Speak to a Licensed Insurance Agent 1-855-792-0088 TTY 711
Mon - Sun, 7am - 10pm
Menu

Health Insurance Glossary of Terms

Learning about health insurance can be challenging because it comes with complicated jargon. We know it’s difficult to keep up with all the terms you need to know, so we put together a glossary to help you better understand your insurance options before enrolling in a plan.

A

Activities of Daily Living (ADL)

Activities of daily living are self-care tasks you do every day. The six daily living activities are eating, bathing, dressing, toileting, continence, and transferring.

Acute Illness

An acute illness is a disease or condition that comes on rapidly and severely, but that can—with proper treatment—be cured, such as pneumonia or a broken bone.

Advanced Premium Tax Credit

Advanced Premium Tax Credits are tax breaks designed to lower the monthly premium payment you make to your health insurance company. Households with an income within 100-400% of the Federal Poverty Level may qualify. Premium Tax Credits are also called "tax subsidies."

Affordable Care Act (ACA)

The Affordable Care Act (ACA) is healthcare reform to reduce the number of uninsured Americans by making coverage more affordable. Also known as The Patient Protection and Affordable Care Act, the ACA also requires insurance companies to cover preventive care and other essential health benefits. Also known as "Obamacare."

Allowed Amount

The allowed amount is the maximum amount your health insurance provider will cover for care. You may have to pay the difference if your healthcare provider charges more than your plan's allowed amount.

Annual Enrollment Period

The Medicare annual enrollment period (AEP) is when you can enroll, change or drop a plan. The period takes place from October 15 through December 7 each year; changes take effect January 1 of the following year.

Annual Wellness Visit

The Annual Wellness Visit is a once a year visit covered by Medicare in which you can meet with your doctor to develop a prevention plan based on your needs.

Appeal

You can file an appeal if your insurance company denies a benefit or claim. An appeal asks your insurance provider to review or change their decisions.

Assignment

If your doctor or healthcare provider accepts an assignment, it means they agree to receive the Medicare-approved amount as the full amount for any services provided. Your healthcare provider will submit the claim to Medicare, and your out-of-pocket costs are usually less if your doctor accepts Medicare assignments.

B

Beneficiary

A beneficiary is anyone individual enrolled in a health program and receives benefits.

Benefit Period

The benefit period is the length of time your health plan covers you.

Brand Name Drugs

Brand Name drugs are prescription drugs sold under a specific name or trademark. They have the same active ingredients as generic drugs but usually cost more.

C

Children's Health Insurance Program (CHIP)

The Children's Health Insurance Program (CHIP) provides healthcare for children in low-income households. CHIP recipients usually earn too much to qualify for Medicaid but not enough to purchase private coverage.

Claim

A claim is a request for payment to your health insurance company. A claim is usually handled by your doctor or provider, though some plans will make you file your claim if you visit an out-of-network doctor.

Coinsurance

Coinsurance is the percentage of your medical costs that you pay after you meet your deductible. Your insurance company pays the remaining amount.

For example:
If you have a $1,000 medical bill and your coinsurance is 20%, you'll pay $200. Your insurance company will cover the final $800.

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a law that allows you to continue receiving your job-based health insurance after you've lost your job, whether it's voluntary or involuntary. If you have COBRA, your former employer isn't required to pay any portion of your monthly premium.

Copayment

A copayment is the fixed amount you pay directly to your provider for medical services or prescription drugs covered in your plan.

For example:
If your plan includes a copayment of $20 for office visits, you'll pay $20 to your doctor whenever you have an appointment.

Cost Sharing Reduction (CSR)

A Cost Sharing Reduction (CSR) is a discount applied to your out-of-pocket costs such as deductibles, copayments and coinsurance. Your income must be within 100-250% of the Federal Poverty Level to qualify.

Creditable Coverage

Non-Medicare health coverage that will pay, on average, as much as the standard Medicare prescription drug coverage.

Custodial Care

Custodial care helps you with daily life activities, including eating, dressing, bathing, moving around, continence, and going to the bathroom. Medicare usually doesn't cover custodial care.

D

Deductible

A deductible is an amount you pay out of pocket before your insurance company covers its portion of your medical bills.

For example:
If your deductible is $1,000, your insurance company will not cover any costs until you pay the first $1,000 yourself.

Dependent

A dependent is a child, spouse or domestic partner covered by another person's health insurance plan.

Diagnosis

A diagnosis identifies a medical condition or disease from signs, symptoms and diagnostic testing.

Diagnostic Tests

Doctors or specialists order diagnostic tests to determine if the patient has a medical condition or disease. For example, doctors may request X-rays, ultrasounds and other services to make a diagnosis.

Disability

A disability is an illness or injury that limits daily activities. Disability insurance may be part of your health plan, or you may buy it to supplement your health plan. Disability coverage usually pays for some or all of your salary if you can't work.

