Simplifying common terms
Get clear answers so it’s easier to make decisions
Working with health insurance can be confusing. At times, you might feel like there’s a whole new language to learn. To make it easier, here’s a list of common terms and what they mean.
affordable care act (aca)
A health insurance reform law aimed at expanding health insurance coverage for people living in the U.S.
Also known as: Patient Protection and Affordable Care Act, Obamacare, health care reform
Learn more about the Affordable Care Act.
BENEFIT
A service, drug or item that your health insurance plan covers. Benefits may include office visits, lab tests and procedures.
CLAIM
A request for a benefit (including reimbursement of a health care expense) made by you or your health care provider to your health insurer or plan for items or services you think are covered.
COBRA
A federal law that requires group health plans to give continued health insurance coverage to certain employees and their dependents whose group coverage has ended.
Also known as: Consolidated Omnibus Budget Reconciliation Act of 1985
Learn more about COBRA.
COINSURANCE
Your share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service.
You generally pay coinsurance plus any deductibles you owe. For example, if the health insurance or plan's allowed amount for an office visit is $100 and you've met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
COPAYMENT
A fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service.
Also known as: co-payment, copay, co-pay
Deductible
The amount you could owe during a coverage period (usually one year) for health care services your health insurance or plan covers before your health insurance or plan begins to pay.
For example, if your deductible is $1000, your plan won’t pay anything until you’ve met your $1000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
DEPENDENT
A child, disabled adult or spouse covered by your health plan. A person may need to be a certain age or meet other conditions to qualify as a dependent under your plan.
essential health benefits (EHB)
A set of 10 categories of services that most health insurance plans must cover under the ACA.
These include:
Ambulatory (outpatient) care
Emergency services (including emergency room care)
Hospitalization
Maternity and newborn care
Mental health services and addiction treatment
Prescription drugs
Rehabilitation services
Laboratory services
Preventive care, wellness services, and chronic disease treatment
Pediatric services (care for infants and children)
Health insurance marketplace
A resource where individuals, families, and small businesses can learn about their health coverage options; compare health insurance plans based on costs, benefits, and other important features; choose a plan; and enroll in coverage.
The Marketplace also provides information on programs that help people with low to moderate income and resources pay for coverage. This includes ways to save on the monthly premiums and out-of-pocket costs of coverage available through the Marketplace, and information about other programs, including Medicaid and the Children's Health Insurance Program (CHIP).
The Marketplace is accessible through websites, call centers, and in-person assistance. In some states, the Marketplace is run by the state. In others it is run by the federal government.
medicaid
A federal health insurance program for low-income families and children, eligible pregnant women, people with disabilities, and other adults.
The federal government pays for part of Medicaid and sets guidelines for the program. States pay for part of Medicaid and have choices in how they design their program.
medicare
A federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with end-stage renal disease.
Eligible individuals can receive coverage for:
Hospital services (Medicare Part A)
Medical services (Medicare Part B)
Prescription drugs (Medicare Part D)
Together, Medicare Parts A and B are known as Original Medicare.
open enrollment period
The time when you can choose to enroll in a health plan or re-enroll in a health plan you are already in.
You can usually do this without waiting periods or proof of insurance.
If you are eligible for Medicare, the open enrollment period is the time of year you can enroll or make changes to your Medicare coverage.
out of pocket limit
The most you could pay during a coverage period (usually one year) for your share of the costs of covered services.
After you meet this limit, the plan will usually pay 100% of the allowed amount. This limit helps you plan for health care costs.
This limit never includes your premium, balance-billed charges or health care your health insurance or plan doesn't cover.
Pre-existing condition
A health condition that exists before the date that new health coverage starts.
Under the ACA, health insurance companies can’t refuse to cover you or charge you more if you have a pre-existing condition.
Premium
The amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly or yearly.
PREVENTIVE CARE
Routine health care, including screenings, check-ups, and patient counseling to prevent or discover illness, disease, or other health problems.
Primary care provider (PCP)
A physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist or physician assistant, as allowed under state law and the terms of the plan who provides, coordinates or helps you access a range of health care services.
REFERRAL
A written order from your primary care provider for you to see a specialist or get certain health care services.
In many health maintenance organizations (HMOs), you may need to get a referral before you can get health care services from anyone except your primary care provider. If you don't get a referral first, the plan or health insurance may not pay for the services.
Specialist
A physician specialist focusing on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions.
A non-physician specialist is a provider who has special training in a specific area of health care.
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.