services.

Premium: The amount you pay monthly for health insurance.

Preventive Services: Routine healthcare like checkups and screenings to prevent illness.

Qualifying Life Event (QLE): A change in your situation—like getting married, having a baby, or losing health coverage—that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside of the Open Enrollment Period.

Qualified Health Plan (QHP): A health insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing, and meets other requirements.

Reinsurance: Insurance purchased by an insurance company to protect against large losses.

Referral: A written order from your PCP for specialized services.

Special Enrollment Period (SEP): A time outside open enrollment when you can sign up for health insurance after a life event.

Subsidy: Financial assistance to help pay for health insurance through the ACA.

Service-Connected Disability: A condition acquired during military service that qualifies a veteran for VA benefits.

Term Life Insurance: Life insurance that provides coverage at a fixed rate for a limited period.

TRICARE: A healthcare program for military personnel, retirees, and dependents.

Third-Party Administrator (TPA): A company managing claims and services for a health plan.

Underwriting: The process an insurer uses to evaluate risk.

Urgent Care: Immediate care for a condition that requires prompt attention but is not life-threatening.

Utilization Review: The process by which insurers review the medical necessity and appropriateness of care provided to members to ensure cost-effectiveness. 

VA Healthcare: Comprehensive healthcare for U.S. veterans.

Variable Life Insurance: A type of life insurance that allows the policyholder to invest the cash value in various investment options such as stocks and bonds. 

Veterans Choice Program: A program allowing veterans to receive care from non-VA providers if VA services are unavailable.

Vision Insurance: A type of insurance that covers routine eye care, like eye exams and glasses or contact lenses. Vision insurance may also help cover the costs of eye surgery or other vision-related medical conditions.

Voluntary Benefits: Optional benefits that employees can choose to enroll in, usually offered through their employer, such as dental, vision, or supplemental life insurance.

Waiting Period: The time before benefits for certain conditions are eligible under a policy. 

XMOOP (Explanation of Maximum Out-of-Pocket): An acronym used to explain the out-of-pocket maximum an individual or family must pay in a policy year for covered healthcare services (an unusual but sometimes encountered term). 

Yearly Maximum: The maximum amount an insurance plan will pay for covered services in a year. After reaching this limit, policyholders may have to pay the remaining costs out-of-pocket.

Yield Curve: In the insurance context, this refers to a graph that shows the relationship between interest rates and the time to maturity of an insurance product, usually related to life insurance investments or pensions.

Zero Balance Claim: A claim where the insurance company has covered 100% of the allowed amount, leaving no remaining balance for the patient to pay. 

Medicaid: A joint federal and state program that helps with medical costs for individuals with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, like nursing home care and personal care services.

Medicaid Expansion: A provision under the ACA that allows states to expand Medicaid eligibility to individuals with incomes up to 138% of the federal poverty level.

CHIP (Children’s Health Insurance Program): A program administered by the U.S. Department of Health and Human Services that provides matching funds to states for health insurance to families with children. The program covers uninsured children in families with incomes that are modest but too high to qualify for Medicaid.

Medically Needy Medicaid: A category of Medicaid that allows individuals with high medical expenses to qualify for Medicaid even if their income exceeds the eligibility threshold by "spending down" their income.

• Part A (Hospital Insurance): Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home healthcare.

• Part B (Medical Insurance): Covers certain doctors' services, outpatient care, medical supplies, and preventive services.

• Part D (Prescription Drug Coverage): A program that helps cover the cost of prescription drugs, available to anyone who is eligible for Medicare.

• Medicare Part B Premium: The monthly premium you pay for Part B coverage (medical insurance). It is typically deducted from your Social Security benefits.

• Dual Eligibility: Individuals who qualify for both Medicare and Medicaid. These individuals are referred to as "dual-eligible" beneficiaries, and they can receive both Medicaid and Medicare benefits.

• Extra Help: A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance.

• PACE (Program of All-Inclusive Care for the Elderly): A Medicare and Medicaid program that helps people meet their healthcare needs in the community instead of going to a nursing home or other care facility.

VA (Veterans Affairs) Healthcare: A comprehensive healthcare system that provides services to U.S. veterans, including hospital and outpatient care.

• TRICARE: A healthcare program of the U.S. Department of Defense Military Health System that provides coverage to military personnel, retirees, and their dependents.

• CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs): A VA program that provides healthcare to the spouses and dependents of veterans who are permanently disabled or who have died in service.

• Service-Connected Disability: A condition that a veteran acquired during military service, for which they receive compensation from the VA. Veterans with service-connected disabilities are eligible for special healthcare benefits.

• Veterans Choice Program: A program that allows eligible veterans to receive care from a non-VA provider if they face long wait times or live far from a VA facility.