Insurance Terminology

Term	Definition
Coinsurance	the amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. The coinsurance rate is usually expressed as a percentage. For example, if the insurance company pays 80% of the claim, you pay 20%.
Copayment	another way of sharing medical costs. You pay a flat fee every time you receive a medical service, including routine office visits, prescriptions, lab tests, X-rays, and/or emergency room care. For example, some insurance plans and managed care plans require you to pay $5.00 for every visit to the doctor. The insurance company pays the rest.
Covered Expenses	Most insurance plans, whether they are fee-for-service, HMO's, or PPO's, do not pay for all services. Some may not pay for prescription drugs and other may not pay for mental health care. Covered services are only those medical services and procedures that the insurer agrees to pay for and should be listed in your policy.
Deductible	the amount of money you must pay each policy year to cover your medical care expenses before your insurance policy starts paying. Deductibles are typically $100, $250, or $500 annually, but some plans require a smaller deductible based on diagnosis rather than based on time. Under this option, you must pay a deductible, usually $50.00, for each NEW diagnosis for which you receive care each year.
Exclusions	specific conditions or circumstances for which the policy will not provide benefits.
HMO (Health Maintenance Organization)	prepaid health plans. You (or your employer) pay a monthly premium which will cover your doctors' visits, hospitalizations, emergency care, surgery, lab tests, X-rays, and therapy. You must select a primary care physician (provider) which will make all necessary referrals for you to receive specialty or emergency care at physicians and hospitals designated by the HMO.
Managed Care	system of controlling costs, utilization, and services provided by the health care providers; usually consists of HMO's, PPO's and similar hybrids of the two.
Maximum Out-of-pocket costs	the most money you will be required to pay for deductibles and coinsurance. It is a stated dollar amount set by the insurance company, in addition to regular premiums.
Non-cancellable policy	a policy that guarantees you can receive insurance, as long as you continue to pay the premium. It is also called a guaranteed renewable policy.
PPO (Preferred Provider Organization)	A combination of traditional fee-for-service and an HMO. You are financially encouraged to use physicians and hospitals which are part of the provider network. When you do, you pay less money. However, you are free to see any provider but you will be responsible for paying a larger amount (usually expressed as a percentage) of the cost.
Pre-existing Condition	a health problem or diagnosis that existed before the date your insurance became effective. It usually refers to a problem for which you have searched for medical care for in the past, but may include symptoms that should have prompted you to seek medical care even if you didn't receive care prior to the effective date of your insurance (e.g., a missed menstrual period could be the first sign of a pregnancy).
Premium	the amount you or your employer pays for insurance coverage.
Primary Care Doctor	usually your first contact to receive health care, usually includes family physicians, general internists, pediatrician, and gynecologist. A primary care physician treats basic medical problems and performs screening tests and practices preventive medicine. He/she will refer you to a specialist or general surgeon if you need care requiring special expertise.
Provider	any person (doctor, nurse, dentist, dietitian, psychologist, etc.) or institution (hospital, office, clinic, radiology center, outpatient center, emergency center, etc.) that provides medical care.
Third-party Payer	any payer for health care services other than you. This can be an insurance company, an HMO, a PPO, or the Federal Government.

The information was taken from the "Checkup on Health Insurance Choices" booklet developed by the Agency for Health Care Policy and Research. To order a copy of the above guideline, please contact:
U.S. Department of Health and Human Services, Public Health Service, Agency for Health Care Policy and Research, Suite 501, Executive Office Center, 2101 Jefferson Street Rockville, MD 20852.