Insurance Terms

Under the Affordable Care Act (ACA), health plans covering ~80% of medical costs (after premiums) have a gold medal designation. This type of plan includes moderate out-of-pocket costs for enhanced benefits.

A grace period is a window after your insurance premium due date when coverage remains active, even if the payment is late. It's like getting an extension on a deadline without penalties — giving you time to catch up without losing coverage.

A grandfathered plan is an existing health insurance policy in place before the Affordable Care Act (ACA) was enacted in March 2010. These plans are exempt from some ACA requirements, allowing them to keep certain features that newer plans might not have.

A group contract is a health or life insurance contract that covers a group of people, typically employees of the same company.

Group health insurance is coverage an employer or organization provides to its employees or members as a collective group. It offers benefits like medical, dental, or vision coverage to eligible members, often at more affordable rates than individual plans.

Guaranteed issue is a type of life insurance that is issued without requiring the applicant to answer medical questions or undergo a medical examination.

HIPAA stands for Health Insurance Portability and Accountability Act. In a nutshell, it's a law in the United States that protects your medical privacy and ensures you can keep your health insurance even if you change jobs or lose your job.

An HSA is a savings account specifically for medical expenses. It allows individuals with high-deductible health plans to contribute pre-tax income, and withdrawals for qualified medical expenses are tax-free. Plus, the money rolls over year after year.

Legal entitlement to payment or reimbursement for your health care costs, generally under a contract with a health insurance company, a group health plan offered in connection with employment, or a government program like Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).

The Health Insurance Marketplace, established by the ACA, is an online platform where individuals, families, and small businesses can compare, shop for, and enroll in health insurance plans. It offers a range of options and helps individuals find coverage that meets their needs and budget.

The upfront monthly or annual amount you have to pay to maintain enrollment access to coverage benefits through private insurance plans or state marketplaces.

An HMO is a type of health insurance plan that requires you to choose a primary care physician (PCP) and get referrals from them to see specialists. It focuses on preventive care and often has a network of doctors and hospitals you must use for coverage.

HCPCS is a collection of standardized codes that represent medical procedures, supplies, products and services. The codes are used to facilitate the processing of health insurance claims by Medicare and other insurers.

A health care provider is an individual health professional or a health facility organization licensed to provide health care diagnosis and treatment services including medication, surgery and medical devices.

Health care service contractor means any corporation, cooperative group, or association, which is sponsored by or otherwise intimately connected with a provider or group of providers.

Healthcare.gov is the official website created by the federal government, where people can enroll in health insurance plans through the Health Insurance Marketplace. It provides information about available plans, subsidies, and enrollment assistance.

An HDHP is a health insurance plan with a higher deductible than traditional plans. It often comes with lower premiums but requires higher out-of-pocket costs before insurance coverage kicks in.

In-network refers to healthcare providers (doctors, hospitals, etc.) contracted with your insurance company to provide services at negotiated rates. Using in-network providers, who are included in your plan, often results in lower out-of-pocket costs for insured individuals.

Within the healthcare industry, an independent review organization (IRO) acts as a third-party medical review resource which provides objective, unbiased medical determinations that support effective decision making, based only on medical evidence.

The Individual Mandate, a key provision of the Affordable Care Act (ACA), required most Americans to have health insurance coverage or pay a penalty. It aimed to increase the number of people with health insurance to balance risk pools and keep premiums affordable.

Often referred to simply as the “Marketplace” or the “Exchange,” this service helps you shop for and enroll in health insurance for you and your family through websites, call centers and in-person help.

Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company.

An insurance commissioner is a public official in the executive branch of a state or territory in the United States who, along with their office, regulates the insurance industry.

A document detailing the terms and conditions of a contract of insurance.

Like a subscription fee, an insurance premium is the amount you pay, often monthly, to your insurance company to maintain your health coverage. It's the cost of having an insurance policy regardless of whether you use healthcare services.

An insured is a party who is insured against specific perils by either being the holder of an insurance policy or by otherwise being covered.

An insurer is the insurance company or the party that agrees to compensate people, companies or other organizations for specific financial losses. In the case of health insurance, the insurer is the party that agrees to cover some or all of the costs for covered health care services in exchange for a premium.

A lapse is when certain privileges cease to be in effect. In the context of insurance, it usually refers to a cessation of coverage. A lapse of coverage can occur if a policyholder fails to pay the premiums that they owe to the insurer.

Qualifying event refers to a change in a person’s life that affects their insurance coverage. A proof of this change can make that person enroll for coverage suited to their new life in the government-sponsored insurance department in the United States.

A cap on the total lifetime benefits you may get from your insurance company.

This is a cap on the total dollar amount your medical insurance contributes over the entire enrollment span. It could hit limits for pricey care like transplants or gene therapy.

