Health insurance is full of terms you may not know. To help you better understand health insurance, here’s a list of the most commonly used health care terms and definitions.
Health insurance is full of terms you may not know. To help you better understand health insurance, here’s a list of the most commonly used health care terms and definitions.
A comprehensive law passed in 2010, the Affordable Care Act was aimed at reforming America's health care system to improve access and affordability for more Americans.
The maximum amount a health plan will reimburse a doctor or hospital for a given service.
The amount you are required to pay annually before reimbursement by your health plan begins. The deductible requirement does not apply to preventive services.
The health care items or services covered by a health plan. Your health plan may sometimes be referred to as a "benefits package."
Catastrophic plans have lower premiums and the same essential benefits as other plans, but have much higher deductibles. They are available to young adults and people for whom coverage would otherwise be unaffordable.
A form you or your doctor fill out and submit to your health plan for payment.
An itemized bill from a health care provider, for health services provided to a member.
This stands for Consolidated Omnibus Budget Reconciliation Act of 1985. This federal act requires group health plans to allow employees and covered dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, job loss, a child becoming an over-aged dependent, Medicare eligibility, death or divorce of a covered employee, among others.
The percentage of the costs of a covered health care service or prescription drug you pay after you've paid your deductible. You pay 100 percent of the full allowed amount until you meet your deductible.
A health plan with a health savings account (HSA) or other tax-advantaged account. Consumer directed health plans give members more control of health care expenses, as the deducible is higher and care is paid for with the health savings account.
A hospital that has contracted with a particular health plan to provide hospital services to members of that plan.
When you need care and are on two different health plans, your insurers will coordinate your benefits to give you maximum coverage when you need it. It helps avoid duplicate payments and ensure the right payments are made by each plan.
The set dollar amount you pay for a covered health care service at the time you receive care or when you pick up a prescription drug.
A discount that lowers the amount you have to pay out-of-pocket for deductibles, coinsurance, and copays. You can get this discount if your income is below a certain level and you choose a health plan from the Silver plan category. If you're a member of a federally recognized tribe, you may qualify for additional cost-sharing benefits.
The eligible person enrolled in the health plan and any enrolled eligible family members.
A service that is covered according to the terms in your health plan.
The amount you pay for most covered services before your health plan starts to pay. When you go to a provider that is in the plan's network, before you meet the deductible you pay a discounted amount that has been negotiated with the provider. The deductible resets at the beginning of the calendar year or when you enroll in a new plan.
An eligible person, other than the member (generally a spouse or child), who has health care benefits under the member's policy or health plan.
A list of preferred drugs chosen by a panel of doctors and pharmacists. Both brand and generic medications are included on the formulary.
The date your coverage begins or the date a change in your coverage takes effect. For example, if you get married and add your spouse to your plan, their effective date will be different than yours until the plan's next renewal.
Services provided for the initial outpatient treatment of an acute medical condition, usually in a hospital setting. Most health plans have specific guidelines to define emergency medical care.
If an employer with at least 50 full-time-equivalent employees doesn't provide affordable health insurance and an employee uses a tax credit to help pay for insurance through the Health Insurance Marketplace, the employer must pay a fee to help cover the cost of tax credits.
Some benefits will be included in every health plan, meant to make sure basic health concerns are covered. For example, preventive care screenings and annual wellness exams are covered with any plan you buy.
Specific medical conditions or circumstances that are not covered under a health plan.
An EOB is created after a claim payment has been processed by your health plan. It explains the actions taken on a claim such as the amount that will be paid, the benefit available, discounts, reasons for denying payment and the claims appeal process. EOBs are available both as a paper copy and electronically.
Health care coverage for a primary policyholder (called a "subscriber") and their spouse and any eligible dependents.
The income level of an individual or household, issued annually, used by the Department of Health and Human Services to determine eligibility for certain programs and benefits. FPL will be used to determine the amount of tax credit you qualify for to offset the cost of buying health insurance.
A prescription drug that is the generic equivalent of a brand name drug listed on your health plan's formulary and costs less than the brand name drug.
A health plan that was in place when the Affordable Care Act was passed into law in 2010. A grandfathered plan is exempt from some requirements of the new law. The grandfather rule enables businesses and families to keep the plan they have, if they wish to.
A group of people covered under the same health plan and identified by their relation to the same employer or organization.
