We have been tossing about all sorts of health insurance terms over the past few days. In the interest of consumer protection, our resident insurance-speak victims support group advocate and translator would like to offer some clarification:
A Brief Glossary of Health Insurance Terms
- Agent: A person licensed to sell insurance. He or she might work alone or with a large firm and may sell all sorts of insurance; some agents work as employees of an insurance company and sell plans from just that company. Make sure your agent is licensed to sell health insurance, by the way.
- Carrier: This is another name for ‘insurance company’.
- Claim: A request for payment of benefits received, or services rendered. A billing record is generated and submitted by a provider or a plan subscriber, using electronic or paper media.
- Co-insurance: A cost-sharing arrangement, under which an insured pays a fixed percentage of the cost of medical care after the deductible has been paid. For example: with an 80/20 plan, the insurance company pays 80% of the allowable charge, while the insured pays the remaining 20%.
- Conversion privilege: The right given to an insured to change insurance without proof of insurability; usually this applied to a person seeking individual coverage upon termination of coverage under a group policy.
- Co-pay: Under this arrangement, an insured pays a specified dollar amount for various services; the insurance company pays the rest. This amount is normally payable by the insured at the time a service is rendered.
- Deductible: The dollar amount which an insured agrees to pay, per claim or per accident, before the insurance company pays their portion.
- Guaranteed coverage: A term from underwriting, describing the fact that a small business group cannot be turned down for health insurance because of poor health conditions, current or past.
- High Risk Pool: This is health coverage for people who have been denied health insurance because of their serious medical conditions. The plan designs vary from state to state.
- Max Out-of-Pocket: The most, in dollars, that an insured will pay considering co-insurance, co-payments, deductibles, and so on.
- Pre-existing conditions: When you apply for health insurance, the insurance company takes your medical history. A ‘pre-existing condition‘ is an illness, physical or mental, that was treated (or should have been, in some cases) before getting health insurance.
- Premium: The payment an insured makes to keep a policy in place. With health coverage, usually monthly.
- Providers: The doctors, clinics, hospitals and any other health professionals that provide care and services to an insured.
- Qualifying Event: An occurrence – a death, termination of employment, divorce and so on – that changes an insured’s protection under COBRA, which requires continuation of benefits under a group insurance plan for former employees and their families who might otherwise lose health care coverage.
- Stop Loss: A special type of re-insurance that protects an individual or group who goes over their coverage limit.