Insurance terms

Also called Obamacare plans, these are health insurance policies that meet all the coverage requirements laid out in the 2010 Affordable Care Act. This sweeping health reform law set new standards for insurance to better protect consumers. All ACA plans must offer essential health benefits, cover preexisting conditions, have no annual/lifetime dollar limits, and meet other requirements. This improved-quality coverage comes with an individual mandate to have insurance or face a tax penalty.

Supplemental insurance that covers expenses if you suffer an unexpected injury from an accident, such as broken bones from a bike crash, concussions on the basketball court, burns from a cooking mishap, and more. Accident insurance helps cover costly medical bills, ambulance fees, or unpaid time off work to recover that your regular medical insurance may not address.

These are healthcare teams that work together to provide coordinated care, aiming to improve quality and cut costs by sharing responsibilities and rewards.

These professionals use statistics and analytics to calculate risk and forecast future costs. Health insurance companies rely on actuaries to crunch the numbers on historical claims data and health trends to accurately predict future expenses. This guides pricing and ensures enough premium payment is collected upfront to cover upcoming medical bills that could randomly hit.

An insurance claims adjuster is someone charged with evaluating an insurance claim to determine if and how much an insurance company must pay for the claim under review. An adjuster may be a representative of the insurance company or they may be independent. A claimant can also hire a public adjuster to do their own investigation on the claim, apart from the insurance company.

This is an agreement between doctors and hospitals that allows physicians to admit patients to that hospital for medical treatment or care.

These discussions take place between healthcare providers and individuals to determine preferences for future medical care. It includes conversations about end-of-life care wishes, ensuring that healthcare aligns with a person’s values and desires.

An advance directive is a legal document allowing individuals to spell out their healthcare wishes. It may include instructions about life-sustaining treatments and appointing someone to make healthcare decisions on their behalf if they cannot communicate.

This can be the first or binder payment of an insurance policy, or it may be a payment made before the scheduled first payment for a policy that the insurance company makes available to the policyholder, typically, for a discount or as part of a promotion.

This government subsidy helps reduce the cost of health insurance premiums for eligible individuals or families with lower incomes.

With respect to health insurance, an adverse benefit determination refers to a situation where the insurance company denies a benefit, refuses payment for a service already received, or rescinds health coverage.

Adverse selection is a situation in which those who expect to need more healthcare services are the ones signing up for insurance. It can lead to imbalanced risk pools and potentially higher costs for insurers, affecting the stability of insurance plans.

The ACA is a comprehensive healthcare reform law aimed to improve healthcare accessibility, affordability, and quality in the United States. Sometimes known as Obamacare, it introduced measures such as health insurance marketplaces, subsidies, and protections against insurance denials due to preexisting conditions.

In healthcare, an agent is a licensed individual who assists in finding and purchasing health insurance plans that match a person's needs. They help buyers navigate the various insurance options available in the market.

This is the maximum dollar amount a health insurer agrees to pay for any medical service, treatment, test, etc. Anything above this agreed rate will be billed to patients as "balance billing." Rate negotiations between health providers and insurance carriers establish allowed amounts for every covered service, from a 15-minute doctor visit to an organ transplant surgery.

This legislative package provided economic relief during the COVID-19 pandemic. It included measures to expand and increase subsidies for health insurance plans under the ACA, reducing costs for many individuals and families.

This refers to the maximum amount an insurance plan will pay for covered services in one year. The ACA prohibited most health insurance plans from imposing annual limits on essential health benefits to ensure adequate coverage for individuals.

If a claim is denied by the insurance company, the insured person can request they take a second look and reconsider covering it. Submitting a formal appeal with evidence from your doctor allows you to contest your insurer's decision. Health plans must outline the appeals process, which starts with an internal review and can escalate to external third parties or a court. Appeals allow you to stand up for your right to fair coverage.

With respect to health insurance, an application is a form providing the insurer with certain information necessary to underwrite one’s health risks. It is typically attached to the insurance contract as part of the “entire contract.”

These plans allow small businesses or self-employed individuals to join together to purchase health insurance. It aims to give them access to more affordable coverage by leveraging the buying power of a larger group.

Someone who you choose to act on your behalf with the Marketplace, like a family member or other trusted person. Some authorized representatives may have legal authority to act on your behalf.

This is the amount a healthcare provider charges a patient for the difference between what their insurance covers and the cost of the services rendered.

