Glossary of Health Care Terms

Health insurance is full of terms you may not know. To help you better understand health insurance, here’s a list of the most commonly used health care terms and definitions.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Affordable Care Act

A comprehensive law passed in 2010, aimed at reforming America's health care system to improve access and affordability for more Americans.

allowable charge

The maximum amount a health care plan will reimburse a doctor or hospital for a given service.

annual deductible

The amount you are required to pay annually before reimbursement by your health care benefits plan begins.

The deductible requirement does not apply to preventive services.

annual limit

An insurance plan may limit the dollar amount it will pay during one year for a certain treatment or service, or for all benefits provided in a year.

B

benefits

The health care items or services covered by an insurance plan. Your insurance plan may sometimes be referred to as a "benefit package."

C

catastrophic plan

The health insurance exchange will include a catastrophic plan option. Catastrophic plans have lower premiums, but begin to pay only after you've first paid a certain amount for covered services, or just cover more expensive levels of care, like hospitalizations. Catastrophic plans are an option to consider for young adults and people for whom coverage would otherwise be unaffordable.

claim form

A form you or your doctor fill out and submit to your health care benefits plan for payment.

claim

An itemized bill for services provided to a member.

COBRA

This stands for Consolidated Omnibus Budget Reconciliation Act of 1985. This federal act requires group health care plans to allow employees and covered dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, termination of employment, a child becoming an over-aged dependent, Medicare eligibility, death or divorce of a covered employee.

coinsurance

The percentage of the costs of a covered health care service or prescription drug you pay after you've paid your deductible. You pay 100 percent of the full allowed amount until you meet your deductible.

contracting hospital

A hospital that has contracted with a particular health care plan to provide hospital services to members of that plan.

copay (also known as copayment)

The set dollar amount you pay for a covered health care service at the time you receive care or when you pick up a prescription drug.

cost-sharing reduction (CSR)

A discount that lowers the amount you have to pay out-of-pocket for deductibles, coinsurance, and copayments. You can get this discount if your income is below a certain level and you choose an insurance plan from the Silver plan category. If you're a member of a federally recognized tribe, you may qualify for additional cost-sharing benefits.

covered person

The eligible person enrolled in the health care benefits plan and any enrolled eligible family members.

covered service

A service that is covered according to the terms in your health care benefits plan.

D

deductible

The amount you pay for most covered services before your health plan starts to pay. When you go to a provider that is in the plan's network, before you meet the deductible you may pay a discounted amount that has been negotiated with the provider. The deductible resets at the beginning of the calendar year or when you enroll in a new plan.

dependent

An eligible person, other than the member (generally a spouse or child), who has health care benefits under the member's policy.

drug formulary

A list of preferred drugs chosen by a panel of doctors and pharmacists. Both brand and generic medications are included on the formulary.

E

effective date of coverage

The date your coverage begins. Please note: The effective date can also represent the date a change in your coverage takes effect. If you have questions, call the number on the back of your ID card.

emergency medical care

Services provided for the initial outpatient treatment of an acute medical condition, usually in a hospital setting. Most health care plans have specific guidelines to define emergency medical care.

employer responsibility

Starting in 2015, if an employer with at least 50 full-time equivalent employees doesn't provide affordable health insurance and an employee uses a tax credit to help pay for insurance through a Health Insurance Exchange, the employer must pay a fee to help cover the cost of tax credits.

essential health benefits

Some benefits will be included in every insurance plan. Beginning in 2014, most insurance plans you can choose from – whether you buy on the health insurance exchange or go directly to the insurance company of your choice – will include many benefits that are meant to make sure basic health concerns are covered.

exclusions

Specific medical conditions or circumstances that are not covered under a health care plan.

Explanation of Benefits (EOB)

An EOB is created after a claim payment has been processed by your health care plan. It explains the actions taken on a claim such as the amount that will be paid, the benefit available, discounts, reasons for denying payment and the claims appeal process. EOBs are available both as a paper copy and online. Understanding Your Explanation of Benefits PDF Document

F

family coverage

Health care coverage for a primary policyholder (called a "subscriber") and his or her spouse and any eligible dependents.

Federal Poverty Level (FPL)

A level of income issued annually by the Department of Health and Human Services – used to determine eligibility for certain programs and benefits. FPL will be used to determine the amount of tax credit you qualify for to offset the cost of purchasing health insurance.

