Health Insurance Glossary of Terms

Balance Billing – Balance billing is the difference between what a doctor or care provider charges for a service and what your insurance company is willing to pay for that service. This is important if you are in a PPO or POS plan and get care outside your plan network.

Co-payment – A co-payment is the amount of the medical bill that you’re responsible for. Here’s an example: the cost of a prescription may total $100. But if your drug plan has a co-payment of $10, your insurance company will pay $90. You'll pay $10.
 
Covered Service – Any medical service or procedure that’s specifically included in your plan. But be aware that most plans don’t cover every medical service. Services that aren't included are often called “Exclusions and Limitations.”

Deductible – The dollar amount for medical services you have to pay before your health plan will begin to cover you. If you have a medical bill for $5,000 and your deductible is $500, you’ll have to pay $500 from your own pocket — then your coverage begins. This is sometimes called “meeting the deductible.”

Fee For Service (FFS) Health Plans – FFS health plans are the traditional model of insurance. In an FFS plan you can go to any doctor or hospital you want. And after you file an insurance claim, you are reimbursed for the cost of care.

Generic Drugs – Generic drugs are made with the same active ingredients and have the same effectiveness as name brand drugs. Because generic drugs aren't advertised on TV or in magazines, they cost much less.

Health Maintenance Organization (HMO) – An HMO is the most affordable type of managed care. With an HMO, you can only receive care from its network of healthcare providers. But you’ll save money on your premiums and other healthcare costs. If you go outside of the network, you will not be covered.

Health Savings Account (HSA) – HSAs are bank savings accounts exclusively for healthcare costs. And they can gain interest year to year just like a retirement account. But HSAs are not health insurance plans.

Indemnity – It means compensation for a loss or injury. The original model of health insurance was based on indemnity — you paid for a medical service, filed a claim, and were reimbursed by your health plan. Indemnity plans often have the most complete coverage you can find.

Managed Care – Managed care is an affordable form of health insurance that uses a “network” of healthcare providers — such as doctors, hospitals, and clinics.  The plan refers patients to the network, and in exchange, plan members get medical services at a discount.

Maximum Out-of-pocket Costs – They are the maximum amount that you will be responsible for paying each year, including deductibles and co-payments. Once you have met the maximum amount, your plan will cover 100% of all your healthcare expenses.

Network – A network is a group of doctors, hospitals, clinics, and other healthcare providers created by a managed care organization like a PPO or HMO. For managed care plans, when you receive care from the network, you’ll get discounts for your medical care.

Preferred Provider Organization (PPO) – A PPO is a flexible type of managed care. A PPO plan gives you the freedom to go to any healthcare provider you want. But your co-payments, deductibles, and other costs will be lower with an in-network care provider.

Premium – The monthly payment to keep your health insurance plan in effect.

Primary Care Physician – In managed care, you’ll choose a primary care physician. They will be the doctor you’ll go to first for healthcare. If you need specialist care, you’ll get a referral from your primary care physician. Family doctors, pediatricians, OB/GYNs, internal medicine doctors, and internists are all examples of primary care physicians.

Quote — A quote is a no obligation look at your healthcare options. With a free quote from our agency, you can see which plans are available, and get a general idea of how much you can expect to pay. You can use our online quote service to compare plans online in just minutes.