Health Insurance Glossary

This is a list of health insurance related terms and definitions. Test your knowledge with a game of health insurance glossary hangman. If you think it's missing any important terminology, please let me know. Thanks for your visit. Enjoy!

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Terms Continued

Participating Provider

A health care provider who has been contracted to render medical services or supplies to insured persons at a pre-negotiated fee. Providers include hospitals, physicians, and other medical facilities that are part of a PPO or HMO network.

Permanent Insurance

Coverage that can be continued relatively indefinitely (such as to age 65 for most permanent health insurance policies) as long as the policyholder makes scheduled premium payments and refrains from actions that would invalidate the policy (such as misrepresentations on the application).

Policy

The insurance agreement or contract.

Policy Year

The twelve month period beginning with the effective date or renewal date of the policy.

Policyholder

The insured person named on the insurance policy.

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.

Pre-Admission Review

A review of an individual's health care status or condition, prior to an individual being admitted to a hospital or inpatient health care facility. Pre-admission reviews are often conducted by case managers or insurance company representatives (usually nurses) in cooperation with the individual, his or her physician or health care provider, and hospitals.

Pre-Admission Testing

Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility.

Pre-Authorization

Under a pre-authorization provision of a health insurance policy, the insured must contact the health insurance company prior to a hospitalization or surgery, and receive authorization for the service.

Pre-Certification

This is a requirement that a insured person call their health insurance company and advise them a doctor has stated certain medical treatment is required. This is done before receiving treatment from the doctor or hospital. A health insurance policy will normally list the medical conditions that require pre-certification before receiving treatment. When pre-certification is not received, benefits will be reduced or possibly not covered.

Pre-existing Condition

A health problem that existed before the date your insurance became effective. Each health insurance company uses its own particular definitions of pre-existing condition. Many companies define a pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage.

Preferred Provider Organization

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.

PPO

An acronym for Preferred Provider Organization.

Pregnancy Care

Federal maternity legislation, enacted in 1978, requires that employers engaged in interstate commerce who have 15 or more employees provide the same benefits for pregnancy, childbirth, and related medical conditions as for any other sickness or injury.

Premium

The amount you or your employer pays in exchange for health insurance coverage.

Preventive Care

An approach to health care which emphasizes preventive measures and health screenings such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray tests, pap smears, mammograms and other early detection testing. The purpose of offering coverage for preventive care is to diagnose a problem early, when it is less costly to treat, rather than late in the stage of a disease when it is much more expensive, or too late to treat.

Primary Care Physician

Under a health maintenance organization plan, the primary care physician is usually an insured person's first contact for health care. This is often a family physician, internist, or pediatrician. A primary care physician monitors patient health, treats most patient health problems, and refers patients, if necessary, to specialists.

PCP

An acronym for Primary Care Physician.

Prior authorization

Review of need for health care items or services before services are rendered or products are provided.  This refers to a decision made by the health plan to cover or not cover the charges before the services are provided.

Provider

Any person (doctor or nurse) or institution (hospital, clinic, or laboratory) that provides medical care.

Qualifying Event

An occurrence (such as death, termination of employment, divorce, etc.) that changes an employee's eligibility status under a group health plan. The term is most frequently used in reference to COBRA eligibility.

Reasonable and Customary Charge

A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community. Reasonable and Customary Charge essentially means the same thing as Usual and Customary Charge.

Referral

An OK from the primary care physician for the patient to see a specialist or get certain services. In many HMO plans, the insured person needs to get a referral before they get care from anyone except the primary care physician. If the referral is not received, the HMO may cover resulting expenses.

Renewal

A continuation of an insurance policy on revised terms, such as adjusted health insurance rates.

Rider

An attachment, amendment or endorsement to an insurance policy.

Risk

For a health insurance company, risk is the chance of loss, the degree of probability of loss or the amount of possible loss. For an individual, risk represents such probabilities as the likelihood of surgical complications, medications' side effects, exposure to infection, or the chance of suffering a medical problem because of a lifestyle or other choice. For example, an individual increases his or her risk of getting cancer if he or she chooses to smoke cigarettes.

Schedule of Benefits and Exclusions

A health insurance listing of the benefits which are covered under the policy guidelines as well as services which are not provided under the policy.

Second Surgical Opinion

This is an opinion provided by a second physician, when one physician recommends surgery to an individual. Most health insurance policies cover second surgical opinions.

Self-insured

The self-insured employer assumes risk for health care expenses in a plan that is self-administered or administered through a contract with a third-party organization. This form of coverage is regulated by the Employee Retirement Income Security Act of 1974. Hence, self-insured health plans fall under federal, rather than state, regulation.

Service Area

The area where a health plan accepts members. For HMOs, it is also the area where services are provided. A health plan may terminate coverage for persons who move out of the plan's service area.

Short-Term Medical Insurance

Temporary major medical coverage designed to fill gaps in traditional medical coverage. Short-term plans typically last no longer than one year and cannot be renewed.

Skilled Nursing Facility

A licensed institution that provides regular medical care and treatment to sick and injured persons. Daily medical records are kept and patients are under the care of a licensed physician.

Special Benefit Networks

Provider networks for particular services, such as mental health, substance abuse, or prescription drugs.

Staff Model

Staff model is a type of HMO in which care is provided by physicians who are employees of the HMO. This contrasts with the independent practice association HMO, in which independent physicians contract with the HMO.

Standard Industrial Classification

Coding of businesses by their product or service. This classification is used in group insurance in determining rates for various industries.

SIC

An acronym for Standard Industrial Classification.

State Insurance Department

An administrative agency that implements state insurance laws and supervises (within the scope of these laws) the activities of insurance companies operating within the state.

State-Mandated Benefits

Benefits for a variety of medical conditions that a given state requires of health insurance policies sold in that state.

Stop-loss Provisions

A limit in a health insurance policy that provides for 100% payment of expenses after total patient out-of-pocket expenses exceed a certain contractual dollar amount.

Third-Party Payer

Any payer of health care services other than the insured person. This can be an insurance company, HMO, PPO, or the federal government.

Underwriting

The act of reviewing and evaluating prospective insured persons for risk assessment and appropriate premium.

Urgent Care

Health care provided in situations of medical duress that have not reached the level of emergency. Claim costs for urgent care services are typically much less than for services delivered in emergency rooms.

Usual and Customary Charge

A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community. Usual and Customary essentially means the same thing as Reasonable and Customary Charge.

Utilization Review

A mechanism by which the appropriateness, necessity, and quality of health care services are monitored by both insurers and employers.

Waiting Period

A period of time when the health plan does not cover a person for a particular health problem.

Well-Baby Care

Preventative health services, including immunizations, for young children within an age range specified by the health plan.

Wellness Office Visit

A physician's office visit which is not prompted by sickness or injury.

Workers Compensation

Insurance that employers are required to have to cover employees who get sick or injured on the job.

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