Disenrollment

If you leave your health plan before your benefit period ends, it’s called disenrollment.

Drug Tiers

Drug tiers are the categories health insurance companies use to categorize all the prescription drugs they cover. Drug tiers typically range from One to Five; Tier One is the lowest and usually includes the least expensive generic drugs. Tier Five includes specialty drugs that are usually very expensive. Some carriers have a Sixth Tier.

Dual Eligible

Dual eligible individuals qualify for both Medicare and Medicaid.

E

Effective Date

The effective date is when your health plan coverage starts.

Eligibility

Some health plans require you to meet minimum requirements before you can enroll.

Emergency Care

Emergency care is the treatment for life-threatening medical problems that need attention right away. Death or severe health problems can occur if you don't immediately get care.

Enrollment Period

The enrollment period is the time in which you can sign up for a new health insurance plan.

Essential Health Benefits

Essential Health Benefits are 10 benefits every health insurance policy must include under the Affordable Care Act. They are: outpatient care, emergency services, hospitalization, maternity and newborn care, mental health, prescription drugs, rehabilitative and habilitative care, laboratory services, preventive care, and pediatric services.

Exception Request

You can request an exception with your Medicare Part D plan if you need a prescription drug that is not on your plan's formulary. You can also request an exception to move a drug from a more expensive tier to a less expensive tier that's already on your plan's formulary.

Excess Charges

An excess charge is a difference between your healthcare provider's actual cost and the payment amount Medicare approves.

Exchange

An exchange is a virtual space where you can shop for and enroll in health insurance. You can reach the exchange through the internet, phone, or in-person. Also known as The Health Insurance Marketplace.

Exclusions

Exclusions are services that your health plan doesn't offer. Your policy should have a list of exclusions in your plan documents.

Extra Help

Extra help is a financial assistance program that helps people with low incomes pay for Medicare Part D coverage.

Extra Savings

Extra Savings is a discount applied to your out-of-pocket costs such as deductibles, copayments and coinsurance. Your income must be within 100-250% of the Federal Poverty Level to qualify. Also known as a "Cost Sharing Reduction (CSR)"

F

Fee

An amount you pay when you receive a service from a doctor or other healthcare provider.

Fee For Service

Fee for service means healthcare providers are paid separately for each service they provide.

Financial Assistance

You may be eligible for financial assistance to help you pay for health coverage depending on your income and household information.

Flexible Spending Account (FSA)

A Flexible Spending Account (FSA) is a savings account that you can use for healthcare expenses. FSAs are usually provided by employers and included in a job's benefits package.

G

Generic Drugs

Generic drugs are prescription drugs with the same active ingredients as Brand Name drugs but usually cost less.

Grandfathered Health Plans

A grandfathered health plan is a policy purchased before March 23, 2010. Grandfathered plans may not include some of the rights and protections established by the Affordable Care Act.

Group Health Plan

A group health plan is a type of insurance policy that an employer generally offers. The plan usually offers health, dental, life insurance, disability coverage and more.

Guaranteed Issuance

A condition that provides Medicare Supplement enrollment without going through medical underwriting.

H

Health insurance

Health insurance is a form of insurance that covers a portion of your medical expenses. In exchange, you pay a monthly premium and other costs.

Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) is a type of plan that uses a network of doctors, hospitals, and other providers to treat an insurance company's customers.

Health Savings Account (HSA)

A Health Savings Account (HSA) can pay for healthcare expenses. Your pre-tax income is deposited into your HSA to pay for medical expenses.

Healthcare

Healthcare is the industry dedicated to maintaining or improving health and well-being.

Healthcare Provider

Healthcare providers are doctors, specialists, therapists, labs, pharmacies, clinics, hospitals, and urgent care centers. Your insurance company usually pays your healthcare provider.

High Deductible Health Plan (HDHP)

A High Deductible Health Plan (HDHP) may lower your monthly premium payments but have higher-than-normal deductibles.

Hospice Care

Hospice care is for people who are terminally ill. The care includes pain management, counseling, respite care as well as inpatient and outpatient care. Hospice care is covered by Medicare Part A.

I

In-network

In-network refers to the doctors, hospitals and other providers that are inside of your provider network. A provider network is a group of providers that have agreed with your health insurance company to treat its customers.

Income-Related Monthly Adjustment (IRMAA)

Income-Related Monthly Adjustments determine the premium costs for Medicare Part B and Part D based on your income.

Individual Health Insurance

You can purchase individual health insurance to cover you and your family's medical needs. This type of insurance is offered and sold by private companies.

Initial Enrollment Period (IEP)

The Initial Enrollment Period (IEP) lasts seven months. For those not born on the first of the month, it begins three months before the month you turn 65. You can enroll in Medicare during your IEP.