A requirement under the Affordable Care Act that health plans must permit you to enroll in some form of insurance coverage regardless of health status, age, gender or other factors.
The Health Insurance Marketplace, or Health Insurance Exchange, is a federal government website where you can shop, compare and buy plans offered by participating health insurance companies in your area. You can access the Marketplace at Healthcare.gov , through Blue Cross and Blue Shield of New Mexico or by phone.
A type of health plan that provides health care coverage to its members through a network of doctors, hospitals and other health care providers. An HMO may cost less than other plans but has some limitations.
With a Health Savings Account, or HSA, you set aside money before taxes. When you visit a doctor or go to a hospital, you can pay for qualified expenses from your HSA. Only certain plans meet the high deductible amounts needed for you to be able to use your HSA.
Plans that provide coverage if you have a serious health condition that prevents you from getting private insurance. The new law established the Pre-existing Condition Insurance Plan. Some states also have their own high risk pool plan.
A federal law that outlines the rules and requirements plans must follow to provide health care insurance coverage for individuals and groups.
The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copays and coinsurance, your health plan pays 100 percent of the costs of covered benefits. For plans that cover more than one person, individual out-of-pocket maximums count toward the family out-of-pocket maximum. Once the family out-of-pocket maximum is reached, the plan pays 100 percent of the cost of covered benefits for everyone on your plan. The out-of-pocket maximum doesn't include your monthly premium payments or anything you spend for services your plan doesn't cover.
Starting January 1, 2020, employers can offer their employees an individual coverage Health Reimbursement Arrangement (HRA) instead of a traditional group health plan. This type of account may help reimburse qualifying health care expenses. As examples, these expenses could be monthly premiums and out-of-pocket costs, such as copays and deductibles.
Health care coverage for an individual with no covered dependents. Also knows as individual coverage.
Infusion drug treatments are often used for chronic "maintenance" conditions like asthma, immune deficiencies or rheumatoid arthritis. The drugs are often covered under your health plan's medical benefit, not the drug benefit. Where you get this care could change your out-of-pocket costs.
Services provided by a physician or other health care provider with a contractual agreement with the insurance company and covered at a higher benefit level.
Services provided when a member is registered as a bed patient and is treated as such in a health care facility such as a hospital.
The person who a contract holder (an employer or insurer) has agreed to provide coverage for, often referred to as a member/subscriber.
A cap on the total benefits you may get from your insurance company over the life of your plan for certain conditions. A health plan may have a total lifetime dollar limit on benefits (like a $1 million lifetime cap) or limits on specific benefits (like one gastric bypass per lifetime), or a combination of the two. After a lifetime limit is reached, the insurance plan will no longer pay for covered services. There are no lifetime limits on essential health benefits, such as emergency services and hospital stays.
A joint federal and state funded program that provides health care coverage for low-income children and families, and for certain aged and disabled individuals.
A medical cost-sharing group (also called health-sharing ministries) is a group of like-minded individuals that help each other pay their medical expenses. These groups are similar to a health plan. However, instead of paying a monthly premium bill, contributions are made to a shareable account. This way, when a member is in need of health care funds, the shared money may be used to help cover the costs.
A group of doctors and other health professionals that have a shared medical practice and contract with a health plan to deliver health care services to plan members.
The federal program established to provide health care coverage for eligible senior citizens and certain eligible disabled persons under age 65.
The person to whom health care coverage has been extended by the policyholder (such as their employer) or any of their covered family members. Sometimes referred to as the insured or insured person.
The type of health coverage an individual needs to maintain throughout the year in order to meet the individual responsibility requirement under the Affordable Care Act. Health plans that are considered MEC include individual and family plans bought through the Health Insurance Marketplace, qualified health plans bought directly through an insurance company such as Blue Cross and Blue Shield of Illinois, job-based coverage, Medicare, Medicaid, and certain other coverage.
The group of doctors, hospitals and other health care professionals that contracts with a health plan to deliver medical services to its members.
A hospital that has not contracted with a particular health plan to provide hospital services to members in that plan.
Off-Exchange Health Plan
Plans that are enrolled in directly with a private health insurance provider rather than through the public Health Insurance Exchange. These plans can be enrolled in if you don't qualify for a subsidy. Individual and family plans sold off-Exchange still meet the Affordable Care Act (ACA) requirements. These plans can be enrolled in during the Open Enrollment Period (OEP) or during the Special Enrollment Period (SEP) with a qualifying life event.
