A

Actuaries:The insurance professionals who perform the mathematical analysis necessary for setting insurance premium rates.

Adjusted community rating (ACR). A rating method under which a health plan or MCO divides its members into classes or groups based on demographic factors such as geography, family composition, and age, and then charges all members of a class or group the same premium. The plan cannot consider the experience of a class, group, or tier in developing premium rates. Also known as modified community rating.

Admitting Privileges: The right granted to a doctor to admit patients to a particular hospital.

Advocacy: Any activity done to help a person or group to get something the person or group needs or wants.

Agent: Licensed salespersons who represent one or more health insurance companies and presents their products to consumers.

Ambulatory Care: All types of health services that do not require an overnight hospital stay

Appeal: Request made to a payer to reconsider a decision, such as a claim denial or denied prior authorization request.  Most appeals must be submitted in writing within a specified period.

Assignment of Benefits: When an insured person assign benefits, they sign a document allowing the hospital or doctor to collect health insurance benefits directly from the health insurance company. Otherwise, the insured person pays for the treatment and is later reimbursed by the health insurance company.

Association: A group. Often, associations can offer individual health insurance plans specially designed for their members.

B

Benefit: Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.

Brand-name drug: Prescription drugs marketed with a specific brand name by the company that manufactures it, usually the company which develops and patents it. When patents run out, generic versions of many popular drugs are marketed at lower cost by other companies. Check your insurance plan to see if coverage differs between name-brand and their generic twins.

Broker. A salesperson who has obtained a state license to sell and service contracts of multiple health plans or insurers, and who is ordinarily considered to be an agent of the buyer, not the health plan or insurer.

C

Capitation: Capitation represents a set dollar limit that you or your employer pay to a health maintenance organization (HMO), regardless of how much you use (or don't use) the services offered by the health maintenance provider.

Captive Agents. Agents that represent only one health plan or insurer.

Carrier: The insurance company or HMO offering a health plan.

Case Management: Case management is a system embraced by employers and insurance companies to ensure that individuals receive appropriate, reasonable health care services.

Certificate of Insurance: The printed description of the benefits and coverage provisions forming the contract between the carrier and the customer. Discloses what it covered, what is not, and dollar limits.

Claim. An itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred. 

claims investigation. The process of obtaining all the information necessary to determine the appropriate amount to pay on a given claim

Community rating. A rating method that sets premiums for financing medical care according to the health plan's expected costs of providing medical benefits to the community as a whole rather than to any sub-group within the community. Both low-risk and high-risk classes are factored into community rating, which spreads the expected medical care costs across the entire community.

Co-Insurance: Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called "co-payment." Co-insurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.

Co-Payment: Co-payment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 "co-payment" for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.

COBRA: The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.

Cover Colorado: If you have been denied health insurance due to a pre-existing medical condition, or have exhausted your COBRA benefits, we may be able to help. While CoverColorado is not a low income plan, this may be your best option if you are unable to obtain coverage elsewhere and can afford it. CoverColorado also offers a Coordination of Benefits (COB) plan to those disabled individuals under age 65 who cannot purchase Medicare supplement policies outside the open enrollment period

Credit for Prior Coverage: This is something that may or may not apply when you switch employers or insurance plans. A pre-existing condition waiting period met under while you were under an employer's (qualifying) coverage can be honored by your new plan, if any interruption in the coverage between the two plans meets state guidelines.

D

Deductible: The amount an individual must pay for health care expenses before insurance (or a self-insured company) covers the costs. Often, insurance plans are based on yearly deductible amounts.

Denial Of Claim: Refusal by an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.

Dependent Worker: A worker in a family in which someone else has greater personal income.

Dependents: Spouse and/or unmarried children (whether natural, adopted or step) of an insured.

Dora: Colorado Department of Regulatory Agencies.  The Colorado Division of Insurance regulates the insurance industry
and assists consumers and other stakeholders with insurance issues. Consumer protection is our mission. Staff responds annually to an estimated 26,000 telephone calls, e-mails, letters, and walk-in visits from consumers.

E

Effective Date: The date your insurance is to actually begin. You are not covered until the policies effective date.

Employee Assistance Programs (EAPs): Mental health counseling services that are sometimes offered by insurance companies or employers. Typically, individuals or employers do not have to directly pay for services provided through an employee assistance program.

Employer-Sponsored Health Insurance: Of Americans who have health coverage, nearly 60 percent secure that coverage through an employer-sponsored plan, often called group health insurance. Millions take advantage of the coverage for reasons as obvious as employer responsibility for a significant portion of the health care expenses. Group health plans are also guaranteed issue, meaning that a carrier must cover all applicants whose employment qualifies them for coverage. In addition, employer-sponsored plans typically are able to include a range of plan options from HMO and PPO plan to additional coverage such as dental, life, short- and long-term disability. Read more about group health insurance. Read recent news articles about employer-sponsored health insurance.

