Insurance Glossary
Understand health insurance terms and definitions to make informed decisions about your coverage.
Allowed Amount
The maximum amount a plan will pay for a covered healthcare service. May also be called 'eligible expense,' 'payment allowance,' or 'negotiated rate.'
Appeal
A request for your health insurance company to review a decision that denies a benefit or payment.
Affordable Care Act (ACA)
The comprehensive health care reform law enacted in March 2010, also known as Obamacare. The law has three primary goals: make affordable health insurance available to more people, expand Medicaid, and support innovative medical care delivery methods.
Balance Billing
When a provider bills you for the difference between the provider's charge and the allowed amount. For example, if the provider's charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30.
Bronze Plan
A health insurance plan category that covers 60% of healthcare costs on average. Bronze plans have the lowest monthly premiums but highest out-of-pocket costs when you need care.
Benefit
The healthcare items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the plan's coverage documents.
Coinsurance
Your share of the costs of a covered healthcare service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You pay coinsurance plus any deductibles you owe.
Copayment (Copay)
A fixed amount ($20, for example) you pay for a covered healthcare service, usually when you receive the service. The amount can vary by the type of service.
Cost-Sharing
The share of costs covered by your insurance that you pay out of your own pocket. This includes deductibles, coinsurance, and copayments, but doesn't include premiums, balance billing amounts, or the cost of non-covered services.
Cost-Sharing Reduction (CSR)
A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. Available only with Silver plans if your household income is between 100% and 250% of the federal poverty level.
Coverage Gap
A period of time when you don't have health insurance coverage. Also called a 'gap in coverage.'
Deductible
The amount you pay for covered healthcare services before your insurance plan starts to pay. For example, with a $2,000 deductible, you pay the first $2,000 of covered services yourself.
Dependent
A child or other individual for whom a parent, relative, or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, individuals may be able to claim a premium tax credit to help cover the cost of coverage for themselves and their dependents.
Durable Medical Equipment (DME)
Equipment and supplies ordered by a healthcare provider for everyday or extended use. Coverage for DME may include: oxygen equipment, wheelchairs, crutches, or blood testing strips for diabetics.
Emergency Medical Condition
An illness, injury, symptom, or condition so serious that a reasonable person would seek care right away to avoid severe harm.
Emergency Room Care
Emergency services you get in an emergency room.
Emergency Services
Evaluation of an emergency medical condition and treatment to keep the condition from getting worse.
Essential Health Benefits
A set of healthcare service categories that must be covered by certain plans. The ACA requires non-grandfathered plans in the individual and small group markets to cover essential health benefits, which include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services, and pediatric services.
Exclusions
Healthcare services that your health insurance plan doesn't pay for or cover.
Federal Poverty Level (FPL)
A measure of income issued annually by the Department of Health and Human Services. Federal poverty levels are used to determine eligibility for certain programs and benefits, including savings on Marketplace health insurance.
Formulary
A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a drug list.
Gold Plan
A health insurance plan category that covers 80% of healthcare costs on average. Gold plans have higher monthly premiums but lower out-of-pocket costs when you need care.
Grace Period
The time period during which you can pay your past-due premium without losing your health coverage. For Marketplace plans, the grace period is typically 90 days if you've received advance payments of the premium tax credit.
Grandfathered Health Plan
An individual health insurance policy purchased on or before March 23, 2010. These plans are allowed to continue even though they don't meet all ACA requirements.
Health Insurance Marketplace
A resource where individuals, families, and small businesses can learn about their health coverage options, compare health insurance plans, and enroll in coverage. Also known as the 'Exchange.'
Health Maintenance Organization (HMO)
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency.
Health Savings Account (HSA)
A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. HSAs are available only with High Deductible Health Plans.
High Deductible Health Plan (HDHP)
A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more healthcare costs yourself before the insurance company starts to pay.
Hospitalization
Care in a hospital that requires admission as an inpatient and usually requires an overnight stay.