Inpatient

Inpatient refers to medical care that requires admission to the hospital, usually overnight.

L

Limitations

Limitations are restrictions on your health insurance coverage. Either your plan won't cover a service, or there may be cost limits on the coverage.

Long-Term Care

Long-term care coverage is insurance that helps pay for medical services and care you receive due to a chronic illness or disability. Long-term care often refers to "custodial care" or personal care needs.

M

Major Medical Insurance

Major medical insurance is health insurance that covers the Ten Essential Health Benefits. In the past, this term referred to the most comprehensive plans. The Affordable Care Act made it mandatory for insurance companies to provide many of these comprehensive benefits to all customers.

Managed Care

Managed care is a form of healthcare that focuses on improving and maintaining good health with preventive care. This helps control costs and improve the quality of care you receive.

Managed Care Plans

Managed care is a type of health plan that encourages beneficiaries to stay in-network. Insurance companies sign agreements with healthcare providers to offer lower costs. If you go out-of-network, healthcare costs are often higher.

Medicaid

Medicaid is a state-based health insurance program for individuals that qualify. Unlike Medicare, Medicaid does not have age restrictions for members.

Medical Underwriting

When you apply for a plan, health insurance companies use medical underwriting to determine your health status and whether they will cover you. The process may include interviews, medical exams, tests, and more.

Medically Necessary

Health care services necessary for the diagnosis or treatment of an illness, injury, condition, disease, or symptoms that meet accepted standards of medicine.

Medicare Advantage Plan (Part C)

Medicare Advantage (Medicare Part C) is health insurance for Americans aged 65 and older that blends Medicare benefits with private health insurance. This typically includes a bundle of Original Medicare (Parts A and B) and Medicare Prescription Drug Plan (Part D).

Medicare Part A

Medicare Part A, also called "hospital insurance," covers the care you receive while admitted to the hospital, skilled nursing facility, or other inpatient services. Medicare Part A is part of Original Medicare.

Medicare Part A Premium

Medicare Part A premiums cover hospital visits, skilled nursing stays, some home health services, and more. Part A premiums are based on whether you or your spouse paid income taxes and for how long. Most individuals won't pay a Part A premium.

Medicare Part B

Medicare Part B is the portion of Medicare that covers your medical expenses. Sometimes called "medical insurance," Part B helps pay for the Medicare-approved services you receive.

Medicare Part B Premium

Medicare Part B premiums cover doctor services, inpatient therapies, durable medical equipment, and more. Your income plays a part in your premium. For 2020, individuals making $87,000 per year or less and couples making $174,000 or less pay the standard monthly amount of $144.60 each.

Medicare Part D Catastrophic Coverage

The Medicare Part D catastrophic coverage reduces the amount of copays and coinsurance after the coverage gap. For example, in 2021, the coverage gap amount is $6,500.

Medicare Part D Coverage Gap (Donut Hole)

The Medicare Part D coverage gap, also known as the donut hole, is the payment stage between the initial coverage limit and the catastrophic coverage. The portion you pay for prescriptions is usually higher in this phase until you reach $6,350 for covered drugs in 2020 and enter the catastrophic level.

Medicare Part D Initial Coverage

Medicare Part D initial coverage is the payment stage where you pay either copays or coinsurance for prescription drugs after you've met the deductible (if your plan has one). You stay in this phase until you paid $4,020 for covered drugs in 2020, and then the coverage gap (donut hole) starts.

Medicare Part D Late Enrollment Penalty

The Medicare Part D late enrollment penalty is a fee added onto your Part D premium if you go 63 consecutive days after your Initial Enrollment Period ends without creditable prescription drug coverage. The penalty generally applies for the lifetime of your Part D plan.

Medicare Prescription Drug Plan (Part D)

Medicare Prescription Drug Plan (Part D) is prescription drug coverage for people enrolled in Medicare. Part D is optional and is offered by private insurance companies.

Medicare Savings Program

Medicare Savings Programs help those with low incomes pay premiums and sometimes coinsurance for Medicare expenses.

Medicare Supplement Insurance (Medigap)

Medicare Supplement Insurance (Medigap) is designed to provide coverage that Original Medicare (Parts A and B) does not. Medigap policies are purchased in addition to Original Medicare and have their own monthly premiums you'll need to pay.

Mental Health Services

Mental health services help your emotional and psychological health. Coverage generally includes behavioral health treatment (psychotherapy and counseling), mental and behavioral health inpatient services and substance abuse.

O

Obamacare

Also known as The Patient Protection and Affordable Care Act (ACA), Obamacare requires insurance companies to cover preventive care and other essential health benefits.