Exclusions: Medical services that are not covered by an person's insurance policy.

Explanation of Benefits: The insurance company's written explanation to a claim, showing what they paid and what the client must pay. Sometimes accompanied by a benefits check.

F

Formulary: A list of prescription drugs, both generic and brand name that are available through your health plan. Your health plan may only pay for medications that are on the formulary.

Fee for Service: Fee for service is the term for how doctors get paid. For each service the doctor performs they get paid a fee. The fee for service health care model has been criticized by health care reform advocates.

G

Generic Drug: A "twin" to a "brand name drug" once the brand name company's patent has run out and other drug companies are allowed to sell a duplicate of the original. Generic drugs are cheaper, and most prescription and health plans reward clients for choosing generics.

Group Health Insurance: Coverage through an employer or other entity that covers all individuals in the group. Read more about group health insurance.

H

Health Care Decision Counseling: Services, sometimes provided by insurance companies or employers, that help individuals weigh the benefits, risks and costs of medical tests and treatments. Unlike case management, health care decision counseling is non-judgmental. The goal of health care decision counseling is to help individuals make more informed choices about their health and medical care needs, and to help them make decisions that are right for the individual's unique set of circumstances.

Health Maintenance Organizations (HMOs): Health Maintenance Organizations represent "pre-paid" or "captivated" insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided, Services are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type of the HMO, services may be provided in a central facility, or in a physician's own office (as with IPAs.)

HIPAA: A Federal law passed in 1996 that allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care. Full name is "The Health Insurance Portability and Accountability Act of 1996."

I

In-network: Providers or health care facilities which are part of a health plan's network of providers with which it has negoiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.

Indemnity Health Plan: Indemnity health insurance plans are also called "fee-for-service." These are the types of plans that primarily existed before the rise of HMOs, IPAs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals.

Independent Practice Associations: IPAs are similar to HMOs, except that individuals receive care in a physician's own office, rather than in an HMO facility.

Individual Health Insurance: Health insurance coverage on an individual, not group, basis. The premium is usually higher for an individual health insurance plan than for a group policy, but you may not qualify for a group plan. Read more about individual health insurance. Read recent news articles about Colorado individual health insurance.

Insurance Exchange: A health insurance exchange is the proposed way under the Obama administration to help with health insurance competition and health insurance reform. This new program will be a key component in providing health insurance to millions of uninsured Americans.

J

K

L

Lifetime Maximum Benefit (or Maximum Lifetime Benefit): the maximum amount a health plan will pay in benefits to an insured individual during that individual's lifetime.

Limitations:  a limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Certificate of Insurance.

Long-Term Care Policy: Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.

Long-term Disability Insurance: Pays an insured a percentage of their monthly earnings if they become disabled.

LOS: LOS refers to the length of stay. It is a term used by insurance companies, case managers and/or employers to describe the amount of time an individual stays in a hospital or in-patient facility.

M

Managed Care: A medical delivery system that attempts to manage the quality and cost of medical services that individuals receive. Most managed care systems offer HMOs and PPOs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease.

Mandated Health Insurance: Mandated health insurance is when one is mandated, or required to purchase health insurance. This is the term most often used in the new health insurance reform legislation by the Obama administration

Maximum Dollar Limit: The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. They may be based on or specified in terms of types of illnesses or types of services. Sometimes they are specified in terms of lifetime, sometimes for a year.

Medigap Insurance Policies: Medigap insurance is offered by private insurance companies, not the government. It is not the same as Medicare or Medicaid. These policies are designed to pay for some of the costs that Medicare does not cover.

Multiple Employer Trust (MET): A trust consisting of multiple small employers in the same industry, formed for the purpose of purchasing group health insurance or establishing a self-funded plan at a lower cost than would be available to each of the employers individually.

N

Network: A group of doctors, hospitals and other health care providers contracted to provide services to insurance companies customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

O

Open-ended HMOs: HMOs which allow enrolled individuals to use out-of-plan providers and still receive partial or full coverage and payment for the professional's services under a traditional indemnity plan.

Out-of-Plan (Out-of-Network): This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.

Out-Of-Pocket Maximum: A predetermined limited amount of money that an individual must pay out of their own savings, before an insurance company or (self-insured employer) will pay 100 percent for an individual's health care expenses.

Outpatient: An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed.

