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.
Coordination of Benefits
A system to eliminate duplication of benefits when you are covered under more than one group plan. Benefits under the two plans usually are limited to no more than 100 percent of the claim.
Copayment
Another way of sharing medical costs. You pay a flat fee every time you receive a medical service (for example, $5 for every visit to the doctor). The insurance company pays the rest.
Covered Expenses
Most insurance plans, whether they are fee-for-service, HMOs, or PPOs, do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy.
Deductible
The amount of money you must pay each year to cover your medical care expenses before your insurance policy starts paying.
Exclusions
Specific conditions or circumstances for which the policy will not provide benefits.
Health Maintenance Organization (HMO)
Prepaid health plans. You pay a monthly premium and the HMO covers your doctors' visits, hospital stays, emergency care, surgery, checkups, lab tests, x-rays, and therapy. You must use the doctors and hospitals designated by the HMO.
Lifetime Limit
A cap on the benefits paid under a policy. Many policies have a lifetime limit of $1 million, which 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 (HMOs), point-of-service (POS) plans and preferred provider organizations (PPOs).
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.
Noncancellable Policy
A policy that guarantees you can receive insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.
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
(POS) Plan A type of managed care plan combining features of health maintenance organizations (HMOs) and preferred provider organizations (PPOs), in which individuals decide whether to go to a network provider and pay a flat dollar co-payment (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.
PPO (Preferred Provider Organization)
A combination of traditional fee-for-service and an HMO. When you use the doctors and hospitals that are part of the PPO, you can have a larger part of your medical bills covered. You can use other doctors, but at a higher cost.
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 insurance coverage.
Primary Care Physician
Usually your first contact for health care. This is often a family physician or internist, but some women use their gynecologist. A primary care doctor monitors your health and diagnoses and treats minor health problems, and refers you to specialists if another level of care is needed.
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 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 health care services are monitored by both insurers and employers.