G

generic drug

A prescription drug that is the generic equivalent of a brand name drug listed on your health plan's formulary and costs less than the brand name drug.

generic substitute

A prescription drug which is the generic equivalent of a drug listed on your health plan's formulary.

grandfathered health plan

A health plan that was in place when the new health care law was passed into law. A grandfathered plan is exempt from some requirements of the new law. The grandfather rule enables businesses and families to keep the plan they have, if they wish to.

group

A group of people covered under the same health care plan and identified by their relation to the same employer or organization.

guaranteed issue

A requirement under the Affordable Care Act that health plans must permit you to enroll in some form of insurance coverage regardless of health status, age, gender or other factors.

H

Health Insurance Exchange

The Health Insurance Marketplace, or Health Insurance Exchange, is a federal government website where you can shop, compare and buy plans offered by participating health insurance companies in your area. You can access the Exchange via healthcare.gov , through Blue Cross and Blue Shield of New Mexico or by phone.

Health Maintenance Organization (HMO)

An organization that provides health care coverage to its members through a network of doctors, hospitals and other health care providers.

Health Savings Account

With a Health Savings Account, or HSA, you set aside money before taxes. When you visit a doctor or go to a hospital, you can pay for qualified expenses from your HSA. Only certain plans meet the high deductible amounts needed for you to be able to use your HSA.

High Risk Pool Plan (New Mexico)

Plans that provide coverage if you have a serious health condition that prevents you from getting private insurance. The new law established the Pre-existing Condition Insurance Plan. Some states also have their own high risk pool plan.

HIPAA

A federal law that outlines the rules and requirements employer-sponsored group insurance plans, insurance companies and managed care organizations must follow to provide health care insurance coverage for individuals and groups.

I

Individual & Family Health Plan Out-of-Pocket Maximums

The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copays and coinsurance, your health plan pays 100 percent of the costs of covered benefits. For plans that cover more than 1 person, individual out-of-pocket maximums count toward the family out-of-pocket maximum. Once the family out-of-pocket maximum is reached, the plan pays 100 percent of the cost of covered benefits for everyone on your plan. The out-of-pocket maximum doesn't include your monthly premium payments or anything you spend for services your plan doesn't cover.

Individual Coverage HRA (ICHRA)

Starting January 1, 2020, employers can offer their employees an individual coverage Health Reimbursement Arrangement (HRA) instead of a traditional group health plan. This type of account may help reimburse qualifying health care expenses. As examples, these expenses could be monthly premiums and out-of-pocket costs, such as copayments and deductibles.

individual health insurance plan

Health care coverage for an individual with no covered dependents. Also knows as individual coverage.

Infusion Drug Care

Infusion drug treatments are often used for chronic "maintenance" conditions like asthma, immune deficiencies or rheumatoid arthritis. The drugs are often covered under your health plan's medical benefit, not the drug benefit. Where you get this care could change your out-of-pocket costs. Review infusion drug care costs. PDF Document

in-network

Services provided by a physician or other health care provider with a contractual agreement with the insurance company and paid at a higher benefit level.

inpatient services

Services provided when a member is registered as a bed patient and is treated as such in a health care facility such as a hospital.

insured person

The person who a contract holder (an employer or insurer) has agreed to provide coverage for, often referred to as a member/subscriber.

J

K

L

lifetime limit

A cap on the total lifetime benefits you may get from your insurance company for certain conditions. A health plan may have a total lifetime dollar limit on benefits (like a $1 million lifetime cap) or limits on specific benefits (like a $200,000 lifetime cap on organ transplants or one gastric bypass per lifetime), or a combination of the two. After a lifetime limit is reached, the insurance plan will no longer pay for covered services. Under the health care law, lifetime limits are no longer allowed on essential health benefits, such as emergency services and hospital stays.

M

Medicaid

A joint federal and state funded program that provides health care coverage for low-income children and families, and for certain aged and disabled individuals.

Medical Cost Sharing Group

Medical cost sharing groups (also called health sharing ministries) are a group of like-minded individuals that help each other pay their medical expenses. These groups are similar to a health plan. However, instead of paying a monthly premium bill, contributions are made to a shareable account. This way, when a member is in need of health care funds, the shared money may be used to help cover the costs.

medical group

A licensed health care facility, program, agency, doctor or health professional that contracts with a health plan to deliver health care services to plan members.

Medicare

The federal program established to provide health care coverage for eligible senior citizens and certain eligible disabled persons under age 65.

member

The person to whom health care coverage has been extended by the policyholder (generally their employer) or any of their covered family members. Sometimes referred to as the insured or insured person.

Minimum Essential Coverage (MEC)

The type of health coverage an individual needs to maintain throughout the year in order to meet the individual responsibility requirement under the Affordable Care Act. Health plans that are considered MEC include individual and family plans bought through the Health Insurance Marketplace; qualified health plans bought directly through an insurance company, such as Blue Cross and Blue Shield of New Mexico; job-based coverage; Medicare; Medicaid; and certain other coverage. If you have minimum essential coverage throughout the year, you don’t have to pay the tax penalty for being uninsured.