P

Plan Administration: Supervising the details and routine activities of installing and running a health plan, such as answering questions, enrolling individuals, billing and collecting premiums, and similar duties.

Pre-Admission Certification: Also called pre-certification review, or pre-admission review. Approval by a case manager or insurance company representative (usually a nurse) for a person to be admitted to a hospital or in-patient facility, granted prior to the admittance. Pre-admission certification often must be obtained by the individual. Sometimes, however, physicians will contact the appropriate individual. The goal of pre-admission certification is to ensure that individuals are not exposed to inappropriate health care services (services that are medically unnecessary).

Pre-Admission Review: A review of an individual's health care status or condition, prior to an individual being admitted to an inpatient health care facility, such as a hospital. 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-existing Conditions: A medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company. Having a pre-existing condition when shopping for health insurance can a difficult task. Understanding the definition of a pre-existing condition can be a good first step in obtaining a good health insurance policy.

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

Preferred Provider Organizations (PPOs): You or your employer receive discounted rates if you use doctors from a pre-selected group. If you use a physician outside the PPO plan, you must pay more for the medical care.

Primary Care Provider (PCP): A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs. Typically, a PCP serves as a "quarterback" for an individual's medical care, referring the individual to more specialized physicians for specialist care.

Public Option: Public option is the term being used for a proposed government choice for health care insurance. This is part of a larger bill proposed by President Obama in the first year of his presidency to overhaul the health care system with health care reform and insurance reform

 

Provider: Provider is a term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other health care professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.

Q

R

Reasonable and Customary Fees: The average fee charged by a particular type of health care practitioner within a geographic area. The term is often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are higher than the approved amount, the individual receiving the service is responsible for paying the difference. Sometimes, however, if an individual questions his or her physician about the fee, the provider will reduce the charge to the amount that the insurance company has defined as reasonable and customary.

Rescission: is a controversial insurance industry practice that has come under fire as an unfair tactic used to deny coverage to policy holders. If you've been a victim of rescission, your insurance company has received a claim from you, and then – after reviewing your application and medical history for undisclosed conditions or inconsistencies – has cancelled your policy at a point when you needed it most. Read recent news articles about rescission.

Rider: A modification made to a Certificate of Insurance regarding the clauses and provisions of a policy (usually adding or excluding coverage).

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.

S

Second Opinion: It is a medical opinion provided by a second physician or medical expert, when one physician provides a diagnosis or recommends surgery to an individual. Individuals are encouraged to obtain second opinions whenever a physician recommends surgery or presents an individual with a serious medical diagnosis.

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.

Short-Term Disability: An injury or illness that keeps a person from working for a short time. The definition of short-term disability (and the time period over which coverage extends) differs among insurance companies and employers. Short-term disability insurance coverage is designed to protect an individual's full or partial wages during a time of injury or illness (that is not work-related) that would prohibit the individual from working.

Short-Term Health Insurance: Temporary coverage for an individual for a short period of time, usually from 30 days to six months.

Small Employer Group: Generally means groups with 1 99 employees. The definition may vary between states.

State Mandated Benefits: When a state passes laws requiring that health insurance plans include specific benefits.

Stop-loss: The dollar amount of claims filed for eligible expenses at which which point you've paid 100 percent of your out-of-pocket and the insurance begins to pay at 100%. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.

Student Health Insurance: In recent years, many colleges have begun requiring proof of health insurance for students. Coverage options include insurance through family policies and coverage through school-sponsored student health plans, now offered by more than 80 percent of public four-year colleges. Students may also seek coverage through an employer's plan if they're employed full time, or they can purchase their own individual health insurance plan from a licensed health insurance provider. And, depending on the state in which a student resides, the student may also be eligible for coverage by a state-sponsored risk pool, a program that provides coverage for individuals denied insurance by private insurers because of their health condition. Read more about student health insurance. Read recent news articles about student health insurance.

T

Triple-Option: Insurance plans that offer three options from which an individual may choose. Usually, the three options are traditional indemnity, an HMO, and a PPO.

24-hour coverage. A plan under which an employer's group health plan, disability plan, and workers' compensation program are merged, integrated, or coordinated (depending on state regulations) into a single health benefit plan that covers employees 24 hours a day.

24-hour managed care. The application of managed care principles to 24-hour coverage.

U

Underwriter: The company that assumes responsibility for the risk, issues insurance policies and receives premiums.

Usual, Customary and Reasonable (UCR) or Covered Expenses: An amount customarily charged for or covered for similar services and supplies which are medically necessary, recommended by a doctor, or required for treatment.

V

W

X

Y

Z