actuary - a mathematician in the insurance field. Responsible for calculating premiums, developing plans and defining underwriting risk.
agent - a licensed individual who represents several insurance companies and sells their products.
Annual Election Period - The Medicare Annual Election Period runs from October 15 through December 7 each year. During this time you may make certain changes to how you receive your Medicare benefits, effective the following January 1.
appeal - An appeal is the action you can take if you disagree with a coverage or payment decision made by Medicare, your Medicare health plan, or your Medicare Prescription Drug Plan. You can appeal if Medicare or your plan denies one of these:
- Your request for a health care service, supply, item, or prescription drug that you think you should be able to get
- Your request for payment for a health care service, supply, item, or prescription drug you already got
- Your request to change the amount you must pay for a health care service, supply, item or prescription drug.
You can also appeal if Medicare or your plan stops paying, providing, or paying for all or part of a health care service, supply, item, or prescription drug you think you still need.
benefit - reimbursement for covered medical expenses as specified by the plan.
benefit verification letter – if you need proof you are receiving Social Security benefits, Supplemental Security (SSI) Income or Medicare, you can request a benefit verification letter online by using your mySocial Security account. This letter is sometimes called a "budget letter," a "benefits letter," a "proof of income letter," or a "proof of award letter." If you can’t or don’t want to use your online account, or you need a letter for someone other than yourself, you can call Medicare at 1-800-772-1213 (TTY 1-800-325-0778), Monday through Friday from 7 a.m. to 7 p.m.
brand-name drug - prescription drug which is marketed with a specific brand name by the company that manufactures it. May cost insured individuals a higher co-pay than generic drugs on some health plans. (see "generic.")
broker - a licensed insurance professional who obtains multiple quotes and plan information in the interest of his client.
carrier – the insurance company insuring the health plan.
claim - a formal request made by an insured person for the benefits provided by a policy.
CMS – Centers for Medicare and Medicaid Services. The federal agency that runs the Medicare, Medicaid, and Children's Health Insurance Programs, and the federally facilitated Marketplace.
COBRA (Consolidated Omnibus Budget Reconciliation Act) - Federal legislation that requires group health plans to provide health plan members the opportunity to purchase continued coverage in the event their insurance is terminated.
co-insurance - the percentage of covered expenses an insured individual must pay for the services provided. If applicable, co-insurance applies after the insured pays the deductible and is only required up to the plan's Out of Pocket Maximum (Stop Loss).
co-pay/co-payment - the dollar amount an insured individual must pay toward the cost of a particular benefit. For example, a plan might require a $10 co-pay for each doctor's office visit.
coverage gap/donut hole – Most Medicare Prescription Drug Plans have a coverage gap (also called the "donut hole"). The coverage gap is a temporary limit on what your Medicare Part D prescription drug plan or Medicare Advantage Prescription Drug plan will pay for prescription drug costs. While you’re in the coverage gap, you’ll pay higher costs for brand-name and generic drugs. The coverage gap applies to both stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans.
creditable coverage – in reference to Prescription Drug Plans, coverage that is expected to pay, on average, at least as good as Medicare’s standard prescription drug coverage.
deductible - the dollar amount an insured individual must pay for covered expenses during a calendar year before the plan begins paying co-insurance benefits.
effective date - the date requested for insurance coverage to begin.
exclusions - expenses which are not covered under an insurance plan. These are listed in the Certificate Booklet/Policy.
Explanation of Benefits (EOB) - a carrier's written response to a claim for benefits. EOB’s are provided for Medicare RX Plans, and by Medicare for medical benefits.
Extra Help - A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles, and coinsurance. (see Low Income Subsidy)
generic drug - the chemical equivalent to a "brand name drug." These drugs cost less, and the savings is passed onto health plan members in the form of a lower co-pay.
grievance – a complaint about the quality of care or service you received from a Medicare provider. For example, you may file a complaint if you have a problem calling the plan or if you're unhappy with the way a staff person at the plan has behaved towards you. You may file a grievance in accordance with your plan’s policy or by calling Medicare direct. However, if you have an issue with a plan's refusal to cover a service, supply, or prescription, you file an appeal (see appeal).
group insurance - an insurance contract made with an employer or other entity that covers individuals in the group.
HMO - Health Maintenance Organization – a type of healthcare organization that stresses early diagnosis and treatment on an outpatient basis. HMOs contract with specific health care providers to provide specified benefits, and in most instances enrollees must use the providers in the HMO network (see network). Most HMOs require enrollees to select a specific primary care physician (PCP) within the HMO network who will refer them to a specialist if deemed necessary. Some HMOs do not require referrals, and the enrollee is free to see any contracted network provider they wish.
