Health Insurance Terms

Explanations about the workings of health insurance can be baffling enough without the specialized and sometimes highly technical jargon that goes with it. To ease some of that burden, the following list of key terms might be helpful:

Claim – A monetary pursuit of payment from an insurance company for benefits, included in a policy, covering the insured.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) -- A federal law that requires most employers to allow eligible employees and their beneficiaries to continue to pay for their own coverage for up to 36 months in some cases.

Co-payment -- A fee an individual is responsible for paying at the time a medical service is received.

Deductible -- The monetary amount that the insured is responsible for paying before an insurance plan kicks in.

Explanation of Benefits (EOB) – An insurance company’s documents that are sent to the policy holder explaining covered benefits and methods for reimbursement.

Health Maintenance Organization (HMO) -- An organization that provides a wide range of comprehensive health care services for a specified group of enrollees for a fixed, pre-paid premium.

Medicaid – These are programs run by states with Federal matching funds. Medicaid aims to provide public health assistance to people of any age, whose income and resources make it impossible for them to afford their own health care.

Medicare – This is a Federal program providing hospital benefits, medical care, and other coverage to people who are at least 65 years old, and to some younger persons covered under Social Security.

Medicare Part A – This is hospital insurance that helps pay for inpatient care in a hospital, nursing facility, or psychiatric hospital. It also covers hospice and home health care.

Medicare Part B – This is medical insurance that helps pay for doctor services and many other medical services or supplies not covered by Part A of Medicare.

Pre-existing Condition -- A condition or diagnosis that existed or was treated before insurance coverage began.

Preferred Provider Organization (PPO) –a type of managed care plan that provides a network of care facilities such as hospitals and doctors who have contracted to work with the organization.

Premiums –regular payments made to an insurance company that keep the policy effective.

Primary Care Physician (PCP) – Healthcare professional who provides basic care to the insured, makes any necessary referrals and plans any necessary medical follow-ups.

Referral – A primary care physician who specifies a patient see a specialist in the field.

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