A limit of liability is the most an insurance company would pay a policyholder who loses a lawsuit. The policy terms explain exactly how much. In case the policyholder is sued and owes more than the limit of liability provided in the coverage, they would need to pay the rest for the damages out-of-pocket.

Limitations are the maximum amount of money that an insurance company will pay out for a claim in a policy period. These amounts are typically specified on the insurance policy.

These are extra policies that reimburse people for things like nursing home care, assisted living, or home health care, typically for aging or disabilities requiring custodial help/supervision.

The loss ratio method is a way to calculate how much money an insurance company makes relative to the benefits that it has to pay out. It is used to determine an insurance company’s financial health. The loss ratio equation is as follows: Loss ratio = (Benefits paid out + Adjustment expenses) / Premiums collected

A cost-cutting approach that involves reviewing and controlling the types and frequency of patient medical care through HMOs and preferred provider networks.

Like a safety net for low-income individuals and families, Medicaid is a joint federal and state program that provides health coverage to eligible individuals, offering comprehensive benefits including doctor visits, hospital stays, and long-term care.

Medicare is a federal health insurance program primarily for people aged 65 and older, but also certain younger individuals with disabilities or specific health conditions.

This term refers to the four tiers of coverage under the ACA marketplace, which determine premium and out-of-pocket expense ratios: Bronze, Silver, Gold, and Platinum.

Navigators are experts trained to help people understand the complexities of insurance plans. They can assist in finding the right plan to fit a person’s needs and budget.

Think of this as the circle of healthcare providers in a given insurance plan. A network is a group of doctors, hospitals, and other healthcare providers contracted with an insurance company to provide services to policyholders at negotiated rates.

This act protects people from surprise bills when they unintentionally get care from out-of-network providers, especially during emergencies. It ensures you're not hit with unexpected bills for in-network care from out-of-network providers.

These plans don't meet all the Affordable Care Act (ACA) standards, meaning they might not offer all the benefits or protections you'd get from ACA-compliant plans.

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.

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.

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.

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

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.

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 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.

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.

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.

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.

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

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.

This is the formal name for the healthcare makeover law, also known as Obamacare. It aimed to make healthcare more affordable and accessible by introducing new rules for insurance companies, offering subsidies, and protecting against unfair insurance practices.

Platinum plans, one of the tiers of health insurance plans under the ACA, have higher monthly premiums but lower out-of-pocket costs when you need healthcare services.

Before getting admitted, your doctor might need to certify or confirm that your hospital stay is necessary for your treatment. This step ensures your insurance covers those costs.

Conditions or illnesses you had before getting insurance coverage are pre-existing conditions. Under the ACA, insurers can't deny coverage or charge more due to these conditions.

In PPO plans, you can see any doctor or specialist within the network without needing a referral. Going outside the network might cost you more, but staying in brings more savings.

A premium is the amount you pay, typically monthly, to your insurance company to maintain coverage. It's the insurance policy's cost, regardless of whether you use healthcare services.

Financial help from the government to lower your monthly health insurance costs, calculated based on income levels. For example, if you earn $40,000 per year, you might qualify for a premium subsidy that reduces your monthly premium from $200 to $10.

This tax break is designed to help lower-income people afford health insurance. It's like getting some money back during tax season to help cover the cost of your monthly health insurance premiums.

Your primary care provider is your go-to doctor for routine check-ups, coordinating your care, and referring you to specialists if needed.

Before your insurance approves coverage for particular services or drugs, your doctor might need prior authorization to ensure they're medically necessary.

This is a platform where individuals or businesses can shop for health insurance plans outside the official Health Insurance Marketplace.

Health insurance purchased directly from a private insurance company rather than through a government program. Benefits of private health insurance include a wider choice of doctors and hospitals, more flexibility in coverage, and some services that are not covered by government programs. Drawbacks are that it can be more expensive than government programs, may not cover pre-existing conditions, and may have higher deductibles and copays.

Providers are healthcare professionals who offer medical services. They include doctors, hospitals, clinics, and other healthcare entities providing care and services.

This is where individuals, families, and small businesses can shop for health insurance, often facilitated by the government.

A QHP is a health insurance plan that meets the Affordable Care Act (ACA) standards, offering essential health benefits and consumer protections and meeting certification requirements to be sold on the health insurance marketplace.

This is a benefit that businesses with fewer than 50 employees can offer to help their workers pay for qualified medical expenses, including health insurance premiums.

This refers to health insurance coverage that meets the minimum standards set by the ACA, ensuring individuals comply with the law's requirement of having health insurance.

Under the Affordable Care Act (ACA), a qualifying event refers to a significant life change that allows individuals to enroll in or change their health insurance plans outside the regular enrollment period (OEP). These events might include getting married, having a baby, adopting a child, losing existing health coverage due to reasons like job loss, or experiencing a change in household composition due to divorce or death. Additionally, moving to a new area that offers different health plan options can also be considered a qualifying event. Qualifying events trigger a Special Enrollment Period (SEP), allowing individuals to adjust their health insurance coverage to accommodate the new circumstances. It allows affected individuals and their families to access healthcare coverage or change their existing plans to suit their needs better. The Special Enrollment Period typically lasts for a limited time after the qualifying event, allowing individuals to secure adequate healthcare coverage during these critical life transitions.

