A Glossary of Health Care Terms

Claim
A formal request to an insurance company asking for a payment based on the terms of a certain health insurance policy – usually made by the healthcare provider based on services you use.

Co-insurance
A percentage of costs for services you agree to pay when a claim is made.

Consumer-Driven Health Care
These health insurance programs and plans are meant to give you more control over your health care expenses. The idea is that under these plans, you can use health care services more effectively and have more control over your health care dollars because you'll be able to assess your needs and care about negotiating better rates.

Co-pay
A fixed payment your insurance provider will set to cover costs of certain medical services.

Covered Expenses
These are health care expenses that your insurance plan will cover.

Deductible
The amount of money you must pay before an insurance company will pay a claim.

Dependent
A qualified individual whose expenses can be claimed by someone else's insurance policy. Generally, a child or other financial dependent person living with you.

FSA - Flexible Spending Account 
A type of pre-tax, employer-owned spending account used for Qualified Medical Expenses and available through certain health insurance policies.

HDHP - High Deductible Health Plan 
A health insurance plan that offsets lower monthly premium costs by requiring higher out-of-pocket limits.

HRA - Health Reimbursement Arrangement
This is an employer-owned medical savings account that a company deposits pre-tax dollars into for each of its covered employees. Employees can then use this account as a reimbursement for qualified health care expenses.

HSA - Health Savings Account 
A type of pre-tax, employee-owned savings account used for Qualified Medical Expenses available usually only with High Deductible Health Plans

In-network
This is health care received from your primary care physician or from another doctor covered under the network of practitioners listed with your chosen health plan.

Managed Care Organizations
To lower costs, providers and practitioners pool together in advantageous networks. The main differences that tend to motivate choice include whether you must select a primary care physician, whether you need a referral to see a specialist, and whether you are covered for out-of-network care. When selecting a health care plan, you often have these common types to choose from:

• • EPO - Exclusive Provider Organization (Narrowest network)
    This network has the most limited group of physicians and hospitals to choose from. However, they combine the flexibility of PPOs with the cost savings of HMOs. Under these plans, you don't need to choose a primary care physician and don't need referrals to see specialists. EPOs don't cover costs outside of the network unless it's an emergency - if you go to a doctor or hospital out of network, you will pay all costs.

• • HMO - Health Maintenance Organization (Narrow network)
    HMO healthcare plans require the selection of a primary care physician through which all of your health care services filter. This system requires a referral from your primary physician to see a specialist except in an emergency. An exception to this rule is that women are not required to have referrals to visit an OB/GYN for routine services. Advantages of HMOs are less paperwork, lower costs, and more coordination between providers.

• • POS - Point-of-Service (Wide network)
    This plan model is a hybrid of the other three. You must select a primary care physician who handles your referrals, but they may refer you to a specialist that is out-of-network unlike in an HMO or EPO. This difference makes it important to understand the out-of-network cost rates (coinsurance, copays, etc.) associated with your plan choice.

• • PPO - Preferred Provider Organization (Widest network)
    This network provides the most flexibility and the largest collection of providers and hospitals. You don't need a primary care physician and can visit any health care professional without a referral, in or out of network. Staying in networks means lower copays and full coverage, but out of network care can still be covered for some services for a certain co-insurance cost.

Out-of-network
This is care you get without a doctor referral, or services you receive by provider not listed with your chosen health insurance plan. This type of care is often subject to higher copay and coinsurance costs.

OOP - Out of Pocket 

The amount of money an you pay for their medical expenses that does not include monthly premiums.

Pre-tax 
Also known as "preferred" or "tax preferred" - money put towards payments or accounts that is not counted as income on federal and/or state taxes.

Premium
Your non-refundable monthly cost of health insurance – usually paid by a combination of money contributed by employers and employees via monthly payroll deductions.

QME - Qualified Medical Expenses 
Costs associated with the use of approved medical fees and services.