Glossary

Allowable Fee — [Also referred to as 'Usual & Customary Reimbursement or UCR.] The maximum amount of money that the health insurance provider will agree to pay for a specific medical service or procedure.

Carrier — The insurance company or provider offering a health insurance plan.

Claim — A request made by the insured individual to the insurance company to pay for services that were administered by a medical professional.

Copayment — A method of shared payment between the insurance company and the insured patient. The patient pays a specific dollar amount toward the cost of a medical service, and the insurance company is obligated to pay the rest of the bill. Different types of medical services can carry different copay amounts.

Deductible — The fixed dollar amount that the insured individual pays before the insurance company begins paying for covered medical services, during the benefit period which is typically one year. Insurance plans may have individual and family deductibles.

Explanation of Health Care Benefits (EOB) — A statement sent to the member of a health insurance plan for the purpose of explaining how benefits have been applied to a claim.

Formulary — A list of all prescription medications covered under your health insurance plan.

HMO - Health Maintenance Organization — A managed health care system that provides comprehensive medical services and responsibility for the delivery of such services in exchange for a fixed, pre-paid fee. An HMO covers care administered by medical professionals who are in their 'network', meaning that they have agreed to treat patients in a manner consistent with the HMO's guidelines.

HSA - Health Savings Account — A savings account that permits policy holders to use pre-tax money on covered medical expenses. Health Savings Accounts are coupled with High Deductible Insurance Plans for which contributions can be made by an employer or an employee.

Indemnity Plan — A medical plan that reimburses the health care provider or patient as costs are incurred.

Individual Health Insurance — A health insurance plan that applies to an individual person, not a group or employee sponsored plan. Individual health plans typically carry a higher premium. (More information available at http://www.HealthInsuranceSort.com.)

Medicaid — A state/federal government program that provides health care assistance to those who are unable to pay for medical expenses.

Medicare — A federal program providing health care benefits to eligible individuals, typically those over the age of 65 and the disabled. The program is paid for using payroll taxes from employers and employees. Medicare consists of Part A and Part B: Part A is funded by the government and covers hospitalization, while Part B, Supplemental Medical Insurance, covers basic medical costs and is paid for by the government and the insured.

Network — A group of physicians and hospitals that provide health care services to members of a particular health insurance company's plan. The network provides services to these customers at lower rates than usual.

POS - Point-of-Service Plan — A Point of Service, or POS, plan is a composite of HMO and PPO plans. Insured individuals are required to select a primary care physician within the network. While a patient may opt to see a physician outside of the network, he or she will be required to pay the majority, or entirety, of the bill. On the other hand, should your primary care physician refer you to a provider outside of the network, the insurer will pay most or all of the bill.

Pre-Existing Conditions — A medical condition that is not covered by an insurance plan because it was perceived to be present in the individual before the purchase of the health insurance policy.

PPO - Preferred Provider Organization — [Also referred to as a Participating Provider Organization or Preferred Provider Option]. This is a managed care system consisting of physicians, hospitals and other health care professionals who administer medical services through an insurance provider or third party to provide services at reduced rates. With a PPO, the insured individuals pay as they go for medical services, rather than a fixed, pre-paid fee. With a PPO plan, individuals receive reduced costs for medical services received in the network, but have the option to pay more if they choose to see a medical professional who is out of the PPO network.