Health Insurance Terminology A-Z (Download PDF)

Navigating the complex world of health insurance can often feel like trying to understand a foreign language. With an array of terms and phrases unique to the industry, it’s easy to get lost in the jargon. That’s why we’ve created this essential guide, “Health Insurance Terminology”, complete with a downloadable PDF.

Whether you’re choosing a new policy, managing your existing coverage, or just striving to be more informed, understanding these terms is crucial. In this blog post, we’ll break down the most common and important health insurance terminology in a way that’s clear, concise, and easy to understand.

From “deductibles” to “out-of-pocket maximums,” we’ve got you covered. Plus, don’t forget to download our handy PDF guide for quick reference anytime you need it. Let’s demystify the world of health insurance together!

Related:

1. Life Insurance Terminology
2. Words Associated With Insurance
3. 5-Letter Insurance Words List

Health Insurance Terminology

A

• Accountable Care Organization (ACO): Network of doctors sharing patient care responsibilities.
• Actuarial value: Average portion of costs insurance covers.
• Adverse selection: Insuring high-risk individuals more frequently.
• Affordable Care Act (ACA): US law expanding healthcare access.
• Annual Enrolment Period (AEP): A designated period to choose health plans.
• Annual out-of-pocket maximum: Maximum spending limit on healthcare services.

B

• Balance billing: Charging the patient the remaining bill amount.
• Beneficiary: Person receiving benefits from a policy.
• Benefit period: Time during which benefits are paid.
• Brand-name drug: Medication sold under a trademarked name.
• Broker: Professional who arranges insurance transactions.

C

• Capitation: Payment model per patient, not service.
• Carrier: Company providing or underwriting insurance policies.
• Catastrophic health insurance: Coverage for severe medical situations.
• Certificate of Coverage (COC): Document detailing insurance policy terms.
• Children’s Health Insurance Program (CHIP): Insurance for children from low-income families.
• Claim: Request for payment under insurance.
• Claim denial: Refusal of an insurance claim.
• Clinical trial: Research study testing medical interventions.
• Cobra: Extended health insurance after job loss.
• Coinsurance: Shared payment between insurer and insured.
• Co-insurance rate: Percentage split in coinsurance arrangement.
• Consolidated Omnibus Budget Reconciliation Act (COBRA): Law allowing extended insurance after job loss.
• Contingent enrolment: Enrolment is conditional on specific factors.
• Coordination of benefits (COB): Aligning benefits from multiple insurers.
• Co-pay accumulator program: Tracks out-of-pocket drug payments.
• Co-payment (Co-pay): Set payment for each service.
• Co-payment maximum: Maximum amount paid as co-payment.
• Cost-sharing: Sharing of costs between the insured, and insurers.
• Cost-sharing reduction (CSR): Subsidies reducing out-of-pocket costs.
• Coverage: Protection provided by insurance policy.
• Coverage area: Geographic area where coverage applies.
• Coverage effective date: Start date of insurance coverage.
• Coverage gap (Donut hole): Temporary limit in drug coverage.

D

• Deductible: Amount paid before insurance covers.
• Deductible rollover: Transferring deductible amount year-to-year.
• Deductible waiver: Situation where deductible is waived.
• Dependent: Individual reliant on another for insurance.
• Dependent coverage: Insurance coverage for family members.
• Electronic Health Record (EHR): Digital version of patient’s records.
• Emergency Medical Condition: Medical condition requiring immediate attention.
• Employer Shared Responsibility Payment (ESRP): Fee for not providing health insurance.
• Essential benefits: Basic health services insurers must cover.
• Essential Health Benefits Benchmark Plan: Standard for essential health benefits.
• Essential Health Benefits (EHB): Set of health care services.