In-Network
Healthcare providers or facilities that have contracted with your health insurance plan to provide services at a discounted rate. You'll pay less if you use providers that belong to your plan's network.
Individual Mandate
The requirement under the ACA that most people have health insurance or pay a penalty. This penalty was reduced to $0 starting in 2019.
Medicaid
A state and federal program that provides free or low-cost health coverage to eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.
Medicare
Federal health insurance program for people 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.
Metal Tiers
Categories of health insurance plans (Bronze, Silver, Gold, Platinum) that indicate how you and your plan share costs. The categories are based on how the plan splits costs with you, not the quality of care.
Minimum Essential Coverage
The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act.
Network
The facilities, providers, and suppliers your health insurer has contracted with to provide healthcare services.
Non-Covered Services
Healthcare services that your health insurance plan doesn't pay for or cover.
Open Enrollment Period
The yearly period when people can enroll in a health insurance plan. For most Marketplace plans, this runs from November 1 to January 15.
Out-of-Network
Healthcare providers or facilities that haven't contracted with your health insurance plan. You'll typically pay more to use out-of-network providers.
Out-of-Pocket Costs
Healthcare costs you pay yourself, including deductibles, coinsurance, and copayments for covered services, plus all costs for services that aren't covered.
Out-of-Pocket Maximum
The most you pay during a policy period (usually a year) before your health insurance plan starts to pay 100% of the allowed amount. This limit includes deductibles, coinsurance, copayments, and other out-of-pocket costs for covered services.
Platinum Plan
A health insurance plan category that covers 90% of healthcare costs on average. Platinum plans have the highest monthly premiums but lowest out-of-pocket costs when you need care.
Pre-existing Condition
A health problem you had before the date that new health coverage starts. Under the ACA, health insurance companies can't refuse to cover you or charge you more because of a pre-existing condition.
Preferred Provider Organization (PPO)
A type of health plan that contracts with medical providers to create a network of participating providers. You pay less if you use providers that belong to the plan's network.
Premium
The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your healthcare, including deductibles, copayments, and coinsurance.
Premium Tax Credit
A tax credit that helps lower your monthly insurance payment (premium) when you enroll in a plan through the Health Insurance Marketplace. Also known as a subsidy.
Preventive Care
Routine healthcare that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. Under the ACA, most preventive services are covered at no cost to you.
Primary Care Provider (PCP)
A physician who directly provides or coordinates a range of healthcare services for a patient.
Prior Authorization
Approval from a health plan that may be required before you get a service or fill a prescription in order for the service or prescription to be covered by your plan.
Qualifying Life Event
A change in your life situation that can make you eligible for a Special Enrollment Period to enroll in health coverage. Examples include losing health coverage, getting married, having a baby, or moving to a new state.
Quality Improvement
Programs and activities designed to improve the quality of healthcare services.
Referral
A written order from your primary care doctor for you to see a specialist or get certain medical services. In many HMOs, you need a referral before you can get medical care from anyone except your primary care doctor.
Rehabilitation Services
Healthcare services that help you keep, get back, or improve skills and functioning for daily living that have been lost or impaired because you were sick, hurt, or disabled.
Silver Plan
A health insurance plan category that covers 70% of healthcare costs on average. Silver plans have moderate monthly premiums and moderate out-of-pocket costs. If you qualify for cost-sharing reductions, you must pick a Silver plan to get the extra savings.
Special Enrollment Period
A time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for a Special Enrollment Period if you've experienced certain life events, including losing health coverage, getting married, having a baby, or moving.
Specialist
A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions.
Subsidy
Financial help from the government to help pay for health insurance premiums and out-of-pocket costs. Also called premium tax credits and cost-sharing reductions.
Urgent Care
Care for an illness, injury, or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.
Utilization Review
The process used to monitor the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of healthcare services, procedures, or settings.
Still Have Questions?
Our licensed insurance experts can help explain any terms or concepts you don't understand.