Glossary- health terms (under age 65)

Approved Amount - The dollar amount on which an insurance company bases its payments and your copayments. This may be less than the billed charge.

Benefit Maximum - The most a health insurance policy will pay for a specified loss or covered service. The benefit can be expressed as either a period of time, a dollar amount or a percentage of the approved amount. Benefits may be paid to the

policyholder or a third party.

Benefit Period - The time for which benefit payments from an insurance policy are available. A policy may include different benefit periods for different kinds of treatment or services.

Billed Charge - The dollar amount a health care provider bills to a patient for a particular medical service or procedure.

Chronic Condition - A continuous or prolonged illness or condition. Examples: asthma, diabetes, varicose veins.

COBRA (Consolidated Omnibus Budget Reconciliation Act) - Federal law requiring that workers who end employment for specified reasons have the option of continuing group insurance through the employer for a limited period of coverage (usually 18 months; can be 29 months or 36 months).

Coordination of Benefits (COB) – Procedures used by insurers to avoid duplicate payments when a person is covered by more than one policy.

Copayment (coinsurance) - A specified dollar amount or percentage of covered expenses which an insurance policy or Medicare requires a beneficiary to pay toward eligible medical bills.

Covered Services - Services for which an insurance policy will pay.

Experimental - Medical treatment which is not generally accepted within the medical profession. Insurance policies sometimes do not cover these procedures. Companies often disagree with doctors on whether a specific procedure or

treatment is experimental.

Explanation of Benefits (EOB) - A statement from an insurance company showing which payments have been made on a claim.

Federally Eligible Individual (FEI) - A person who meets federal standards for continuing or obtaining health care coverage under HIPAA.

Fee For Service - Traditional insurance that does not place restrictions on which doctors you can use. The insurer pays a percentage of the expense you incur.

Guarantee Issue - A type of health insurance policy that is issued regardless of health.

Accountability Act) - Federal law that guarantees health care plan eligibility for people who change jobs, if the new employer offers group insurance.

Health Insuring Corporation (HIC) - A term for certain managed care insurers in Ohio, including all HMOs.

Health Maintenance Organization (HMO) - Amanaged care plan that provides comprehensive care for a monthly premium. Office visits with your doctor usually require a copayment. You must live in an HMO’s service area to join. You usually

must use the plan’s providers and facilities before the plan will pay its share for covered health services.

Health Savings Account (HSA) - A savings fund that allows the insured to pay for medical expenses with pre-tax dollars. Such an account must be paired with a high-deductible health plan.

High-deductible Health Plan - A health plan for which you accept a more expensive deductible. Because you take more risk, you pay a lower premium.

Home health care: Skilled nursing care and certain other health care you get in your home when ordered by your doctor.

Hospice care: A special way of caring for people who are terminally ill and their families.

Hospital Indemnity Policy - Pays a fixed dollar amount for each day you are in the hospital, regardless of actual hospital bills.

Lifetime Maximum - The total amount a policy will pay for covered expenses during an insured’s lifetime.

Loss Ratio - The dollar amount an insurer pays in claims compared to the amount it collects from all customers in premiums. Loss ratio is usually the percentage of each dollar collected in premiums which is paid out in claims.

Medically Necessary - Treatments or services an insurance policy will pay for as defined in the contract. Check your policy for specific language defining medically necessary.

Multiple Employer Welfare Arrangement (MEWA) - An organization of employers who join together as a group to provide health care benefits for their employees. Ohio law requires a MEWA to either buy an insurance policy that covers its members’ employees, or meet the financial

standards for an insurance company.

Open Enrollment - A period of time when new subscribers may enroll in a health insurance plan regardless of their health.

Pre-existing Condition (Pre-ex) – Health conditions or problems that were diagnosed or treated before health insurance was purchased. Check your policy for specific language defining pre-existing conditions.

Pre-certification - A requirement that you obtain the insurance company’s approval before a medical service is provided. If you fail to follow the pre-certification procedures the company may reduce or deny claim payment. Please note: getting pre-certification does not guarantee claim payment. Also called Utilization Review.

Primary Payer - Health insurance policy that pays first when a person is covered by more than one insurance plan.

Preferred Provider Organization (PPO) – An insurance company plan based on a network of providers. You may be able to see any doctor without a referral, although the plan will pay less if the doctor is outside its network. You normally have a copayment for office visits to a network doctor. Copayments may vary; deductibles, coinsurance and out-of-pocket maximums may also vary, depending on the plan.

Provider - A person or organization that provides medical services, such as a doctor, hospital, x-ray company, home health agency, pharmacy, etc.

Rider - A legal document that modifies an insurance policy. Riders may either extend or decrease benefits, or add or exclude specific conditions.

Secondary Payer - Applies only when you have more than one health insurance plan. The secondary payer is the plan whose payments cannot be made until another plan (the primary payer) has processed the claim. Also see Coordination of Benefits.

Self-insured Plan - An organization (usually an employer) that pays health care costs out of the organization’s own pocket.

Short-term health insurance - Health insurance that generally provides coverage for no longer than a year. Because you cannot carry eligibility from prior coverage to a short-term policy, a short-term health plan never covers pre-existing

conditions.

Specific Disease Policy - A health insurance policy that covers the expenses incurred only for a specific disease named in the policy. Also known as Dread Disease policy. The most common type is cancer insurance.

Usual, Customary and Reasonable (UCR) – The dollar amount a company has determined to be the appropriate charge for a particular medical service. Each company sets its own UCR. It is often less than the billed charge.

Waiting Period - The time you must wait before group health insurance from a new employer goes into effect.