This is a plan that is used as a reference point for determining the level of coverage and costs for health insurance offered in a particular area.

Beneficiaries receive advantages or payments from an insurance policy, as in the case of a person covered by a health insurance plan. Beneficiaries can have any health insurance, including Medicare, Medicaid, or private coverage.

Some plans limit coverage for health treatments or services by capping the number of visits or dollar amount they'll shell out for them in a year. For example, an insured person may encounter a hard cutoff after 20 chiropractor sessions or 30 physical therapy appointments annually. Other caps could restrict how much the plan covers for high-cost infertility treatments. While benefit caps aim to prevent overutilization, knowing which critical services have limits can help buyers choose the best insurance policy.

Unlike the calendar year, which starts fresh on January 1, a benefit year is based on the date when a plan began. This 12-month cycle serves as the basis for all the elements of a policy, from deductibles, out-of-pocket maximums, and covered drugs to in-network providers and more. It's essentially how insurance companies keep track of a person’s accumulating costs and enrollment specifics over time. Switching plans mid-year? Understanding the benefit year provided insight into upcoming changes to expect.

A book of business, in the context of insurance, is a database or “book” that lists all of the insurance policies the insurance company has written or completed.

These are medications with exclusive patent-protected names, like Vyvanse for treating ADHD or Keytruda for different types of cancer. Despite high price tags, they advertise directly to patients because no generic equivalents exist yet to compete with them. Being the only one on the shelves gives brand-name drugs the leverage to charge more and maximize profits during the patent protection period. This contributes to rising insurance premiums. If you prefer brand names over generics, be prepared to pay hefty coinsurance costs or copays.

Brokers are like the matchmakers of insurance. They help buyers find and enroll in the right insurance plan to suit their needs.

This is one of the tiers of health insurance plans under the ACA and usually offers lower monthly premiums but higher out-of-pocket costs for healthcare services.

Bundled plans combine different types of insurance coverage, like health, dental, and vision, into one convenient plan.

The Consumer Operated and Oriented Plan program, or CO-OP, is designed to provide nonprofit, member-governed health insurance options.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers and their families to continue their employer-sponsored health insurance coverage temporarily after leaving a job, usually at a higher cost.

With respect to health insurance, a cancellation refers to the termination of the insurance policy or coverage either by the insurance company or the insured person before the end of the period of coverage.

This type of insurance provides financial support if someone is diagnosed with cancer. It helps cover treatment costs, including medical bills, medications, and other related expenses.

This alternative payment model is like a flat-rate subscription for healthcare services. Capitation is a payment method in which healthcare providers receive a fixed amount per patient to cover all necessary medical services. Primary care physicians or integrated hospital-insurer networks will manage total care for a large patient group under an agreed-upon capitated rate paid upfront on a monthly basis by associated health plans. This prepaid lump sum remains the same per member regardless of utilization levels or whether they are healthy versus battling complex diseases. By prepaying for expected care expenses based on large-scale projections, this system incentivizes efficient preventative services over costly acute treatments.

A carrier is another name for an insurance company that offers insurance coverage, manages policies, and pays for covered services.

When prolonged hospitalizations or complex chronic illnesses lead to intensive ongoing care needs, case management helps coordinate treatments with medical teams, health plan administrators, patients, and family caregivers. These patient-centered services aim to optimize recovery outcomes and quality of life while managing the runaway costs of ambulant visits, home therapies, community care referrals, special equipment acquisition, etc. Case managers help enhance continuity and reduce duplication and contradictions across multi-specialist providers.

These are high-deductible health plans designed for young or healthy individuals, offering minimal coverage but protection in cases of severe medical emergencies or accidents.

CMS is the federal agency that provides health coverage to more than 160 million through Medicare, Medicaid, the Children's Health Insurance Program, and the Health Insurance Marketplace.

Proof of a person’s current or most recent insurance policy details will come via this official document, usually provided when coverage ends or changes. It provides evidence that legally entitles you to enroll in another individual or group health plan without exclusions or waiting periods imposed based on preexisting conditions. Certificates list the start and end dates, covered dependents, prior payer contact info, policy numbers, etc.

Think of this as the membership card for an insurance policy. It is a document that confirms your coverage details, such as the type of insurance, coverage period, and benefits included.

CHIP provides low-cost health coverage for children in families who earn too much to qualify for Medicaid but cannot afford private insurance.

