Health Insurance Glossary (F-O)

Source Healthinsurance.org

Fee for service

 

Fee-for-service is a system of health insurance payment in which a doctor or other health care provider is paid a free for each particular service rendered.

 

Filing threshold

 

Federal income taxes are due from those who earn more than a threshold amount. The amount varies with your age, marital status, number of dependent children.

Generic drug

 

Once a company’s patent on a brand-name prescription drug has expired, other drug companies are allowed to sell the same drug under a generic label. Generic drugs are less expensive, and most prescription and health plans reward clients for choosing generic drugs.

 

Group health insurance

 

Coverage through an employer or other entity that covers all individuals in the group. Read more about group health insurance.

 

Related terms: employer-sponsored health insurance, private health insurance, individual health insurance

 

Guaranteed issue

 

Guaranteed issue refers to health insurance coverage that is guaranteed to be issued to applicants regardless of their health status, age, or income – and guarantees that the policy will be renewed as long as the policy holder continues to pay the policy premium.

 

Health care decision counseling

 

Services, sometimes provided by insurance companies or employers, that help individuals weigh the benefits, risks and costs of medical tests and treatments. Unlike case management, health care decision counseling is non-judgmental. The goal of health care decision counseling is to help individuals make more informed choices about their health and medical care needs, and to help them make decisions that are right for the individual’s unique set of circumstances.

 

Health choices administration

 

Health reform legislation called for the creation of the Health Choices Administration, a federal agency that would oversee its provisions, including the establishment of health plan benefit standards, establishment and operation of the health insurance exchanges, and administration of individual affordability credits or subsidies. The commission’s additional responsibilities would include prevention of abuses within the Health Insurance Exchange system.

 

Health choices commissioner

 

Health reform legislation called for the creation of a federal agency called the Health Choices Administration. Overseeing that agency would be the Health Choices Commissioner, an individual appointed by the President to oversee provisions of health reform, including the establishment of health plan benefit standards, establishment and operation of the health insurance exchanges, and administration of individual affordability credits or subsidies. The commissioner’s additional responsibilities would include prevention of abuses within the Health Insurance Exchange system.

 

Health insurance exchange

 

A health insurance exchange mechanism is a key provision of health reform legislation, established to provide a selection of competing providers, each offering different qualified plans. All qualified plans must meet standards established and enforced by the Health Choices Administration. For instance, participating plans will not be allowed to discriminate against applicants based on health history (pre-existing conditions) or future risk. Competition between the plan providers would, in theory, encourage the providers to improve the quality and pricing of offered plans.

 

Health insurance portability and accountability act of 1996 (HIPPA)

 

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care.

 

Health Maintenance Organizations (HMOs)

 

Health maintenance organizations represent “pre-paid” or “capitated” insurance plans in which individuals or their employers pay a fixed monthly fee for services instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided. Services are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type of the HMO, services may be provided in a central facility, or in a physician’s own office (as with IPAs.)

 

 

In-network

 

In-network refers to providers or health care facilities that are part of a health plan’s network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.

 

Indemnity health plan

 

Indemnity health insurance plans are also called “fee-for-service.” These are the types of plans that primarily existed before the rise of HMOs, IPAs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals.

 

Independent practice associations (IPA)

 

IPAs are similar to HMOs, except that individuals receive care in a physician’s own office, rather than in an HMO facility.

 

Individual affordability credits

 

Individual affordability credits are included in the health reform legislation to help ensure the goals of the legislation’s individual mandate. Legislation provides premium subsidies on a sliding scale to eligible individuals and families with incomes up to four times the federal poverty level to help them purchase coverage through the health insurance exchanges.

 

Individual health insurance

 

Health insurance coverage on an individual, not group, basis. The premium is usually higher for an individual health insurance plan than for a group policy, but you may not qualify for a group plan. Read more about individual health insurance. Read recent news articles about individual health insurance.

 

Individual mandate

 

The individual mandate provision of the recently passed health reform legislation requires citizens to have insurance coverage that meets minimum standards set as part of health insurance exchanges, including guaranteed access to affordable coverage, essential benefits and other consumer protections. The legislation imposes a tax penalty on individuals – with some exceptions – who do not purchase coverage.

 

Individual subsidies

 

Individual subsidies – or individual affordability credits – are included in the health reform legislation to help ensure the goals of the legislation’s individual mandate. Legislation provides premium subsidies on a sliding scale to eligible individuals and families with incomes up to four times the federal poverty level to help them purchase coverage through the health insurance exchanges.