E

• Exchange-certified plan: Health plan meeting marketplace standards.
• Excluded services: Services not covered by insurance.
• Exclusion: Specific condition or treatment not covered.
• Exclusion rider: Amendment excluding certain coverages.
• Exclusive Provider Organization (EPO): Network-based health insurance plan.
• Explanation of Benefits (EOB): Statement detailing insurance claim handling.
• Explanation of Review (EOR): Explanation of claim payment decisions.
• Federally Recognized Tribe: Native American tribe officially recognized.
• Federally-facilitated Exchange (FFE): Marketplace run by the federal government.
• Fee schedule: List of charges for services.
• Fee-for-service (FFS): Payment model per provided service.
• Flexible Benefits Plan: Plan offering various benefit options.
• Flexible Spending Account (FSA): Account for pre-tax healthcare expenses.
• Formulary: List of medications covered by insurance.
• Formulary tier: Classification of drugs based on cost.

G

• Gatekeeper: Primary care provider managing patient care.
• Generic drug: Non-branded, chemically equivalent medication.
• Grace period: Time allowed for late payments.
• Grandfathered health plan: Plan exempt from certain ACA rules.
• Guaranteed issue: Right to insurance regardless of health.
• Guaranteed issue rights: Protections in insurance policy issuance.
• Guaranteed renewal: Right to renew an insurance policy.
• Health home: Coordinated care for complex health needs.
• Health Information Exchange (HIE): Electronic sharing of health information.
• Health Insurance Exchange: Marketplace for health insurance plans.
• Health Insurance Marketplace: Platform to buy health insurance.
• Health Insurance Portability and Accountability Act (HIPAA): Law protecting patient health information.
• Health Maintenance Organization (HMO): Health insurance plan with network restrictions.
• Health plan categories (Metal levels): Categories of insurance plans by coverage.
• Health plan identifier (HPID): Unique ID for health plans.
• Health Reimbursement Account (HRA): Employer-funded account for health expenses.
• Health Savings Account (HSA): Savings account for medical expenses.
• High Deductible Health Plan (HDHP): Health plan with high deductibles.
• High-risk insurance pool: Insurance for high-risk individuals.
• Indemnity plan: Insurance plan with provider flexibility.

I

• Indian Health Service (IHS): Federal health service for Native Americans.
• Individual coverage HRA (ICHRA): HRA for individual health insurance.
• Individual Mandate: Requirement to have health insurance.
• In-network coinsurance: Coinsurance rate for network providers.
• In-network out-of-pocket maximum: Maximum cost within the insurance network.
• In-network provider: Healthcare provider in the insurance network.
• Inpatient: Patient admitted to a hospital.
• Insurance Commissioner: Official overseeing the insurance industry.
• Job-based Health Plan: Health insurance through employment.
• Large group health plan: Insurance plan for large groups.

L

• Lifetime limit: Maximum amount the insurer will pay.
• Long-term care insurance: Insurance for long-term care services.
• Managed care: Health care system managing services, and costs.
• Maximum lifetime benefit: Maximum amount paid over a lifetime.
• Medicaid: Government health insurance for low-income individuals.
• Medicaid Expansion: Increased Medicaid eligibility under ACA.
• Medicaid managed care: Medicaid program using managed care.
• Medical loss ratio (MLR): Percentage of premiums spent on care.
• Medical necessity: Health services needed for treatment.
• Medical underwriting: Assessing risk in insurance applications.
• Medically necessary: Services essential for health treatment.
• Medically needy: Individuals qualifying for Medicaid based on expenses.
• Medicare: Federal health insurance for the elderly/disabled.
• Medicare Advantage (Medicare Part C): Alternative to Original Medicare.
• Medicare Part A: Hospital insurance under Medicare.
• Medicare Part B: Medical insurance under Medicare.
• Medicare Part D: Medicare prescription drug coverage.
• Medigap (Medicare Supplement Insurance): Supplementary insurance for Medicare.

M

• Minimum Essential Coverage (MEC): Minimum health coverage requirement.
• Minimum Value: Minimum value of health plan coverage.
• Navigator: Assists in the Health Insurance Marketplace.
• Network: Group of healthcare providers.
• Network adequacy: Sufficient range of providers in the network.
• Network provider: Provider within the insurance network.
• Network provider directory: List of in-network healthcare providers.
• Non-discrimination rule: Rule against unfair treatment in healthcare.
• Non-preferred drug: Drug not preferred by insurance plan.
• Non-preferred provider: Provider not preferred in the network.
• Off-Exchange Plan: Health plan sold outside of exchanges.
• Off-Marketplace plan: Plan not sold in Health Marketplace.
• On-Exchange Plan: Health plan sold on the exchange.

