Balance Billing—The practice of billing a patient for the amount that remains after the insurer’s payment and patient’s copayment have been made.

Benefit—An amount payable by the insurance carrier.

Benefit Period, Medicare—The period of time that begins the first day a person enters a hospital or skilled nursing facility and ends 60 days after discharge without being readmitted to either type of facility.

Catastrophic Insurance—A type of limited health insurance that serves the purpose of covering very high medical expenses. The deductibles are very high ($2,000 or above) and the premiums are low.

Certificate of Creditable Coverage—A document provided by your health plan that lets you prove you had coverage under that plan. Certificates of creditable coverage will usually be provided automatically when you leave a health plan. You can obtain certificates at other times as well.

Coinsurance—The portion of the bill for which the insured is responsible.

Comprehensive Coverage—Insurance is either comprehensive or limited. Comprehensive means broader coverage and/or higher indemnity payments than limited coverage.

Continuous Coverage—Health insurance is continuous if it is not interrupted by a break of 63 or more consecutive days. In some state regulated plans, the maximum lapse in coverage may be longer than 63 days.

Copayment—In managed care plans, the amount the insured must pay directly to the provider of the service. Copayments typically range between $5 to $25.

Creditable Coverage—Health insurance coverage under any of the following: a group health plan; an individual health plan; Medicare; Medicaid; State Children's Health Insurance Program, CHAMPUS and TRICARE (health coverage for military personnel, retirees, and dependents); Federal Employees Health Benefits Program; Indian Health Service; Public Health Plan (any plan established or maintained by a State, the U.S. government, a foreign country); the Peace Corps; or a state health insurance high risk pool. See also Continuous Coverage, Group Health Plan, Individual Health Plan.

Deductible—The amount of money the insured must pay out of pocket before benefits begin. Deductibles are usually on a calendar year or policy year basis. Some policies have deductibles per diagnosis—the least desirable—or family deductibles. A policy may have a $250 deductible per individual with a $500 deductible per family. This means that when two individuals have each satisfied a $250 deductible, the remaining family members will not have to meet any deductible.

Elimination Rider—A feature permitted in individual health plans that excludes coverage for a pre-existing condition. Unlike preexisting condition exclusion periods, which are temporary, elimination riders can last indefinitely. Elimination riders cannot be imposed if you are HIPAA eligible.

Explanation of Benefits (EOB)—One of these forms comes with or without an insurance check to explain what portion of the submitted bill was covered and why. If the patient has more than one policy, this is proof of what his or her primary coverage paid.

Exclusions—Specified illnesses, injuries, or conditions listed in the policy that are not covered. Experimental therapies, cosmetic surgery, and eyeglasses are common exclusions.

Fee-for-Service—See indemnity insurance.

Health Maintenance Organization (HMO)—The first and most traditional type of managed care plan. Like other types of managed care, HMOs are organizations that both finance healthcare (provide insurance) and provide the care by collecting fees in advance.

Health Savings Account (HSA)—A taxfavored savings account available to eligible individuals that are covered by a federally qualified high deductible health plan. Funds accumulated in a HSA can be used to pay for certain health-care costs.

Health Status—Refers to your medical condition (both physical and mental illness,) claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability, (including conditions arising out of acts of domestic violence,) and disability.

High-Risk Pool—A program offered in 31 states that sells health insurance to people who need to buy coverage on their own but can’t because insurance companies consider them “medically uninsurable.” A cancer diagnosis or history can render someone uninsurable in the individual health insurance market unless state laws require health insurers to sell coverage to everyone.

Indemnity Insurance—Traditional insurance that pays providers on a fee-for-service basis.

Lifetime Limit or Maximum—Total benefits that the insurance company will pay per individual over a lifetime.

Managed Care Plan—Organization that functions as both insurer and provider of healthcare simultaneously. HMOs were the first type, but variations include preferred provider organizations (PPOs) and independent practice associations (IPAs). HMOs tend to operate with stricter rules than other types of managed care plans.

Medicaid—A joint federal and state health insurance program that assists individuals with low incomes and limited resources. Medicaid programs vary from state to state.

Medicare—The federal health insurance program for people 65 years of age or older, certain younger people with disabilities, and people with permanent kidney failure.

Open Enrollment—The period of time in which eligible individuals may enroll in, or  transfer between, health-care insurance programs. Plans must accept all individuals who enroll during open enrollment.

Out-of-Pocket Limit—A cap or limit placed on a patient’s out-of-pocket costs, after which the plan provides full coverage for all costs for the remainder of the year.

Participating Provider—A health-care provider who has joined a managed care plan and is willing to accept its contracts.

Portability—Insurance that can be retained even if one leaves employment or the group plan.

Pre-Existing Condition—A health condition that existed before a policy was purchased. Companies’ definitions of pre-existing conditions vary, but usually anything for which a patient has seen a doctor during the previous 6 months is a pre-existing condition and will not be covered during the waiting period, which is typically six to twelve months after the effective date of coverage.

Pre-Existing Condition Exclusion Period—The first days of an illness that are not covered by insurance.

Preferred Provider Organization (PPO)—A PPO is a type of managed care plan that allows members to access service both from in-network providers and out-of-network providers. Members pay higher out-of-pocket costs when they receive care outside the PPO network.

Premium—The amount paid to an insurance company for providing insurance coverage.

Point-of-Service (POS) plan—A type of managed care plan that gives the insured the option of seeing providers within the plan’s network and paying the copayment amount only, or seeing providers out of the network and getting reimbursed as one would under an indemnity policy. Although these plans are increasingly popular because they allow for choice of providers, the premiums are higher than plans that provide no coverage for providers outside the network.

Primary Care Provider (PCP)—Sometimes referred to as “gatekeepers,” PCPs are nonspecialty physicians that enrollees choose to serve as their coordinator for all the services they may need. In many managed care plans, PCPs must pre-approve referrals to specialists and use of services, including emergency room care.
Provider—The supplier, physician, psychologist, pharmacist, or other health-care  professional providing a service to the insured.

Stop-Loss—The point during a calendar year when your insurance policy pays 100 percent of costs for the remainder of the year. Thus, your out-of-pocket expenditures, or losses, stop. Most policies pay 80 percent and the individual pays 20 percent. If the policy has a $5,000 stop-loss point, 20 percent of that equals $1,000. This means that when you have spent $1,000 out of your pocket plus your deductible, the policy will pay 100 percent rather than 80 percent.

Waiting Period—The time after the beginning date of a policy when benefits are not payable.