65 terms, grouped alphabetically. If a word you are looking for is missing, or a definition raises a question about your own coverage, ask a licensed agent and we will walk through it with you.
A
- Actuarial value
- The share of covered medical costs a plan is designed to pay for a standard population, expressed as a percentage. It is what the metal tiers describe: roughly 60 percent for Bronze, 70 for Silver, 80 for Gold, and 90 for Platinum. It is not a promise about your own bills, because your costs depend on the care you actually use.
- Advance premium tax credit
- A premium tax credit paid directly to your insurance company each month so your bill is lower right away, instead of waiting to claim the whole credit when you file taxes. Because it is based on your estimated income, you reconcile it on your federal return, so tell the marketplace when your income or household changes.
- Allowed amount
- The maximum a plan will count as payable for a covered service. In network, the allowed amount is the rate the insurer and the provider agreed to, and your coinsurance is calculated from it. Out of network, there is no agreed rate, so the provider may bill you for the difference.
- Appeal
- A formal request asking your plan to reconsider a denied claim or a denied service. Plans have to tell you why they denied something and how to appeal, and there are deadlines on both sides. If the internal appeal fails, most plans also have to offer an independent external review.
B
- Balance billing
- When an out-of-network provider bills you for the difference between what they charged and what your plan paid. Federal law now bans it in most emergencies and for many out-of-network providers who treat you at an in-network facility.
- Broker
- A licensed insurance professional who helps you compare and enroll in plans. Brokers are paid a commission by the insurance company, which is already built into the premium the insurer files with regulators, so the same plan costs the same whether you buy it with help or on your own.
C
- Catastrophic plan
- A marketplace plan with a very high deductible and a low premium, available only to people under 30 or to people of any age with a hardship or affordability exemption. It covers the essential health benefits and three primary care visits before the deductible, but premium tax credits cannot be applied to it.
- CHIP
- The Children Health Insurance Program, which covers children in families that earn too much for Medicaid but cannot easily afford private coverage. Each state runs its own program, and like Medicaid you can apply in any month of the year.
- Claim
- The bill a provider sends to your insurance company after you get care. The plan processes it, pays its share, and sends you an explanation of benefits showing what you owe.
- COBRA
- A federal law that lets many people keep their employer health plan for a limited time after leaving a job or losing eligibility, usually 18 months. The coverage is the same, but you pay the full premium plus an administrative fee, so it is often far more expensive than it was through payroll.
- Coinsurance
- The percentage of the allowed amount you pay for a covered service after you have met your deductible. If your coinsurance is 20 percent and the allowed amount is $200, you pay $40 and the plan pays the rest.
- Coordination of benefits
- The rules that decide which plan pays first when someone is covered by more than one plan, for example a child on both parents policies. The first plan pays up to its limits, then the second considers what is left.
- Copayment
- A flat dollar amount you pay for a specific covered service, such as $30 for an office visit. Copays can apply before or after the deductible depending on the plan, and they usually count toward your out-of-pocket maximum.
- Cost sharing
- The umbrella term for what you pay out of pocket for covered care: deductibles, copayments, and coinsurance. Your monthly premium is not cost sharing.
- Cost-sharing reduction
- Extra savings that lower your deductible, copays, coinsurance, and out-of-pocket maximum on a marketplace plan. They depend on your household income and they apply only if you enroll in a Silver plan.
D
- Deductible
- The amount you pay for covered services in a plan year before the plan starts paying its share. Some services, such as in-network preventive care and often primary care or generic drugs, are covered before you meet it.
- Dependent
- A spouse, domestic partner, or child covered under someone else policy. Under federal law, plans that offer dependent coverage must let children stay on a parent plan until they turn 26, whether or not they live at home, are married, or are in school.
- Durable medical equipment
- Reusable medical equipment prescribed for use at home, such as a wheelchair, walker, nebulizer, CPAP machine, or blood sugar monitor. Plans usually require it to be medically necessary and often require prior authorization.
E
- Effective date
- The day your coverage actually starts. It is often the first of a month, and it is not the day you enrolled, so check it before you schedule care.
- Emergency services
- Care for a condition severe enough that a reasonable person would expect serious harm without immediate treatment. Plans must cover emergency care without prior authorization and cannot charge you a higher cost share for going to an out-of-network emergency room.
- Essential health benefits
- The ten categories every Affordable Care Act plan must cover: outpatient care, emergency services, hospitalization, pregnancy and newborn care, mental health and substance use treatment, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive and chronic disease care, and pediatric services including dental and vision for children.
- Excluded service
- Something your plan does not cover at all. Excluded services do not count toward your deductible or your out-of-pocket maximum, so it is worth reading the exclusions list before you assume something is covered.
