Glossary

Coinsurance
The amount that you are obligated to pay for covered medical services after you’ve satisfied any co-payment or deductible required by your health insurance plan. Coinsurance is typically expressed as a percentage of the charge or allowable charge for a service rendered by a healthcare provider. For example, if your insurance company covers 80% of the allowable charge for a specific service, you may be required to cover the remaining 20% as coinsurance.
Co-payment
A specific charge that your health insurance plan may require that you pay for a specific medical service or supply, also referred to as a “co-pay.” For example, your health insurance plan may require a $15 co-payment for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.
Deductible
A specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for claims. Not all health insurance plans require a deductible. As a general rule (though there are many exceptions), HMO plans typically do not require a deductible, while most Indemnity and PPO plans do.
Drug Formulary
A list of prescription medications selected for coverage under a health insurance plan. Drugs may be included on a drug formulary based upon their efficacy, safety and cost-effectiveness. Some health insurance plans may require that patients obtain preauthorization before non-formulary drugs are covered. Other health insurance plans may require that a patient pay a greater share or all of the cost involved in obtaining a non-formulary prescription
Effective Date
The date on which health insurance coverage comes into effect.
Emergency Room
Typically, emergency room services include all services provided when a patient visits an emergency room for an emergency condition. An emergency condition is any medical condition of recent onset and severity, including but not limited to severe pain, that would lead to a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in placing the patient’s health in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of bodily organ or part.
Estimated Cost
The amount quoted is an estimated cost of the health plan, which is subject to change based on your medical history, the underwriting practices of the health plan, the optional benefits you selected, if any, and other relevant factors. It may be the sum of estimated premiums and other recurring charges, if the insurance company has such charges.
Explanation of Benefits (EOB)
A statement sent from the health insurance company to a member listing services that were billed by a health care provider, how those charges were processed, and the total amount of patient responsibility for the claim.
Generic Drug
A drug which is exactly the same as a brand name prescription drug, but which can be produced by other manufacturers after the brand name drug’s patent has expired. Generic drugs are usually less expensive than brand name drugs.
HIPAA (Health Insurance Portability and Accountability Act of 1996)
Legislation mandating specific privacy rules and practices for medical care providers and health insurance companies, designed to streamline the healthcare and insurance industries and to protect the privacy and identity of healthcare consumers. HIPAA also provides additional protections for consumers, designed to help them obtain or retain health insurance coverage in certain circumstances. For more information on HIPAA rules and regulations, visit the Centers for Medicare and Medicaid Services website at http://www.cms.hhs.gov.
HMO
HMO means “Health Maintenance Organization.” HMO plans offer a wide range of health care services through a network of providers that contract exclusively with the HMO, or who agree to provide services to members at a pre-negotiated rate. As a member of an HMO, you will need to choose a primary care physician (“PCP”) who will provide most of your health care and refer you to HMO specialists as needed. Some HMO plans require that you fulfill a deductible before services are covered. Others only require you to make a copayment when services are rendered. Health care services obtained outside of the HMO are typically not covered, though there may be exceptions in the case of an emergency.
HSA (Health Savings Account)
A tax advantaged savings account to be used in conjunction with certain high-deductible (low premium) health insurance plans to pay for qualifying medical expenses. Contributions may be made to the account on a tax-free basis. Funds remain in the account from year to year and may be invested at the discretion of the individual owning the account. Interest or investment returns accrue tax-free. Penalties may apply when funds are withdrawn to pay for anything other than qualifying medical expenses.
Hospice Care
Care rendered either on an inpatient basis or in the home setting for a terminally ill patient. Often referred to as “palliative” or “supportive” care, hospice care emphasizes the management of pain and discomfort and the emotional support of the patient and family.
Hospital Benefits
Benefits payable for hospital room and board and other miscellaneous charges resulting from hospitalization.
IPA (Individual Practice Association)
An organization of physicians who may maintain separate offices but who negotiate contracts with insurance companies and medical facilities as a group. Some health insurance applications will ask you to provide your primary care physician’s IPA number. It can usually be found in the health insurance plan’s online directory.
Inpatient
A term used to describe a person admitted to a hospital for at least 24 hours. It may also be used to describe the care rendered in a hospital when the duration of the stay is at least 24 hours.
Lab/X-ray
Typically, lab/x-ray is any diagnostic lab test or diagnostic/therapeutic x-ray performed in support of basic health services. Lab services typically include services like blood panels and urinalysis. X-ray services typically include basic outpatient skeletal or other plain film x-ray, outpatient ultrasound, GI series, MRI, and CT scan. Prostate cancer screening, mammograms, and pap smears may be covered by Lab/X-Ray benefit, or they may be covered by Periodic OB-GYN benefit or Preventative Care benefits. Typically, dental x-rays are not included in Lab/X-ray benefits.
Lifetime Maximum
The maximum dollar amount that a health insurance company agrees to pay on behalf of a member for covered services during the course of his or her lifetime.
Maternity (Inpatient)
Typically, inpatient maternity services include hospitalization and physician fees associated with the birth of a child.
Maternity (Outpatient)
Typically, outpatient maternity services include OB-GYN office visits during pregnancy and immediately after giving birth.
Maternity Coverage
Maternity coverage means the insurance covers part or all of the medical cost during a woman’s pregnancy. Coverage is broken down into inpatient and outpatient services. Typically, inpatient coverage includes hospitalization and physician fees associated with child birth. Outpatient coverage pays for prenatal and postnatal OB-GYN office visits.
Maximum Out-Of-Pocket Costs
The most a member will be required to pay out-of-pocket in a benefit year, often including co-payments coinsurance and deductibles.
Medical Necessity