ID card/identification card - card given to insured individuals which advises medical providers that a patient is covered by a particular health insurance plan.
in-network - describes a provider or health care facility which is part of a health plan's network. When applicable, insured individuals usually pay less when using an in-network provider.
IRMMA – Income Related Monthly Adjustment - Most people will pay the standard Part B premium amount. However, if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium. This extra charge may also be added to your Medicare Prescription Drug Plan.
LEP – Late Enrollment Penalty - In most cases, if you don't sign up for Medicare Part B or a Medicare Prescription Drug Plan when you're first eligible, you'll have to pay a late enrollment penalty for as long as you have Part B or a Medicare Prescription Drug Plan.
lifetime maximum benefit - the maximum amount a health plan will pay in benefits to an insured individual.
limitations - a restriction on the amount of benefits paid out for a particular covered expense.
Low income subsidy - Medicare offers a program called Low Income Subsidy, also known as Extra Help, for people with low incomes who qualify. If you are enrolled in Medicare Part D and have limited income and resources, you may automatically qualify for Low Income Subsidy. If you don’t automatically qualify for Low Income Subsidy, you may still apply and be determined to qualify for Extra Help from Medicare. If you do qualify, you’ll get help paying for your Medicare Part D costs, such as the premium, deductible, coverage gap, and cost sharing.
You are deemed automatically eligible for Extra Help if you are in one of the following circumstances:
- You are entitled to Medicare and get full coverage from a state Medicaid program.
- You get help paying your Medicare premiums through a Medicare Savings Program.
- You get Supplemental Security Income (SSI) benefits.
managed care - the coordination of health care services in the attempt to produce high quality health care for the lowest possible cost. Examples are the use of primary care physicians as gatekeepers in HMO plans and pre-certification of care.
Medicare - the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Medicare Advantage Plan - A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
Medicare Supplement - A Medicare Supplement Insurance (Medigap) policy is sold by private companies and works with original Medicare. It can help pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles.
network - a group of doctors, hospitals and other providers contracted to provide services to insured individuals for less than their usual fees. Provider networks can cover large geographic markets and/or a wide range of health care services. If a health plan uses a preferred provider network, insured individuals typically pay less for using a network provider.
out-of-network - describes a provider or health care facility which is not part of a health plan's network. Insured individuals usually pay more when using an out-of-network provider, if the plan uses a network.
out-of-pocket maximum - the maximum amount (per calendar year) an insured individual might pay in co-insurance payments and co-payments for benefits and services; if the out-of-pocket maximum is reached, the plan begins to pay 100% of charges.
plan administration - overseeing the details and routine activities of installing and running a health plan, such as answering questions, enrolling new individuals for coverage, billing and collecting premiums, etc.
point-of-service (POS) - health plan which allows the enrollee to choose HMO, PPO or indemnity coverage at the point of service (time the services are received).
pre-certification - an insurance company requirement that an insured obtain pre-approval before being admitted to a hospital or receiving certain kinds of treatment. It is best to contact your carrier to determine if pre-certification is required prior to receiving treatment to avoid delays or denials of paid benefits.
pre-existing condition - an illness, injury or condition for which the insured individual received medical advice, treatment, services or supplies; had diagnostic tests done or recommended; had medicines prescribed or recommended; or had symptoms of typically within 12 months (time periods may vary depending on state laws) prior to the effective date of insurance coverage.
PPO - Preferred Provider Organization - A network or panel of physicians and hospitals, and other providers contracted to provide services to insured individuals for less than their usual fees. PPO networks can cover large geographic markets and/or a wide range of health care services. If a health plan uses a preferred provider network, insured individuals typically pay less for using a network provider. The insured individual can choose from among the physicians in the network. The insured individual may also have the ability to go to non-network providers, but will pay a higher share of the cost of the services by going out of network.
premiums - payments to an insurance company providing coverage.
provider - any person or entity providing health care services, including hospitals, physicians, home health agencies and nursing homes. Usually licensed by the state.
referral within many managed care plans, transfer to specialty physician or specialty care by a primary care physician.
rider - a modification to a Certificate of Insurance policy regarding clauses and provisions of a policy. A rider usually adds or excludes coverage.
risk - uncertainty of financial loss.
small employer group - groups with 1 99 employees. The definition of small employer group may vary between states.
state mandated benefits - state laws requiring that commercial health insurance plans include specific benefits.
stop-loss - the dollar amount of claims filed for eligible expenses at which the insurance begins to pay at 100% per insured individual. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.
Third Party Administrator (TPA) - An organization responsible for marketing and administering small group and individual health plans. This includes collecting premiums, paying claims, providing administrative services and promoting products.
underwriter - entity that assumes responsibility for the risk, issues insurance policies and receives premiums.
Workers' Compensation Insurance - insurance coverage for work-related illness and injury. All states require employers to carry this insurance.