A method of paying medical providers through a pre-paid, flat monthly fee for each covered
person. The payment is independent of the number of services received or the costs incurred
by a provider in furnishing those services.
The Consolidated Omnibus Budget Reconciliation Act 1985, commonly known as COBRA, requires
group health plans with 20 or more employees to offer continued health coverage for you
and your dependents for 18 months after you leave your job. Longer durations of continuance
are available under certain circumstances. If you opt to continue coverage, you must
pay the entire premium, plus a two percent administration charge.
The amount you are required to pay for medical care in fee-for-service plan or preferred
provider organization (PPO) after you have met your deductible. The coinsurance rate
is usually expressed as a percentage of billed charges. For example, if the insurance
company pays 80 percent of the claim, you pay 20 percent.
A cost sharing arrangement in which a person pays a specific charge for a specific medical
service -- say $20 for an office visit or $10 for a prescription.
The amount of money you must pay upfront each year to cover your medical care expenses
before your insurance policy starts paying.
Specific conditions or circumstances for which the policy will not provide benefits.
A payment system for health care where the provider is paid for each service rendered.
Health Maintenance Organization (HMO)
Prepaid health plans in which you pay a monthly premium and the HMO covers your office
visits, hospital stays, emergency care, surgery, preventive care, checkups, lab tests,
X-rays, and therapy. You will pay a pre-determined copayment amount for each service (e.g., $20 for an office visit or $50 for an emergency room visit).
You must choose a primary care physician who coordinates all of
your care and makes referrals to any specialists you might need. In an HMO, you must
use the doctors, hospitals and clinics that participate in your plan's network.
Health Savings Accounts (HSA)
An HSA works like an IRA, except that money is used to pay health care costs. Participants
enroll in a relatively inexpensive high deductible insurance plan. Then, a tax-deductible
savings account may be opened to cover current and future medical expenses. The money
deposited, as well as the earnings, is not currently taxed. The money can then be withdrawn
to cover qualified medical expenses tax-free. Unused balances roll over from year to
year, even into retirement.
A cap on the benefits paid under a policy. Many policies have a lifetime limit of $5
million, which means that the insurer agrees to cover up to $5 million in covered services
over the life of the policy.
An organized way to manage costs, use, and quality of the health care system. The major
types of managed care plans are health maintenance organizations (HMOs), point-of-service
(POS) plans and preferred provider organizations (PPO).
A joint federal-state health insurance program that is run by the states and covers
certain low-income people (especially children and pregnant women), and disabled people.
The federally sponsored health insurance program of hospital and medical insurance primarily
for people age 65 and over.
The most money you will be required to pay in a year for deductibles and coinsurance for covered expenses.
It is a stated dollar amount set by the insurance company, in addition to regular premiums.
Point-of-Service (POS) Plan
A type of managed care plan combining features of health maintenance organizations (HMOs)
and preferred provider organizations (PPOs), into a single plan, in which individuals decide at the time of service whether to go
to an HMO provider and pay a flat dollar copayment (e.g. $20 per visit), a PPO provider (e.g. 20% coinsurance after a deductible)
or to an out-of-network provider at a higher coinsurance cost.
The ability for an individual to transfer from one health insurer to another health
insurer with regard to pre-existing conditions or other risk factors.
A cost containment feature of many group medical policies whereby the insured must contact
the insurer prior to a hospitalization or surgery and receive authorization for the service.
A health problem that existed before the date your insurance became effective. Many
insurance plans will not cover preexisting conditions. Some will cover them only after
a waiting period.
Preferred Provider Organization (PPO)
A network of health care providers with which a health insurer has negotiated contracts
for its insured population to receive health services at discounted costs. Health care
decisions generally remain with the patient as he or she selects providers and determines
his or her own need for services. Patients have financial incentives to select providers
within the PPO network.
The amount you or your employer pays in exchange for insurance coverage.
Primary Care Physician
Under a health maintenance organization (HMO) or point-of-service (POS) plan, usually
your first contact for health care. This is often a family physician, internist, or pediatrician.
A primary care physician monitors your health, treats most health problems, and refers
you to specialists if necessary.
Any person (doctor or nurse) or institution (hospital, clinic, or laboratory) that provides
Self Directed Health Plan (SDHP)
A health insurance plan, usually a PPO, which provides "up-front" cash (e.g., $250 each calendar quarter) to pay for certain
medical expenses before the deductible, coinsurance or copays are required. The usual list of expenses eligible for up-front
cash payments includes preventative care (e.g., checkups and immunizations), routine care (e.g., office visits and simple blood
tests) and some prescriptions. In some SDHPs, up-front cash that is not paid out in the allotted timeframe is rolled forwarded
and added to the amount in subsequent periods.
Any payer of health care services other than you. This can be an insurance company,
an HMO, a PPO, or the federal government.
Usual and Customary Charge
The amount a health plan will recognize for payment for a particular medical procedure.
It is typically based on what is considered "reasonable" for that procedure
in your service area.
A cost control mechanism by which the appropriateness, necessity, and quality of health
care services are monitored by both insurers and employers.