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Coinsurance
. . . Copayment . . . EOB . . . What does it all mean?
At ColoHealth.com,
we understand how confusing it can be to decipher all the insurance
terms and acronyms that come with purchasing a health plan. Therefore,
we’re providing you with the definitions of the most commonly
used insurance terms and acronyms.
When reading
the definitions, please keep in mind that this glossary is provided
as a general guide. These definitions are for illustrative purposes
only and are not meant to be exhaustive. Definitions and plan options
may vary by state and plan. If you obtain coverage, please refer
to your contract for a complete listing and exact definition of
terms, as your contract language will prevail.
A
Ancillary
Services - services, other than those provided by a physician
or hospital, which are related to a patient’s care, such as
laboratory work, x-rays and anesthesia.
C
Calendar
Year - the period beginning January 1 of any year through
December 31 of the same year.
Case
Management
- a process whereby a covered person with specific health care needs
is identified and a plan which efficiently utilizes health care
resources is designed and implemented to achieve the optimum patient
outcome in the most cost-effective manner.
Certificate
of Coverage - a document given to an insured that describes
the benefits, limitations and exclusions of coverage provided by
an insurance company.
Claim
- Information a medical provider or insured submits to an insurance
company to request payment for medical services provided to the
insured.
Coinsurance
- The portion of covered health care costs for which the covered
person has a financial responsibility, usually a fixed percentage.
Coinsurance usually applies after the insured meets his/her deductible.
Consolidated
Omnibus Budget Reconciliation Act (COBRA) - a federal
law that, among other things, requires employers to offer continued
health insurance coverage to certain employees and their beneficiaries
whose group health insurance has been terminated if they undergo
a triggering event.
Contract
Year - the period of time from the effective date of
the contract to the expiration date of the contract.
Coordination
of Benefits (COB) - a provision in the contract that
applies when a person is covered under more than one medical plan.
It requires that payment of benefits be coordinated by all plans
to eliminate overinsurance or duplication of benefits.
Copayment
- a cost-sharing arrangement in which an insured pays a specified
charge for a specified service, such as $25 for an office visit.
The insured is usually responsible for payment at the time the service
is rendered. This charge may be in addition to certain coinsurance
and deductible payments.
Covered
Person - an individual who meets eligibility requirements
and for whom premium payments are paid for specified benefits of
the contractual agreement.
Covered
expenses - services for which the health insurance makes
either a full or partial payment.
D
Deductible
- the amount of eligible expenses a covered person must pay each
year from his/her own pocket before the plan will make payment for
eligible benefits.
Deductible
Carry Over Credit - charges applied to the deductible
for services during the last 3 months of a calendar year which may
be used to satisfy the following year’s deductible.
Dependent
- a covered person who relies on another person for support or obtains
health coverage through a spouse, parent or grandparent who is the
covered person under a plan.
E
Effective
Date
- the date insurance coverage begins.
Eligible
Dependent
- a dependent of a covered person (spouse, child, or other dependent)
who meets all requirements specified in the contract to qualify
for coverage and for who premium payment is made.
Eligible
Expenses - the lower of the reasonable and customary
charges or the agreed upon health services fee for health services
and supplies covered under a health plan.
Emergency:
the sudden, and at the time, unexpected onset of a health condition
that requires immediate medical attention where failure to provide
medical attention would result in serious impairment to bodily functions
or serious dysfunction of a bodily organ or part, or would place
the person’s health in serious jeopardy.
Explanation
of Benefits (EOB)
- the statement sent to an insured by their health insurance company
listing services provided, amount billed, eligible expenses and
payment made by the health insurance company.
F
Formulary
-
a list of particular prescription drugs for which an insurer provides
additional coverage or a lower copay.
H
Health
Savings Account - special plans in which money can be
deposited into a tax-deferred health savings account from which
you can withdraw money on a pre-tax basis for qualified medical
care and expenses.
