Insurance terms

Welcome to our terminology page! Here, you'll find a comprehensive list of key terms and definitions relevant to the health insurance space.
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Obamacare

This is another name for the Affordable Care Act (ACA), which aimed to make healthcare more accessible and affordable. It introduced features like marketplaces, subsidies, and protections against denial based on pre-existing conditions.

Obamacare Metal Plans

These plans come in different tiers — bronze, silver, gold, and platinum — each with varying costs and coverage levels. Bronze plans usually have lower premiums but higher out-of-pocket costs, while platinum plans have higher premiums but lower out-of-pocket expenses.

Off-Exchange Health Insurance Plan

These are health plans bought directly from insurance companies or brokers outside the official Health Insurance Marketplace. They might offer similar coverage but without marketplace perks like tax credits.

Open Access Plan

With these plans, you don't need a referral to see specialists; you can directly access them within your network.

Open Enrollment

This is the window of opportunity for you to get insurance and receive subsidies. Open Enrollment is when individuals can enroll in or change health insurance plans. It's a designated time frame each year to sign up for coverage through the Health Insurance Marketplace or employer-sponsored plans.

Out-of-Area Coverage

This coverage helps when you're away from your usual network area. It ensures you're still covered when you are traveling.

Out-of-Network

Out-of-network refers to healthcare providers who don't have agreements with your insurance company. Getting services from out-of-network providers may result in higher costs or lower coverage except in the case of specific emergencies. You trade higher costs for flexibility.

Out-of-Network (Out-of-Plan)

These are healthcare providers who are not in the network of your insurance plan. Seeing them might mean paying more from your own pocket, since they don't have agreements with your insurer for discounted rates.

Out-of-Pocket Costs

These are your expenses beyond the premium you pay. Out-of-pocket costs are the expenses you pay for healthcare services not covered by insurance. This includes deductibles, copayments, and coinsurance and can have limits like an out-of-pocket maximum.

Out-of-pocket Maximum

This refers to the most you will pay for covered health care in a year. After you hit this limit, your insurance covers 100% of costs.

Outpatient

These are any healthcare services or treatments that don't require you to stay overnight in a hospital.

Over-the-Counter (OTC) Drugs

These are medications you can buy without a prescription. They are available at pharmacies or online for common health issues such as headaches or colds. Whether your health insurance covers the cost of over-the-counter medications depends on several factors, like the type of health insurance plan, the type of OTC drug, and whether a doctor prescribes the medicine. Ultimately, the best way to determine whether your health insurance plan covers OTC medications is to contact your insurance company directly.
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ACA-Compliant Coverage

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.

Accident Insurance

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.

Accountable Care Organization

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

Actuary

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.

Admitting Privilege

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

Adjuster

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.

Advance Care Planning Consultations

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.

Advance Directive

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.

Advance Insurance Premium Payment

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.

Advance Premium Tax Credit

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

Adverse Determination

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

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.

Affordable Care Act (ACA)

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.

Agent

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.

Allowed Amount

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.

American Rescue Plan

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.

Annual Limit

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.

Appeal

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.

Application (App)

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.”

Association Health Plan

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.

Authorized Representative

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.
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Balance Billing

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.

Benchmark Plan

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.

Beneficiary

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.

Benefit Cap

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.

Benefits Year

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.

Book of Business

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.

Brand-Name Drugs

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.

Broker

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

Bronze Plan

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 Plan

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