Health Insurance Glossary
Finding a family medical insurance plan will require that you familiarize yourself with some frequently used terms. Here is a glossary of health insurance terms to help you.
- Agent - someone who is authorized by an insurer to negotiate, sell, and service family medical insurance plans.
- Claim - a statement of medical services and the associated costs submitted by the healthcare provider or the policyholder to the insurance company for reimbursement.
- Copayment - the amount that the policyholder must pay out of pocket at the time healthcare services are provided.
- Deductible - the amount that the policyholder must pay before the benefits of the family medical insurance plan kick in.
- HIPAA - Health Insurance Portability and Accountability Act. A federal law that enumerates the guidelines with which healthcare plans, insurers, and managed care organizations must comply in order to issue health insurance coverage.
- HMO - Health Maintenance Organization. A healthcare organization that provides medical services for little to no out-of-pocket cost to policyholders who seek care within the system’s network of providers.
- Indemnity plan - the most traditional type of family medical insurance plan. With this coverage option, the policyholder pays for the cost of medical care out of pocket, and the insurance company reimburses the policyholder at a predetermined rate (e.g., 80% of total costs).
- Managed care - integrates healthcare delivery and financing in an organization that manages the cost, quality, and accessibility of healthcare.
- Network - group of doctors, hospitals, and other healthcare professionals and facilities that a managed care plan contracts with to deliver services.
- Out-of-pocket costs - the portion of medical costs for which the policyholder is financially responsible.
- PPO - Preferred Provider Organization. This type of family medical insurance plan delivers cost savings by giving members financial incentives to seek medical services within the system’s network. PPOs typically offer more flexibility than HMOs.
- Premium - a payment a policyholder makes to an insurer for medical benefits.
- Prescription benefits - a term referring to the coverage of prescription drugs by a family medical insurance plan.
- Preventive care - a set of measures taken in advance to prevent illness or injury. Some insurance plans do not cover preventive care.