A process that looks at activities or products on a regular basis to make sure they are being done at the required level of excellence.

Reasonable and customary fees refer to the standard charges accepted by healthcare providers in a specific geographic area for certain medical services or treatments. These fees are determined based on what healthcare professionals in the region typically charge for similar services, considering factors like the type of service, location, and prevailing market rates. Insurance companies often use these fees as a benchmark to establish the maximum amount they will cover for specific medical procedures or treatments. When a provider's fees exceed the reasonable and customary amount, the patient may be responsible for paying the difference out-of-pocket unless covered by specific insurance arrangements or agreements.

Think of reinsurance as a safety net for insurance companies. It's a way for insurers to protect themselves against excessive losses by transferring some risk to another insurer.

This is the cancellation of an insurance policy retroactively, often due to the insurer claiming misinformation or non-disclosure of important health information by the insured.

These are health plans in which an employer assumes the financial risk of providing healthcare benefits to its employees instead of purchasing a traditional insurance plan.

These plans offer temporary coverage for a limited period, often used as a bridge between more comprehensive plans or during temporary gaps in coverage.

Silver plans, one of the tiers of health insurance plans under the ACA, offer a moderate balance between monthly premiums and out-of-pocket costs. They're the middle-ground option for those seeking decent coverage without paying the highest premiums.

This is a healthcare system in which a single entity, typically the government, is responsible for financing healthcare services for all citizens.

These are health insurance plans designed for businesses with few employees. They often offer group coverage with different options for the employees.

This is a healthcare system in which the government owns or heavily regulates healthcare facilities and pays for medical services, aiming to provide universal healthcare coverage for all citizens.

This is a bonus chance to sign up for health insurance or change your plan outside the usual enrollment period. You can enroll in health insurance if you've had certain qualifying life events, such as losing health coverage, moving to a new area, getting married, having a baby, adopting a child, or experiencing a significant change in income. The Special Enrollment Period typically lasts for a limited time after the qualifying event, allowing individuals to secure adequate healthcare coverage during critical life transitions.

A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions. A non-physician specialist is a provider with more training in a specific area of health care.

These are medications specifically designed to treat complex or chronic conditions. They often require special handling, administration, or monitoring and can be more expensive than typical medications.

These are health insurance plans specifically tailored for students, often offered by colleges or universities to cover medical needs while studying. Even if you can access a student healthcare plan, you can apply for coverage (or stay covered) through the Health Insurance Marketplace.

Subsidies refer to financial assistance from the government to lower the cost of health insurance premiums for eligible individuals and families and make health coverage more affordable. Subsidies are based on income, meaning eligibility and subsidy amount depend on your household earnings, and feature reduced premiums that help make monthly payments more manageable. Subsidies are available through government-run health insurance marketplaces and may vary by state.

These are policies for very specific health coverage, such as dental, vision, or hospitalization, which supplement your health insurance coverage in areas where you need additional support. There are many of these types of policies available, including for hearing care, cancer treatments, hospital expenses, and even final expenses in the event of death.

Telehealth — sometimes called telemedicine — lets your healthcare provider care for you without an in-person office visit. Telehealth is done primarily online with internet access on your computer, tablet, or smartphone. It allows patients to consult with doctors or healthcare professionals remotely using technology, like video calls or phone calls, for diagnosis, treatment, or advice.

This insurance covers medical expenses, trip cancellations, lost luggage, and other unexpected mishaps while traveling, offering peace of mind during a trip.

Underwriters are the people who evaluate the risks and decide whether to approve an insurance application, setting the terms, conditions, and premiums for coverage.

Both urgent care and emergency rooms provide medical care, but they serve different levels of urgency. People should go to urgent care for non-life-threatening injuries and illnesses that require prompt attention, such as sprains and strains, minor cuts and burns, fevers and infections, allergies, earaches and sore throats, urinary tract infections, and minor eye problems. Urgent care offers services like X-rays, lab tests, and stitches and usually has shorter wait times and lower costs than the emergency room. Choosing the right place for your medical needs is important. If you are unsure, always seek professional medical advice.

These are specific benefits for those who served. Veterans Aid and Attendance programs provide benefits and support, including healthcare, to eligible veterans and their families through the Department of Veterans Affairs (VA).

This is an extra protection for unexpected events. Voluntary Accident Insurance provides coverage for medical expenses resulting from accidents, complementing primary health insurance by offering specific accident-related financial benefits. It is a supplemental benefit provided by some employers that helps cover out-of-pocket medical costs associated with accidents that occur outside of work.