Open Enrollment

Medicare Advantage Open Enrollment: The annual period when individuals enrolled in Medicare Advantage plans can make a one-time plan change to any other Medicare Advantage, Medicare Advantage Part D, Part D Prescription Drug plan or go back to Original Medicare. Medicare Advantage Open Enrollment is from January 1 - March 31.

The Open Enrollment Period for under 65 runs from November 1 to December 15. If you don’t enroll by Dec. 15, you won’t be eligible for coverage unless you qualify for a Special Enrollment Period.

Original Medicare (Parts A and B)

Original Medicare is a fee-for-service health insurance program available to Americans aged 65 and older and some individuals with disabilities. Original Medicare is provided by the federal government and is made up of two parts: Part A (hospital insurance) and Part B (medical insurance).

Out-of-network

Out-of-network refers to doctors, hospitals and other providers that do not have an agreement to treat your health insurance company's clients. Visiting an out-of-network provider typically means more out-of-pocket costs and less coverage.

Out-of-Pocket Maximum

The maximum amount of money an individual will pay towards out of pocket expenses like deductibles, copayments, and coinsurance.

Outpatient

Outpatient refers to services that don't require an overnight hospital stay.

P

Point of Service (POS)

Point of Service (POS) plans are health insurance policies that feature provider networks and primary care physicians. POS customers are also allowed to see out-of-network providers for a higher cost.

Pre-Existing Condition

A pre-existing condition is an illness, injury or other medical condition you had before you enrolled in your health insurance policy.

Preferred Provider Organization (PPO)

A Preferred Provider Organization (PPO) is a health insurance plan that doesn't require you to get a referral from a primary care physician to see other doctors. Most PPOs allow you to see any doctors or providers in their network.

Premium

A premium is a fee you pay to your insurance company for health plan coverage. This is usually a monthly cost.

Prescription Drug Formulary

A Prescription Drug Formulary is a list of all the prescription drugs covered by your health insurance.

Preventive Care

Preventive care is medical care that aims to prevent serious diseases and injuries. These include immunizations, physicals, screenings, and more.

Primary Care Physician

A Primary Care Physician is a doctor that oversees and monitors your medical care under some plan types. PCPs also may be responsible for referrals to specialists.

Provider Network

A provider network is a group of doctors, hospitals and other specialists who agree with an insurance company to treat its clients. It's usually less expensive for you to see a doctor within your provider network.

Q

Qualifying Life Event (QLE)

Qualifying Life Events (QLE) are life changes that allow you to enroll in a new health insurance plan during a Special Enrollment Period. These include having or adopting a child, losing other coverage, marriage, a change of income and moving.

Quantity Limit

Medicare Part D plans may have quantity limits on certain prescription drugs. For example: you may only be allowed 30 pills per month. You can file an exception request if you and your healthcare provider believe this could affect your health.

R

Rehabilitation Services

Rehabilitation improves your skills for daily activities after an injury or illness. The services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation in both inpatient and outpatient settings.

S

Skilled Nursing Facility Care

Skilled nursing facilities provide in-patient extended care with trained medical professionals to recover from injury or illness and activities of daily living. These facilities provide physical and occupational therapists, speech pathologists and medical professionals assist with medications, tube feedings and wound care. Skilled nursing stays are usually covered under Medicare Part A.

Special Enrollment Period

A Special Enrollment Period is a 60-day period outside the Open Enrollment Period when you can enroll or change your coverage. Special Enrollment Periods are only granted if you experience a Qualifying Life Event. These are special circumstances that may change your health insurance needs. Some Special Enrollment Periods can be up to 90 days.

Step Therapy

Step therapy is used with Medicare Part D plans. Your health plan may require you to take a less expensive medication before approving a more expensive drug. You can request an exception if you and your healthcare provider think it could affect your health.

Subsidies

Subsidies are tax breaks meant to lower the monthly premium payment you make to your health insurance company. Households with an income within 100-400% of the Federal Poverty Level may qualify. Also known as "Premium Tax Credits".

Summary of Benefits and Coverage

The Summary of Benefits and Coverage (SBC) is a comprehensive list of all the benefits included in your health insurance policy.

T

The Health Insurance Marketplace

The Health Insurance Marketplace is a virtual space where you can shop and enroll in health insurance. Marketplaces can be run by the government, your state or private companies. Marketplaces can be accessed online, by phone, or in-person.

W

Waiting Period

A waiting period is the amount of time you have to wait between enrolling in a health plan and when your coverage starts.

This website is operated by GoHealth, LLC., a licensed health insurance company. The website and its contents are for informational and educational purposes; helping people understand Medicare in a simple way. The purpose of this website is the solicitation of insurance. Contact will be made by a licensed insurance agent/producer or insurance company. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. Our mission is to help every American get better health insurance and save money.

If you’re looking for the government’s Medicare site, please navigate to www.medicare.gov.