N

network

The group of doctors, hospitals and other health care professionals that a managed care plan has contracted with to deliver medical services to its members.

non-contracting hospital

A hospital that has not contracted with a particular health care plan to provide hospital services to members in that plan.

O

open enrollment period

The period of time set up to allow you to choose from available health insurance plans, usually once a year.

out-of-network

Services you receive are considered out of network when you use a doctor or other provider that does not have a contract with your health plan. When you go to an out-of-network provider, benefits may not be covered, or may be covered at a lower level. You may be responsible for all or part of the bill when you use out-of-network providers.

out-of-pocket maximum

The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copays and coinsurance, your health plan pays 100 percent of the costs of covered benefits. The out-of-pocket maximum doesn't include your monthly premium payments or anything you spend for services your plan doesn't cover.

outpatient services

Treatment that is provided to a patient who is able to return home after care without an overnight stay in a hospital or other inpatient facility.

P

Participating Provider Option (PPO)

A health care plan that supplies services at a higher level of benefits when members use contracted health care providers. PPOs also provide coverage for services rendered by health care providers who are not part of the PPO network, however the plan member generally shares a greater portion of the cost for such services.

Pharmacy Benefit Manager (PBM)

A separate, or third-party, company that handles your health plan’s pharmacy benefit. A PBM processes and pays for your prescription drug claims based on the terms of your pharmacy benefit.

preauthorization

The process by which members or their primary care physicians (PCP) notify the health plan in advance of treatment plans, such as a hospital admission or a complex diagnostic test. Also called pre-notification.

pre-existing condition

A condition, disability or illness that you have been treated for before applying for new health coverage.

pre-notification

The process by which a plan member or their doctor notifies the plan, before the member undergoes a course of care, such as a hospital admission or a complex diagnostic test. Also called pre-authorization.

premium

The ongoing amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly or yearly. The premium may not be the only amount you pay for insurance coverage. Typically, you will also have a co-payment or deductible amount in addition to your premium.

prescription drugs

Prescription drugs must be ordered by a doctor and obtained at a pharmacy. They are reviewed and approved through a formal process set by the U.S. Food and Drug Administration (FDA).

prescription drug list

A list of commonly prescribed drugs (also known as a drug formulary). Not all drugs listed in a plan's prescription drug list are automatically covered under that plan.

prescription drug payment level tier

A prescription drug list has different levels of payment coverage, called “tiers." These tiers determine how much you will pay out of pocket for your prescription drug, based on the terms of your pharmacy benefit and whether the drug is covered on the drug list. Drugs in a lower tier will often cost less than drugs in a higher tier.

preventive care services

Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. See a full list of covered Preventive Services PDF Document

primary care physician (PCP)

The physician you choose to be your primary source for medical care. Your PCP coordinates all your medical care, including hospital admissions and referrals to specialists. Not all health plans require a PCP.

provider

A licensed health care facility, program, agency, doctor or health professional that delivers health care services.

Q

qualified health plan

An insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (deductibles, copayments, and out-of-pocket amounts) and meets other requirements.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

Small companies may offer their employees a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) if they don’t offer group health coverage. This kind of account may help pay for things like a monthly premium or other qualifying health care costs.

R

referral

As applicable to HMO or point of service (POS) coverage, a written authorization from a member's primary care physician (PCP) to receive care from a different contracted doctor, specialist or facility.

S

specialist

A health care professional whose practice is limited to a certain branch of medicine, including specific procedures, age categories of patients, specific body systems or certain types of diseases.

special enrollment period

A time outside of the open enrollment period during which you can sign up for a health insurance plan. You generally qualify for a special enrollment period of 60 days following certain life events that changes your family status (for example, marriage or birth of a child) or loss of other health coverage.

specialty drug

A prescription drug used to treat complex health conditions. These drugs are usually given as a shot, but may be added to the skin or taken by mouth. Also, they may:

Require following a specific treatment plan
Have special handling or storage needs
Not be sold in retail pharmacies

Conditions like hepatitis C, hemophilia, multiple sclerosis and rheumatoid arthritis are treated with specialty drugs.

subsidy (also known as premium tax credit)

Based on your family size and income, you may qualify for a subsidy, also known as premium tax credit. Unlike tax credits you claim when you file your taxes, these tax credits can be used right away to lower your monthly premium bill. Use our premium tax credit estimator to see if you qualify.

T

U

Utilization Management

The way we review the type and amount of care you're getting. This involves looking at the setting for your care and its medical necessity. Examples may use prior authorization, case management, accompanying reviews or proper discharge planning.