The claim is a request for payment submitted by a healthcare provider to an insurance company for services provided to a patient.

Since health insurance is a contract, it includes clauses. A clause in this context refers to the financial responsibility of the insurance company to the policyholder as stipulated in the contract.

A list of medications (formulary) which may limit drugs to specific physicians, patient care areas, or disease states via formulary restrictions.

Think of this as cost-sharing in a joint venture. It is the percentage of healthcare costs you share with your insurance company after you have paid your deductible.

In terms of insurance, a commission is a fee in a percentage of the premium that an insurance company pays an insurance agent in exchange for soliciting applications for insurance for the company.

A rule that prevents health insurers from varying premiums within a geographic area based on age, gender, health status or other factors.

A composite rate is an insurance premium based on the average risk profile of a group rather than the risk profile of an individual policyholder. A composite rate implies that all members of a particular group pay the same insurance premium for coverage.

Comprehensive coverage includes a wide range of healthcare services and treatments, offering extensive protection against various health issues.

Coordination of Benefits (COB) refers to the rules that determine the primary plan and the secondary plan when an insured has two or more policies covering the same risks. It prevents insurers from overpaying for claims.

Copayments are fixed amounts paid for specific services covered by insurance, often due at the time of service.

This involves sharing expenses between an insured person and their insurance company, including deductibles, copayments, and coinsurance.

A subsidy for eligible individuals or families to reduce out-of-pocket costs such as deductibles, copayments, and coinsurance. If you qualify, you must enroll in a plan in the Silver category to get the extra savings.

Every policy will list exclusions, or services they don’t cover. Certain prescription meds, alternative treatments, extremely high-cost new therapies, or experimental procedures will almost never be included. Say you want LASIK eye surgery? Most health plans strongly resist covering these vision enhancements as a "non-essential benefit.” Digging through exclusions upfront helps avoid unpleasant surprise bills later.

This term refers to the comprehensive list of medical care, tests, treatments, therapies, and services covered by your health insurance. Everything from preventive scans to complex surgery may fall under this umbrella, as long as it's deemed medically necessary.

Like a safety net for tough times, this insurance policy pays a lump sum or provides a benefit if the insured person is diagnosed with a serious illness such as cancer, stroke, or heart attack.

A deductible is an out-of-pocket fee that an insured needs to pay as part of their insurance coverage. If an insured has a loss, they need to pay up to their deductible limit first before their insurance policy will cover the rest of the damages.

This is a retirement plan in which an employer promises specific benefits upon retirement, often including healthcare coverage.

A claim denial occurs when an insurance company refuses to pay for specific services or treatments outlined in a claim.

This program offers discounts on dental services for an annual fee but does not provide insurance coverage.

Because dental care is usually not included in primary health insurance, purchasing supplemental insurance, such as a dental plan, is necessary. It helps cover the cost of dental care and treatments, including routine check-ups, cleanings, fillings, and more.

These are like the plus-ones on an insurance plan. Dependents, such as children or spouses, are covered by someone else's health insurance policy.

This term refers to one of the features available to all members of HealthBird. The digital medicine cabinet is a feature that allows our members to search, add, and keep track of their prescriptions, medications and supplements.

This is a healthcare model in which patients pay a monthly fee directly to a primary care physician for comprehensive primary healthcare services without involving insurance companies.

Policyholders usually pay their premiums in advance. However, insurance companies do not immediately account for these premiums in their earnings. Rather, they earn the premium at even rates throughout the term of the policy. Therefore, the portion of premium that applies to the expired portion of the policy becomes the earned premium. Similarly, the portion of premium received that applies to the remaining term of the policy becomes the unearned premium reserve.

Think of this as the express lane for insurance sign-up. It's a simplified process that makes it easier for individuals to enroll in health insurance plans without complex paperwork or hurdles.

Easy pricing refers to transparent and straightforward pricing structures for healthcare services or insurance plans, helping consumers understand costs easily.

This is the start date for a person’s insurance coverage. It's the date when your insurance policy becomes active and starts providing coverage for healthcare services.

This refers to the number of individuals who have successfully enrolled in a health insurance plan and have active coverage.

EHRs are electronic versions of patients' medical records containing information about their health history, treatments, medications, and more. They are accessible to healthcare providers.

EMRs contain patients' medical information as recorded by a specific healthcare provider or facility, aiding patient care within that practice or institution.

