Capitation
A method of paying medical providers through a pre-paid, flat monthly
fee for each covered person. The payment is independent of the number
of services received or the costs incurred by a provider in furnishing
those services.
COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly
known as COBRA, requires group health plans with 20 or more employees
to offer continued health coverage for you and your dependents for
18 months after you leave your job. Longer durations of continuance
are available under certain circumstances. If you opt to continue
coverage, you must pay the entire premium, plus a two percent administration
charge.
Coinsurance
The amount you are required to pay for medical care in a fee-for-service
plan or preferred provider organization (PPO) after you have met your
deductible. The coinsurance rate is usually expressed as a percentage
of billed charges. For example, if the insurance company pays 80 percent
of the claim, you pay 20 percent.
Copayment
A cost sharing arrangement in which a person pays a specific charge
for a specific medical service -- say $20 for an office visit or $10
for a prescription.
Deductible
The amount of money you must pay upfront each year to cover your medical
care expenses before your insurance policy starts paying.
Exclusions
Specific conditions or circumstances for which the health insurance
policy will not provide benefits.
Fee-for-Service
A payment system (sometimes called an indemnity plan) for healthcare
in which the provider is paid for each service rendered. You can
use any doctor or hospital of your choice. Usually, you pay a yearly
deductible ($100, $250, etc.) and a co-pay percentage (say, 20%
of the next $5,000). The insurance company pays the other 80% and,
then, 100% thereafter.
Health Maintenance Organization - HMO
Prepaid health plan in which you pay a monthly premium and the HMO
covers your doctor visits, hospital stays, emergency care, surgery,
preventive care, checkups, lab tests, X-rays, and therapy. You must
choose a primary care physician who coordinates all of your care
and makes referrals to any specialists you might need. In an HMO,
you must use the doctors, hospitals and clinics that participate
in your plan's network.
Lifetime Limit
A cap on the benefits paid under a policy. For example, a lifetime
limit of $1 million means that the insurer agrees to cover up to
$1 million in covered services over the life of the policy.
Managed Care
An organized way to manage costs, use and quality of the health
care system. The major types of managed care plans are health maintenance
organizations (HMO), point-of-service (POS) plans and preferred
provider organizations (PPO).
Medicaid
A joint federal-state health insurance program that is run by the
states and covers certain low-income people (especially children
and pregnant women) and disabled people.
Medicare
The federally sponsored health insurance program of hospital and
medical insurance primarily for people age 65 and over.
Medical Savings Accounts - MSA
These health insurance plans provide incentives for individuals
to replace high premium, low-deductible policies with affordable,
high deductible catastrophic coverage. Premiums for this coverage
are lower and the savings may be used to fund a tax-preferred medical
savings account from which you can pay on a pre-tax basis for qualified
medical care and expenses, including annual deductibles and copayments.
Out of-Pocket Maximum
The most money you will be required to pay in a year for deductibles
and coinsurance. It is a stated dollar amount set by the insurance
company, in addition to regular premiums.
Point of Service
A type of managed care plan combining features of a health maintenance
organizations (hmo) and a preferred provider organization (ppo),
in which individuals decide whether to go to a network provider
and pay a flat dollar copayment (say $10 for a doctor's visit),
or to an out-of-network provider and pay a deductible and/or a coinsurance
charge.
Portability
The ability for an individual to transfer from one health insurer
to another health insurer with regard to pre-existing conditions
or other risk factors.
Pre-authorization
A cost containment feature of many group medical policies whereby
the insured must contact the insurer prior to a hospitalization
or surgery and receive authorization for the service.
Pre-existing Condition
A health problem that existed before the date your insurance became
effective. Many insurance plans will not cover preexisting conditions.
Some will cover them only after a waiting period.
Preferred Provider Organization - PPO
A network of health care providers with which a health insurer has
negotiated contracts for its insured population to receive health
services at discounted costs. Health care decisions generally remain
with the patient as he or she selects providers and determines his
or her own need for services. Patients have financial incentives
to select providers within the ppo network.
Premium
The amount you or your employer pays in exchange for health insurance
coverage.
Primary Care Physician
Under a health maintenance organization, hmo, or point-of-service
plan, pos, usually your first contact for health care. This is often
a family physician, internist, or pediatrician. A primary care physician
monitors your health, treats most health problems, and refers you
to specialists if necessary.
Provider
Any person (doctor or nurse) or institution (hospital, clinic or
laboratory) that provides medical care.
Third-Party Payer
Any payer of health care services other than you. This can be an
insurance company, an HMO, a PPO or the federal government.
Usual and Customary Charge
The amount a health insurance plan will recognize for payment for
a particular medical procedure. It is typically based on what is
considered "reasonable" for that procedure in your service area.
Utilization Review
A cost control mechanism by which the appropriateness, necessity
and quality of healthcare services are monitored by both insurers
and employers. |