- Explanation of benefits
- The statement your insurer sends after processing a claim, showing what the provider charged, what the plan allowed, what it paid, and what you owe. It is not a bill. Compare it to the bill the provider sends and call your plan if the two disagree.
- Exclusive provider organization
- An EPO plan. You generally do not need a referral to see a specialist, but the plan pays almost nothing for care outside its network except in an emergency.
F
- Federal poverty level
- An income measure published each year by the federal government and used to decide eligibility for Medicaid, CHIP, premium tax credits, and cost-sharing reductions. Eligibility rules are usually written as a percentage of it, and the figures change every January.
- Formulary
- The list of prescription drugs a plan covers, usually sorted into tiers that determine what you pay. Formularies can change during the plan year, so check yours before you fill a new prescription.
G
- Generic drug
- A drug approved as having the same active ingredient, strength, and intended effect as a brand-name drug, sold after the brand patent expires. Generics sit on the lowest cost tier of most formularies.
- Good faith estimate
- A written estimate of expected charges that providers must give people who are uninsured or paying without using insurance, before scheduled care. If the final bill comes in substantially higher, there is a federal dispute process you can use.
- Grace period
- The time you have to catch up on a missed premium before coverage ends. Marketplace enrollees who receive a premium tax credit and have paid at least one month get a three-month grace period, though claims in the second and third month may be held. Without a tax credit, the grace period is set by your plan contract and state law and is usually much shorter.
- Grandfathered plan
- An individual or group plan that existed on March 23, 2010 and has not changed much since. These plans are exempt from some Affordable Care Act rules, though they still cannot impose lifetime dollar limits on essential benefits or refuse to cover children up to age 26.
H
- Habilitative services
- Care that helps someone learn, keep, or improve skills they did not fully develop, such as speech or occupational therapy for a child. It is different from rehabilitative care, which helps restore skills that were lost.
- Health maintenance organization
- An HMO plan. You usually pick a primary care doctor, need referrals to see specialists, and have no coverage outside the network except in an emergency. Premiums tend to be lower in exchange for the tighter network.
- Health savings account
- A tax-advantaged account you can contribute to only while you are enrolled in a qualified high deductible health plan. Contributions are tax-deductible, growth is untaxed, withdrawals for qualified medical expenses are untaxed, and the balance rolls over year to year and stays yours if you change jobs.
- High deductible health plan
- A plan whose deductible and out-of-pocket limits meet the federal thresholds that make you eligible to contribute to a health savings account. The thresholds are set by the IRS and adjusted each year.
I
- In network
- A provider or facility that has a contract with your plan setting the rate they can charge for covered services. Staying in network is the single most reliable way to avoid an unexpected bill.
- Inpatient care
- Care you receive after being formally admitted to a hospital. Being kept overnight for observation is not the same as being admitted, and the distinction can change what you pay, especially under Medicare.
- Issuer
- The insurance company that sells and stands behind the plan. The issuer, not the marketplace or the agent, decides claims, sets the network, and publishes the plan documents.
M
- Medicaid
- A joint federal and state program that covers people with limited income and resources. Each state sets its own eligibility rules within federal limits, and there is no enrollment window, so you can apply at any time of year.
- Medically necessary
- Care that a plan considers appropriate for diagnosing or treating a condition and consistent with accepted standards of medicine. Plans use this standard to decide what they will pay for, and you can appeal when you disagree with the decision.
- Medicare
- The federal health program for people 65 and older and for some younger people with disabilities or end-stage renal disease. Part A covers hospital care, Part B covers outpatient care, Part C is Medicare Advantage, and Part D covers prescription drugs.
- Medigap
- Medicare Supplement insurance sold by private companies to help pay the deductibles and coinsurance that Original Medicare leaves to you. Medigap works alongside Original Medicare and cannot be combined with a Medicare Advantage plan.
- Metal tier
- The Bronze, Silver, Gold, and Platinum labels on marketplace plans. They describe how you and the plan split covered costs, not the quality of care or the size of the network. All four tiers cover the same essential health benefits.
N
- Network
- The set of doctors, hospitals, pharmacies, and other providers a plan has contracted with. Networks vary widely between plans sold by the same insurer, and they can change during the year.
O
- Open enrollment
- The yearly window when you can enroll in or change a plan without needing a special reason. For marketplace coverage it runs from November 1 through January 15 in most states, and several state-run marketplaces set a later deadline. Employers and Medicare each have their own separate windows.