O

• Open Enrolment Period: Designated period for enrolling in health plans.
• Out-of-network coinsurance: Coinsurance for non-network providers.
• Out-of-network provider: Provider not in insurance network.
• Out-of-pocket expenses: Expenses paid directly by the insured.
• Out-of-pocket limit: Maximum spending limit on health care.
• Outpatient: Patient treated without hospital admission.

P

• Patient Protection and Affordable Care Act (PPACA): US healthcare reform law.
• Plan category (Metal level): Insurance plan classification by coverage.
• Point of Service (POS): Insurance plan type offering provider choice.
• Policy term: Duration of an insurance policy.
• Policyholder: The person owning the insurance policy.
• Pre-authorization: Prior approval for certain medical services.
• Pre-certification: Insurance requirement for pre-approval of services.
• Pre-existing condition: Medical condition existing before coverage.
• Pre-existing condition exclusion period: Waiting period for pre-existing conditions.
• Preferred Drug List (PDL): List of drugs preferred by insurer.
• Preferred Provider Organization (PPO): Insurance plan with provider flexibility.
• Premium: Regular payment for insurance coverage.
• Premium assistance: Financial aid for insurance premiums.
• Premium billing cycle: Frequency of premium payments.
• Premium payment grace period: Time allowed for premium payment delay.
• Premium rate: Cost of insurance premium.
• Premium rate increase: Rise in insurance premium costs.
• Premium subsidy: Financial assistance for insurance premiums.
• Premium surcharge: Additional charge on the premium.
• Premium tax credit: Tax credit for insurance premiums.
• Preventive care: Services preventing illness or detecting early.
• Primary care: Basic or general health care.
• Primary Care Physician (PCP): Main doctor for general health care.

Q

• Provider: Entity providing medical services.
• Provider network: Group of affiliated healthcare providers.
• Qualified Health Plan (QHP): Insurance plan meeting ACA standards.
• Qualifying Life Event (QLE): Life change allowing special enrollment.

R

• Rescission: Cancellation of health insurance policy.
• Risk adjustment: Process balancing insurer risk.
• Risk corridor: Mechanism stabilizing insurance premiums.
• Risk pool: Group sharing similar insurance risks.

S

• Section 125 Plan (Cafeteria Plan): Pre-tax benefit plan.
• Self-funded health plan: Employer-provided health coverage.
• Self-insured plan: Health plan where the employer assumes the risk.
• Short-term health insurance: Temporary health insurance coverage.
• Small Business Health Options Program (SHOP): Marketplace for small businesses.
• Special Enrolment Period (SEP): Time outside OEP for enrolment.
• Specialist: A doctor specialized in a specific medical area.
• State Medicaid Agency: State agency administering Medicaid.
• State-based Exchange: Health insurance marketplace run by a state.
• Stop-loss insurance: Insurance protecting against high claims.
• Subsidy: Financial assistance for specific purposes.
• Tax credit: Deduction from taxes owed.

T

• Telemedicine: Remote healthcare services via technology.
• Termination of coverage: End of insurance coverage.
• Third-party administrator (TPA): Entity managing benefit plans.
• Third-party payer: Entity paying for healthcare services.

U

• Underinsured: Having insufficient insurance coverage.
• Underwriting: Assessing risk for insurance purposes.
• Uninsured: Lacking health insurance coverage.
• Urgent care: Immediate but non-emergency care.
• Utilization Management (UM): Overseeing the use of healthcare services.
• Utilization Review: Reviewing the necessity of medical services.

V

• Voluntary plan: Optional insurance plan.
• Waiting period: Time before coverage starts.

W

• Wellness program: Program promoting health and wellness.
• Wellness visit: Routine check-up for preventive care.