Related terms: individual affordability credits, subsidies

 

Insurance cooperatives

 

Cooperatives or insurance cooperatives were proposed in the Senate as an alternative to a proposed government plan or public option. The cooperatives, which would have been structured as non-profits and owned by their members, would offer a network of health care providers or contract out for medical services. The concept championed by some Democrats would provide “seed money” for the cooperatives, which would then be sustained by customer premiums. Read this Commonwealth Fund history of health cooperatives

 

Insurance exchange

 

A health insurance exchange mechanism is a key provision of health reform legislation, established to provide a selection of competing providers, each offering different qualified plans. All qualified plans must meet standards established and enforced by the Health Choices Administration. For instance, participating plans will not be allowed to discriminate against applicants based on health history (pre-existing conditions) or future risk. Competition between the plan providers would, in theory, encourage the providers to improve the quality and pricing of offered plans.

 

Length of stay (LOS)

 

LOS refers to the length of stay. It is a term used by insurance companies, case managers and/or employers to describe the amount of time an individual stays in a hospital or in-patient facility.

 

lifetime maximum benefit (or maximum lifetime benefit)

 

the maximum amount a health plan will pay in benefits to an insured individual during that individual’s lifetime.

 

limitations

 

a limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Certificate of Insurance.

 

Long-term care policy

 

Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.

 

long-term disability insurance

 

Pays an insured a percentage of their monthly earnings if they become disabled.

 

Managed care

 

A medical delivery system that attempts to manage the quality and cost of medical services that individuals receive. Most managed care systems offer HMOs and PPOs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease. Recent statistics show that about 90 percent of the insured populations uses some form of managed care.

 

Maximum dollar limit

 

The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. They may be based on or specified in terms of types of illnesses or types of services. Sometimes they are specified in terms of lifetime, sometimes for a year.

 

Medicaid

 

Medicaid is a health insurance program for low-income individuals who can not otherwise afford Medicare or other commercial health insurance plans. Medicaid is funded in part by the government and by the state where the enrollee lives. Learn more about Medicare benefits and eligibility.

 

Medical underwriting

 

Medical underwriting is a process used by insurance companies to evaluate whether to accept an applicant for health coverage and/or to determine the premium rate for the policy.

 

Medicare

 

Medicare is the federal health insurance program created to provide health coverage for Americans aged 65 and older and later expanded to cover younger people who have permanent disabilities or who have been diagnosed with end-stage renal disease or amyotrophic lateral sclerosis (ALS). Learn more about Medicare benefits and eligibility.

 

Medigap insurance policies

 

Medigap plans offer supplemental benefits sold by private companies to extend traditional Medicare. Fifteen plans offer varying combinations of benefits, ranging from coverage of copayments and deductibles to coverage of foreign travel emergency expenses, at-home care and preventive care. Learn more about Medicare benefits and eligibility.

 

Multiple employer trust (MET)

 

A trust consisting of multiple small employers in the same industry, formed for the purpose of purchasing group health insurance or establishing a self-funded plan at a lower cost than would be available to each of the employers individually.

 

Network

 

A group of doctors, hospitals and other health care providers contracted to provide services to insurance companies customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

 

Non-Profit cooperatives

 

Non-profit cooperatives or insurance cooperatives have been proposed in the Senate as an alternative to a proposed government plan. The cooperatives, which would be structured as non-profits and owned by their members, could offer a network of health care providers or contract out for medical services. The concept championed by some Democrats would provide “seed money” for the cooperatives, which would then be sustained by customer premiums. Read more about insurance cooperatives.

 

Penalty

 

Under the individual mandate provision of the Affordable Care Act, Americans will be required to purchase health insurance, starting in 2014. Those who, for whatever reason, decide to not purchase coverage, would face a tax that’s built into the law. Fortunately, all but a small percentage of Americans won’t need to be concerned about the penalty. If you’re wondering about the size of a penalty you would pay, you can use this penalty calculator.

 

open-ended HMOs

 

HMOs which allow enrolled individuals to use out-of-plan providers and still receive partial or full coverage and payment for the professional’s services under a traditional indemnity plan.

 

out-of-plan (out-of-network)

 

This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual’s health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual’s insurance company.

 

Out-of-pocket maximum

 

A predetermined limited amount of money that an individual must pay out of their own savings, before an insurance company or (self-insured employer) will pay 100 percent for an individual’s health care expenses.

 

Outpatient

 

An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed.

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