- Out-of-pocket maximum
- The most you will pay for covered in-network care in a plan year. Once your deductible, copays, and coinsurance add up to it, the plan pays 100 percent of covered in-network services for the rest of the year. Premiums, out-of-network charges, and non-covered services do not count toward it.
- Outpatient care
- Care you get without being admitted to a hospital, including office visits, same-day surgery, imaging, and most lab work.
P
- Point of service plan
- A POS plan, which blends HMO and PPO features. You generally choose a primary care doctor and need referrals, but the plan still pays something toward out-of-network care.
- Preferred provider organization
- A PPO plan. You can see specialists without a referral and the plan pays part of the cost for out-of-network care, usually at a higher cost share than in network. Premiums tend to be higher than an HMO.
- Premium
- What you pay each month to keep coverage, whether or not you use any care. It does not count toward your deductible or your out-of-pocket maximum.
- Premium tax credit
- A federal tax credit that lowers what you pay for a marketplace plan. Eligibility and the amount depend on your household income, household size, where you live, and the cost of the benchmark plan in your area. It is available only for plans bought through the marketplace.
- Preventive services
- Screenings, immunizations, and well visits that Affordable Care Act plans must cover with no copay, coinsurance, or deductible when you use an in-network provider. If a preventive visit turns into diagnosis or treatment, the visit can be billed as diagnostic care and normal cost sharing applies.
- Primary care provider
- The doctor, nurse practitioner, or physician assistant who handles your routine care, coordinates referrals, and knows your history. HMO and most POS plans ask you to name one.
- Prior authorization
- Approval from your plan before you get certain services, procedures, or drugs. The provider office normally submits the request, but a service that needed approval and did not get it can be denied, so it is worth confirming it went through.
Q
- Qualified health plan
- A plan certified by a marketplace as meeting Affordable Care Act requirements, including the essential health benefits and limits on cost sharing. Only qualified health plans bought through the marketplace can use a premium tax credit.
- Qualifying life event
- A change that opens a special enrollment period outside of open enrollment: losing other coverage, moving, marriage or divorce, a birth or adoption, and certain income or immigration status changes. You generally have 60 days from the event to enroll, and you may have to document it.
R
- Referral
- Written approval from your primary care doctor to see a specialist. HMO and most POS plans require one, and a specialist visit without a referral may not be covered.
- Rider
- An addition to a policy that changes what is covered, either adding a benefit or excluding a specific condition. Riders are more common on non-ACA products such as short-term and supplemental policies.
S
- Short-term limited duration insurance
- A temporary policy that does not have to follow Affordable Care Act rules. It can turn you down or charge more for a pre-existing condition, exclude conditions you already have, and leave out benefits such as maternity, mental health, or prescription drugs. Read the exclusions before relying on one.
- Special enrollment period
- A window outside open enrollment when you can sign up for or change a plan because of a qualifying life event. It usually lasts 60 days from the event for marketplace coverage and about 30 days for job-based coverage.
- Specialist
- A physician focused on one area of medicine, such as a cardiologist, dermatologist, or endocrinologist. Whether you need a referral first depends on your plan type.
- Summary of Benefits and Coverage
- A standardized document every plan has to provide, written to the same format so you can compare plans side by side. It lists the deductible, out-of-pocket maximum, what you pay for common services, and worked cost examples.
T
- Telehealth
- A visit with a clinician by video or phone rather than in person. Most plans cover it, though what you pay and which services qualify vary, and state licensing rules can affect who is allowed to treat you.
- Tier
- A cost level on a drug formulary or in a provider network. Lower tiers cost you less. Moving a drug to a higher tier during the year is one of the more common surprises on a renewal notice.
U
- Urgent care
- Treatment for a condition that needs prompt attention but is not an emergency, such as a sprain, a rash, or a fever. It usually costs far less than an emergency room visit, and most plans have a separate copay for it.
W
- Waiting period
- A stretch of time before a specific benefit becomes available. Job-based plans may have one before coverage starts, and dental plans commonly have one before major work such as crowns or bridges is covered.
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Where these words show up
Three documents worth reading before you enroll.
Most of the terms on this page appear in the same three places. Knowing what each document is for makes the vocabulary a lot easier to hold on to.
- Summary of Benefits and Coverage
- A standardized four-page summary every plan must publish in the same format, so you can compare two plans line by line. It gives the deductible, the out-of-pocket maximum, what you pay for common services, and worked examples.
- Evidence of coverage or policy document
- The full contract. Longer and less friendly than the summary, but it is where exclusions, prior authorization rules, and appeal deadlines are actually spelled out.
- Explanation of benefits
- What arrives after you get care. It is not a bill. Read it against the provider bill, and if the two disagree, call the number on your member ID card.
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