Health Insurance Glossary

Carrier
Companies that provide insurance policies are referred to as carriers. Blue Cross, Blue Shield, and Assurant are examples of carriers. Some insurance agents only represent one carrier, while others quote policies from several.

Health Life Group Short-Term
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Co-insurance
The fixed percentage of medical expenses that you are responsible for paying under a plan is call co-insurance. For example, you may have a plan that pays 80% of the cost of medical care, with you being responsible for the remaining 20%. Co-insurance usually goes into effect after the deductible has been met.

Co-payment
A fixed dollar amount that you have to pay when receiving medical services is called a co-payment. Co-payments are in effect from the moment your coverage starts. The co-payments you make usually go toward meeting your deductible.

Deductible
The deductible is an amount of money that has to be paid before full coverage goes into effect. Some plans have deductibles of several thousand dollars, while most HMO plans have no deductible.

Exclusive Provider Organization (EPO)
An Exclusive Provider Organization is a managed care plan that provides a network of providers. In an EPO plan, no coverage is provided for care received from providers outside the network.

Fee-For-Service Plan (FFS)
One of the more common traditional health insurance plans, a Fee-For-Service plan lets you make all healthcare decisions independently. You can seek care from any provider, and submit claims to your insurance company to be reimbursed for that care.

Formulary
A formulary is a list of drugs that a health insurance plan will cover. People who depend on prescription drugs should review a plan’s formulary carefully before enrolling, to make sure that the needed medicines are covered.

Health Maintenance Organization (HMO)
Health Maintenance Organizations are a form of managed care. In an HMO plan, all care is approved by a primary care physician. The primary care physician provides referrals to specialists as needed. HMO plans usually have no deductibles and no lifetime maximums. HMOs don’t provide coverage for any care that isn’t approved, or for any care that is received from a provider outside their network.

Health Savings Account (HSA)
Health Savings Accounts are tax-advantaged bank accounts that allow you to save money for medical expenses. HSAs are used in conjunction with High Deductible Health Plans.

High Deductible Health Plan (HDHP)
A High Deductible Health Plan is any health insurance policy with a deductible of more than $1,050 for an individual or $2,100 for a family. HDHPs feature low monthly premiums, and can be used with an HSA to help you save money on your health expenses.

Managed Care
Managed care refers to a class of health insurance plans that focus on quality, cost-effective health care. Unlike traditional health insurance — in people sought care and were reimbursed for it — managed care requires health expenses to be approved by a primary care physician or by the plan administrators. PPOs and HMOs are the two most common kinds of managed care plans.

Maximums
Maximums are the total amount the health insurance policy will pay out. Yearly maximums are the limit on benefits for a single year. Lifetime maximums are the limit on benefits for the entire duration of the policy.

Out-Of-Pocket Costs
The out-of-pocket cost is the total amount that you have to pay for health care under your policy.  Your out-of-pocket costs include your premiums, deductibles, and co-payments.

Over-The-Counter Drugs (OTC)
Over-the-counter drugs are medicines available without a prescription. Examples include cold medicines and painkillers.

Preferred Provider Organization (PPO)
A Preferred Provider Organization is a kind of managed care health plan. PPO plans feature large networks of healthcare providers, and don’t require a referral from your primary care physician to see a specialist. PPO plans will also usually provide some coverage for care received outside the provider network.

Premium
The premium is the monthly cost of an insurance policy. Plans with lower deductibles usually have higher premiums.

Preventive Care
Preventive care is care given by your doctor or primary care physician aimed at keeping you healthy and treating health issues before they turn into serious problems.

Primary Care Physician
In managed care plans, a Primary Care Physician is the doctor you see on a regular basis. Primary Care Physicians are responsible for diagnosing and treating regular health issues, and referring you to specialists for other health issues.

Provider network
In managed care plans, the provider network is the group of doctors, hospitals, and other healthcare professionals who have agreed to work with the plan. In HMO plans, no coverage is provided for care received outside the provider network. In PPO plans, some coverage is provided, but you’ll save more by getting care within the network.