I
Insured
- a person who has obtained health insurance coverage
under a health insurance plan.
L
Lifetime
limit - the total maximum the policy will pay. Most
plans have at least $1 million, and many have $2- to $5 million
in lifetime coverage.
M
Managed
Care
- a health care system under which physicians, hospitals, and other
health care professionals are organized into a group or “network”
in order to manage the cost, quality and access to health care.
Managed care organizations include Preferred Provider Organizations
(PPOs) and Health Maintenance Organizations (HMOs).
N
Network
- doctors, hospitals, and other medical providers
that are contracted to provide services for a particular plan. PPO
members have less out-of-pocket expense when they use network providers.
O
Out-of-Pocket
Maximum - the total payments that must be paid by a covered
person (i.e., deductibles and coinsurance) as defined by the contract.
Once this limit is reached, covered health services are paid at
100% for health services received during the rest of that calendar
year.
Outpatient
medical care: non-surgical services
provided in a provider’s office, the outpatient department
of a hospital or other facility, or the member’s home.
P
Participating
Provider - a medical provider who has been contracted
to render medical services or supplies to insureds at a pre-negotiated
fee. Providers include hospitals, physicians, and other medical
facilities.
Physician:
A doctor of medicine or osteopathy who is licensed to practice medicine
under the laws of the state or jurisdiction where the services are
provided.
Pre-existing
condition - a health problem that existed before
your coverage went into effect. Many plans won't cover preexisting
conditions.
Preferred
Provider Organization (PPO)
- a health care delivery arrangement which offers insureds access
to participating providers at reduced costs. PPOs provide insureds
incentives, such as lower deductibles and copayments, to use providers
in the network. Network providers agree to negotiated fees in exchange
for their preferred provider status.
Premium
- the amount you pay (usually monthly) for your insurance.
Preventive
care:
comprehensive care that emphasizes prevention, early detection and
early treatment of conditions through routine physical exams, immunizations
and health education.
Provider
- a physician, hospital, health professional and other
entity or institutional health care provider that provides a health
care service.
Primary
Care Physician (PCP) - a physician that is responsible
for providing, prescribing, authorizing and coordinating all medical
care and treatment. Note: PPOs typically allow you to go to any
doctor in the network, and do not require that you consult with
a PCP.
Prescription
drugs:
prescription drugs
include:
- Brand
name prescription drug: the initial version of a medication
developed by a pharmaceutical manufacturer or a version marketed
under a pharmaceutical manufacturer's own registered trade name
or trademark.
- Legend
drug: a medicinal substance, dispensed for outpatient use,
which under the Federal Food, Drug & Cosmetic Act is required
to bear on its original packing label, “Caution: Federal
law prohibits dispensing without a prescription.”
- Formulary:
a list of pharmaceutical products developed in consultation with
physicians and pharmacists and approved for their quality and
cost effectiveness.
- Generic
prescription drug: drugs determined by the FDA to be bio-equivalent
to brand name drugs and that are not manufactured or marketed
under a registered trade name or trademark.
R
Reasonable
and Customary (R &C)
- a term used to refer to the commonly charged or prevailing fees
for health services within a geographic area. A fee is generally
considered to be reasonable if it falls within the parameters of
the average or commonly charged fee for the particular service within
that specific community. Note: charges within a PPO network are
not normally limited to reasonable and customary fees.
U
Underwriting
- the act of reviewing and evaluating prospective insureds for risk
assessment and appropriate premium.
Usual
and customary charge - the amount a plan will pay for
a particular procedure, usually based on a prevailing average.
W
Well-child
visit: a
physician visit that includes the following components: an age-appropriate
physical exam, history, anticipatory guidance and education (e.g.,
examining family functioning and dynamics, injury prevention counseling,
discussing dietary issues, reviewing age-appropriate behaviors,
etc.), and assessment of growth and development. For older children,
a well-child visit also includes safety and health education counseling.
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