A basic criterion used by health insurance companies to determine if healthcare services should be covered. A medical service is generally considered to meet the criteria of medical necessity when it is considered appropriate, consistent with general standards of medical care, consistent with a patient’s diagnosis, and is the least expensive option available to provide a desired health outcome. Of course, preventive care services that may be covered under a health insurance plan are not always subject to the criteria of medical necessity.
Medicare
A national, federally-administered health insurance program authorized in 1965 to cover the cost of hospitalization, medical care, and some related health services for most people over age 65 and certain other eligible individuals.
Medicare Supplement Insurance
Health insurance provided to an individual or group that is intended to help fill in the gaps in the coverage provided by Medicare.
Network Provider
A healthcare provider who has a contractual relationship with a health insurance company. Among other things, this contractual relationship may establish standards of care, clinical protocols, and allowable charges for specific services. In return for entering into this kind of relationship with an insurance company, a healthcare provider typically gains in numbers of patients and a primary care physician may receive a capitation fee for each patient assigned to his or her care.
Office Visit
Typically, an office visit is an outpatient visit to a physician’s office for illness or injury.
Out-of-pocket Maximum
The most a member will be required to pay out-of-pocket in a benefit year, often including co-payments coinsurance and deductibles.
Outpatient
A term referring to a patient who receives care at a medical facility but who is not admitted to the facility overnight, or for 24 hours or less. The term may also refer to the healthcare services that such a patient receives.
Outpatient Surgery
Typically, outpatient surgery is defined as any surgical procedure that does not require an overnight stay in a hospital.
PPO
PPO means “Preferred Provider Organization.” Like the name implies, with a PPO plan you’ll need to get your medical care from doctors or hospitals on the insurance company’s list of preferred providers if you want your claims paid at the highest level. You will probably not be required to coordinate your care through a single primary care physician, as you would with an HMO, but it’s up to you to make sure that the health care providers you visit participate in the PPO. Services rendered by out of network providers may not be covered or may be paid at a lower level. A broad variety of PPO plans are available, many with low monthly premiums.
Participating Provider
Generally, this term is used in a sense synonymous with Network Provider. However, not all healthcare providers contract with health insurance companies at the same level. Some providers contracting with insurers at lower levels may sometimes be referred to as “participating providers” as opposed to “preferred providers.”
Physical Therapy
Typically, physical therapy services include rehabilitative services provided by a licensed physical therapist to help restore bodily functions such as walking, speech, the use of limbs, etc.
Pre-existing Condition
A health problem that existed or was treated before the effective date of your health insurance coverage. Most health insurance contracts have a pre-existing condition clause that describes conditions under which the health insurance company will cover medical expenses related to a pre-existing condition.
Premium
The total amount paid to the insurance company for health insurance coverage. This is typically a monthly charge. Within the context of group health insurance coverage, the premium is paid in whole or in part by the employer on behalf of the employee or the employee’s dependents.
Prescription Medication
A drug that may be obtained only with a doctor’s prescription and which has been approved by the Food and Drug Administration.
Preventive Care
Medical care rendered not for a specific complaint but focused on prevention and early-detection of disease. This type of care is best exemplified by routine examinations and immunizations. Some health insurance plans limit coverage for preventive care services, while others encourage such services. Note that well-baby care, immunizations, periodic prostate exams, pap smears and mammograms, though considered preventive care, may be covered even if your health insurance plan limits coverage for other preventive care services.
Primary Care Physician (PCP)
A patient may be required to choose a primary care physician (PCP). A primary care physician usually serves as a patient’s main healthcare provider. The PCP serves as a first point of contact for healthcare and may refer a patient to specialists for additional services.
Provider
A term commonly used by health insurance companies to designate any healthcare provider, whether a doctor or nurse, a hospital or clinic.
Underwriting
Underwriting is the process by which an insurer determines whether it will accept an application for insurance based upon risks and projections, through which a determination on monthly premium is made.
Waiting Period
A period of time (often 12 months) beginning with your effective date during which your health insurance plan does not provide benefits for pre-existing conditions. This period may be reduced or waived based on any prior health care coverage you had before applying for your new health insurance plan.
Well-Baby/Well-Child Care
Regularly scheduled, preventive care services, including immunizations, provided to children up to an age specified by a health insurance company or mandated by a government agency. HMO and POS plans typically provide coverage for well-baby care, though coverage for these services may be limited under a PPO plan.
Well-Woman Care
A term sometimes used by insurance companies and healthcare providers to refer to mammograms and pap smears as well as other preventive care services rendered to a woman.

The open enrollment period for health insurance is currently closed (the next open enrollment period will be in the fall of 2014), but you may enroll in a Covered California health insurance plan now if you experience a qualifying life event.

Common types of qualifying life events for special enrollment:

  • • You get married or enter into a domestic partnership.
  • • You have or adopt a child, receive a child into foster care, or you place a child in adoption or in a foster home.
  • • You change where you permanently live (in-state, out-of-state, released from prison), gaining more options for Covered California health insurance plans.
  • • You lose your health coverage - no longer eligible for Medi-Cal or you lose health coverage through your job.
  • • Your income changes so much that you become newly eligible or ineligible for help paying for your insurance.
  • • You become a citizen, national or lawfully present individual.
  • • Your enrollment was wrong, due to the misconduct or misrepresentation of your health insurance company, Covered California or a non-Covered California entity (such as a Certified Enrollment Counselor).
  • • You applied for health coverage before March 31 and were denied for Medi-Cal after March 31.
  • • You are a member of a federally recognized American Indian or Alaska Native tribe.
  • • Covered California can also determine, on a case-by-case basis, that you experienced an exceptional circumstance, which could allow for a special enrollment period.
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