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Deductible, copay, coinsurance — health insurance can seem like it has a language all its own. Cut through the jargon by learning the meanings of some common health insurance terms.
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Actual Charge
The amount a doctor or health care provider bills a patient. This may differ from the allowable charge, which is what the health plan agrees to pay for covered services.
Allowable Charge
The most your health plan will pay for a covered service. This may differ from the actual charge you see on the bill from your doctor.
Approval
The process of deciding whether or not a health plan will cover a specific service. Certain procedures require pre-approval or prior authorization. This means the health plan must approve the service before you receive it, in order for your claim to be paid.
Approved Amount
The amount your health plan says is reasonable for a covered service. This amount may be less than the actual amount your doctor charges.
Assignment
An arrangement in which the health plan pays the health care provider directly.
Benefit
Services and supplies a health plan pays for. The term also refers to the amount a health plan will pay.
Benefit Period
The period of time a health play will help pay for covered services. Benefit periods are usually one year. The benefit year may not be the same as the calendar year. With Medicare, “benefit period” also refers to your use of inpatient services. The benefit period begins the day you are admitted to a hospital or skilled nursing facility. It ends when you’ve been out for 60 days. You must pay the inpatient hospital deductible for each benefit period. There’s no limit to the number of benefit periods.
Cafeteria Plan
A health plan in which employees can choose from two or more benefit options. This is also called a flexible benefits plan.
Case Management
A service offered by your health plan and/or insurance company. With case management, you have a special nurse assigned to assist with the organization of your care. This nurse works with your doctor, your family and you. The goal is to help you get the most out of your health plan benefits.
Catastrophic Coverage
A type of health insurance that covers severe or prolonged illness or injury. These plans help pay for care in situations that are life-threatening or could result in serious disability. They have high deductibles. But the plans cost less than other types of coverage.
Coinsurance
The amount you pay for covered services. For example, if you have an "80/20 plan," your health plan pays 80 percent of the bill and you pay 20 percent. The 20 percent you pay is your coinsurance.
Comprehensive Coverage
A type of health insurance that covers a full range of personal health services. Benefits may include diagnosis, treatment, follow-up care and rehabilitation. These plans usually include deductibles and coinsurance.
Copay/Copayment
A set fee you pay for each doctor's office visit, medical service or prescription. For example, your health plan may have a $10 copayment for doctor's office visits. This means every time you visit your doctor, you pay $10.
Cost Sharing
A method of dividing the cost of health care among customers, insurance companies, employers and providers. For example, your employer may pay part of the premiums for your insurance. Your health plan will pay part of your health care bills, and you will pay part. If your doctor is part of your health plan's network, then he or she will cover part of the cost by negotiating a discount for his or her services. Everyone shares in the cost to keep costs down.
Covered Service
Specific service your health plan will help pay for.
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Deductible
The amount of money you must pay before your health plan will begin to pay its share. For example, say your health plan has a $250 deductible. You must pay $250 toward covered health care services before your health plan begins paying.
Disease Management
Voluntary programs that help patients live well with chronic conditions. These programs provide information and support. They aim to help you understand your doctor’s instructions and improve the way you care for yourself every day.
Emergency Medical Condition
A severe illness or injury (including pain) that requires medical care right away. Without it, you may face serious risks to health or bodily functions. This includes damage to any organs or body parts. If you’re pregnant, it includes the health of the unborn child.
Exclusion
A service or item your health plan doesn't cover.
Fee for Services
This is a "traditional" approach to health care. You pay doctors and hospitals for each service you receive. Your health plan helps pay a portion of the cost.
Flexible Benefits Plan
A health plan in which employees may choose from two or more benefit options. This is also called a cafeteria plan.
Fraud
A deception that could result in your health plan paying for something it shouldn't. For example, if your doctor files a claim for a service you didn't receive, this is fraud.
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Health Savings Account (HSA)
A type of account that allows you to set aside tax-free money to use to pay for certain medical expenses. An HSA pairs with a high deductible health plan. You and your employer can put money into it.
High Deductible Health Plan (HDHP)
A type of health plan that has a higher deductible than traditional insurance plans. That means you pay more out of pocket toward your health care before the health plan begins to pay its share. These plans generally cost less than traditional plans.
Home Health Agency (HHA)
An organization that offers skilled nursing care and other services to patients in their homes. These include occupational, physical and speech therapies; medical social services; and home health aide services.
Hospice
A type of care that helps patients with terminal illnesses and their families. Hospice programs help patients get care at home instead of in a hospital or nursing home, with a goal of improving quality of life for as long as possible. Staff members help relieve pain, manage symptoms and offer counseling to patients and their families.
Immunosuppressive Drugs
Medicine that people who have certain health conditions or have received organ transplants must take. These drugs suppress the immune system and can help prevent bodies from rejecting the new organs.
Inpatient
Care received while staying in a hospital or other care facility. For example, if you need to have surgery, you may stay there for several days. This is inpatient care.
Managed Care
An evolving approach to health care. Managed care aims to improve cost, utilization and quality of health care services. It involves arrangements between health plans and providers; established fees for health care services; incentives for members to participate within the plan; and monitoring the use of health care services.
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Out-of-pocket Maximum
The most you’ll pay out of pocket for covered services during the benefit period.
Outpatient
Care you receive in a hospital without having to stay there. For instance, you may have a procedure during the day at a hospital, but you get to go home right after it. There may be some cases when you spend the night in a hospital, but care is still considered outpatient. It's always best to ask your doctor if you're getting outpatient or inpatient care. Your health plan may pay differently for each.
Pre-existing Condition
An injury or illness you had before you had your health plan. Some health plans don’t cover services for pre-existing conditions. Or there may be a waiting period before you can get benefits for them.
Primary Care Provider
A doctor who treats common illnesses and injuries. Some plans require you to choose a PCP to oversee your care. Each family member can have a different PCP. Your PCP must give you a referral to see a specialist.
Referral
Consent from your primary care physician (PCP) to see a specialist. You may also need a referral to have certain types of treatment, such as X-rays or surgery. Not all health plans require referrals.
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Specialist
A doctor who has a specific area of focus. For example, a surgeon is a specialist. A doctor who treats allergies or heart problems is also a specialist. Some health plans may require you to get a referral from your primary care physician to see a specialist.