insurance

Health insurance terms and definitions

If you're shopping for health insurance, here are some terms you may encounter:

Accident and health insurance -- Coverage that pays benefits in case of sickness, accidental injury or accidental death. It sometimes provides for loss of income or debt payment if taken out in connection with a loan.

Actuary -- A person who calculates statistically risks, premiums, life expectancies and other factors for insurance firms.

Additional monthly benefit -- Addendum to a disability income policy that provides an extra monthly stipend in the first year of injury, before Social Security benefits start.

Adult day care -- Out-of-home care for disabled adults providing for physical and social needs.

Aftercare -- Services provided after hospitalization and rehabilitation.

Allowable costs -- Covered costs of a medical insurance plan.

Ambulatory benefits -- Coverage for health care services provided while the insured is not confined to a hospital or institution. Could include home health care, physical therapy, emergency room care and pre-admission testing.

Ancillary services -- All the extras that make that hospital stay special, excluding room, meals and nursing care. Ancillary services can include just about everything else: lab services, drugs, dressings, radiology, operating room services and anesthesiology. Could also cover these same services in a nonhospital setting.

Assignment of benefits -- When an insured arranges for the plan to pay someone else directly, usually the physician or hospital.

Basic hospital expense insurance -- Covers room, board and some miscellaneous expenses for a certain number of days.

Benefit levels -- The maximum that a person can receive for a service or procedure under a policy.

Benefit package -- What the insurer covers under a particular policy.

Billed claims -- The amount a hospital or doctor bills the plan.

Blanket medical expense policy -- A plan that pays all medical expenses on a claim without limiting any services or procedures up to a certain ceiling amount.

Board certified -- A doctor who has passed an exam that qualifies him or her as a specialist in a certain field.

Board eligible -- A doctor who is eligible to take the board exam that will make him or her board certified.

Broker -- A person who represents the insurance buyer, not the insurance company or agent, and helps a buyer obtain the proper insurance coverage.

Capitation -- A method of paying for health care services. A fixed amount per person guarantees access to specified medical services, whether plan members take advantage of them or not.

Carrier -- The insurer.

Carry-over provision -- Clause in medical policy that allows a person who has submitted no medical expenses in a year to apply, or carry over, expenses occurring in the last three months of the year toward the next year's deductible.

Claim -- Request for payment under the terms of the policy. May be submitted by the insured or the health care or service provider.

Closed access -- Also known as a gatekeeper model or closed panel. A plan that stipulates the insured will be reimbursed for initial visits to only one doctor, and that doctor must be the one to recommend more specialized care.

COBRA (Consolidated Omnibus Budget Reconciliation Act) -- Federal legislation that requires businesses of a certain size to keep former employees and their dependents on the group health plan for a limited period, provided the ex-employee pays the premiums.

Co-insurance -- In health insurance, the percentage of the claims that an individual must pay, less the deductible. In property and casualty insurance, a provision that requires the insured to maintain a specified amount of insurance based on the value of the property insured.

Comprehensive major medical -- A policy with a low deductible and high maximum coverage limits, as well as a coinsurance provision, which combines basic coverage with major medical coverage.

Conditionally renewable -- Gives the individual the right to renew coverage up to a certain age or specified date. If the company decides not to renew, it must be for specific reasons or conditions stated in the contract.

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Continuation -- Allows employees to continue their group health coverage under certain conditions. (See COBRA.)

Co-pay -- The portion of a bill that the insured pays, usually at the time of service. Often expressed as a set fee for a specific service.

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