On-Exchange Health Plan
Plans that are available for enrollment on the public Health Insurance Exchange, also known as beWellnm in New Mexico. When purchasing an on-Exchange plan, you may be eligible for a subsidy to help lower your monthly payment. These plans can be enrolled in during the Open Enrollment Period (OEP) or during the Special Enrollment Period (SEP) with a qualifying life event.
The period of time set up to allow you to enroll in a health plan, usually once a year.
Services are considered out of network when you use a doctor or other provider that does not have a contract with your health plan. Out-of-network services may not be covered or may be covered at a lower level. You may be responsible for all or part of an out-of-network provider's bill.
The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copays and coinsurance, your health plan pays 100 percent of the costs of covered benefits. The out-of-pocket maximum doesn't include your monthly premium payments or anything you spend for services your plan doesn't cover.
Treatment that is provided to a patient who is able to return home after care without an overnight stay in a hospital or other inpatient facility.
A health plan that supplies services at a higher level of benefits when members use contracted health care providers. PPOs also provide coverage for services rendered by health care providers who are not part of the PPO network; however, the plan member generally shares a greater portion of the cost for such services.
A separate, or third-party, company that handles your health plan’s pharmacy benefit. A PBM processes and pays for your prescription drug claims based on the terms of your pharmacy benefit.
The ongoing amount that must be paid for your health plan. You and/or your employer usually pay it monthly, quarterly or yearly. The premium may not be the only amount you pay for insurance coverage. Typically, you will also have a copay or deductible amount.
Based on your family size and income, you may qualify for a tax credit. Unlike tax credits you claim when you file your taxes, these tax credits can be used right away to lower your monthly premium costs. Sometimes called an advanced premium tax credit (APTC), or tax credit.
Prescription drugs must be ordered by a doctor and obtained at a pharmacy. They are reviewed and approved through a formal process set by the U.S. Food and Drug Administration (FDA).
A list of commonly prescribed drugs (also known as a drug formulary). Not all drugs listed in a plan's prescription drug list are automatically covered under that plan.
A prescription drug list has different levels of payment coverage, called “tiers." These tiers determine how much you will pay out of pocket for your prescription drug, based on the terms of your pharmacy benefit and whether the drug is covered on the drug list. Drugs in a lower tier will often cost less than drugs in a higher tier.
Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems.
The physician you choose to be your primary source for medical care. Your PCP coordinates all your medical care, including hospital admissions and referrals to specialists. Not all health plans require a PCP.
The process by which a plan member or their doctor gets approval from their health plan before the member undergoes a course of care, such as a hospital admission or a complex diagnostic test. Also called preauthorization.
A licensed health care facility, program, agency, doctor or health professional that delivers health care services.
A health plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (deductibles, copays, and out-of-pocket amounts) and meets other requirements.
Small companies may offer their employees a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) if they don’t offer group health coverage. This kind of account may help pay for things like monthly premiums or other qualifying health care costs.
For an HMO or point-of-service (POS) coverage, a written authorization from a member's primary care physician (PCP) to receive care from a different contracted doctor, specialist or facility.
A health care professional whose practice is limited to a certain branch of medicine, including specific procedures, age categories of patients, specific body systems or certain types of diseases.
A time outside the open enrollment period during which you can sign up for health insurance. You generally qualify for a special enrollment period of 60 days following certain life events that change your family status (for example, marriage or birth of a child) or loss of other health coverage.
A prescription drug used to treat complex health conditions. These drugs are usually given as a shot, but may be added to the skin or taken by mouth. Also, they may:
Conditions like hepatitis C, hemophilia, multiple sclerosis and rheumatoid arthritis are treated with specialty drugs.
This health care coverage continuation program is offered by the state of New Mexico. It's not the same as COBRA because it’s only for companies with less than 20 workers. If your employment ended (not due to cause), you and your family may choose to stay covered under a state health plan for an extra 6 months. If your job’s health plan terminates, this coverage is no longer available.
Based on your family size and income, you may qualify for a subsidy, also known as a premium tax credit. Unlike tax credits you claim when you file your taxes, these tax credits can be used right away to lower your monthly premium bill.