Eligibility requirements, in the context of insurance, are requirements that an individual must meet in order to qualify for an insurance policy.

An eligibility period is the time frame following the eligibility date, usually 31 days, during which potential members of a group may enroll in a benefits program, e.g. health insurance, life insurance, or disability insurance, without evidence of insurability.

An embedded deductible is a feature in family health insurance plans that allows each member to have their own individual deductible within the overall family deductible.

Both urgent care and emergency rooms provide medical care, but they serve different levels of urgency. The emergency room is for life-threatening emergencies that require immediate medical attention, such as chest pain, difficulty breathing, severe bleeding, broken bones, head injuries, seizures, and poisoning. It provides a wider range of services than urgent care, including CT scans, MRIs, surgery, and intensive care, but has longer wait times and higher costs. The emergency room is open 24/7.

It's a provision under the ACA that requires certain employers to provide health insurance coverage to their employees or face penalties.

This is a penalty imposed on certain large employers if they fail to provide their employees with affordable health insurance that meets minimum coverage standards.

This is like a rulebook for employers regarding health insurance. It outlines the obligations and requirements for certain large employers under the Affordable Care Act to offer health insurance to their employees.

Tax credits are available to small businesses that provide health insurance coverage to their employees, helping offset the costs.

This refers to employers' health insurance plans, which typically provide group coverage at more affordable rates.

These are health insurance plans employers offer their employees, sometimes with multiple options based on individual needs.

An enrollment period is a specific time period during which a person can get health insurance, make changes in their policy, or qualify and apply for government subsidies.

Essential health benefits are a set of services that health insurance plans must cover, including preventive care, prescription drugs, and maternity care, as required by the ACA.

An exclusion refers to specific medical conditions, services, or treatments not covered by an insurance policy.

This is a statement sent by an insurance company to the insured person explaining the healthcare services provided, the amount paid by the insurance, and any remaining costs the patient owes.

The family glitch is a rule that prevents some families with employer-sponsored health insurance from receiving financial assistance for marketplace coverage. It happens when the employer's coverage is considered "affordable" for the employee, even if it's not affordable for the entire family. This makes marketplace coverage too expensive for many families, leaving them with limited options.

The FPL sets income thresholds used to determine eligibility for various healthcare programs under the Affordable Care Act (ACA). It helps decide who qualifies for subsidies, Medicaid, or CHIP by comparing household income to these set levels. In 2023, 400% above the FPL represents an income of $111K for one person or $228K for a family of four.

The FFM is an online platform the federal government runs where individuals and families can compare, shop for, and enroll in health insurance plans. It serves as a marketplace for different insurance options.

This is a payment model in which healthcare providers charge for each service or treatment they provide.

A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Fiduciaries are persons or organizations that act on behalf of others and are required to put the clients’ interests ahead of their own.

A final internal adverse benefit determination involves a medical condition where the timeframe for completion of a standard external review would seriously jeopardize the life or health of the claimant or would jeopardize the claimant's ability to regain maximum function, or if the final internal adverse benefit determination concerns an admission, availability of care, continued stay or health care service for which the claimant received emergency services, but has not been discharged from a facility.

An FSA is a savings account you can contribute to from your paycheck before taxes. You can use this money for qualified medical costs like copayments, deductibles, and some over-the-counter items. Notably, FSAs are tax-free.

A drug formulary is a list of drugs approved by a health insurance provider, categorized by cost.

The Free Look Period allows you to review your insurance policy after purchasing it. If you change your mind within this period, you can cancel the policy and get a refund without penalties.

This is a measure employers use to determine whether they're required to offer health insurance under specific laws. It's calculated by adding up all the hours part-time employees work and converting them into the equivalent of full-time employees.

A gatekeeper is a healthcare provider who is the first point of contact for patients, and who decides what level of care the patient will get next. Oftentimes, primary care physicians are gatekeepers in the healthcare system.

General agents are insurance agents who sell insurance products to other insurance agents or brokers. The other insurance agents and brokers then sell these products to the people or companies who will be using the insurance. General agents act as insurance wholesalers as opposed to insurance retailers.

Once a brand-name drug's patent expires, other companies can offer the same medication at a lower cost as a generic drug. These alternative versions contain the same active ingredients and work just as effectively but without the hefty brand-name price tag. Choosing generic drugs is a smart way to manage your healthcare expenses while still getting the necessary medication.