Insurance Terms
The maximum dollar amount your plan considers a valid charge for a specific medical service.
Allowed amount
Requires a primary care physician (PCP). Most common type for individuals
Strictly in-network care only (except emergencies).
Lower monthly premiums and out-of-pocket costs.
What is a Health Maintenance Organization (HMO)?
The set amount of money you must pay out of your own pocket for medical care before your insurance starts paying.
What is deductible?
A formal bill or request for payment sent by your doctor or hospital to your insurance company.
What is a claim?
Doctors or facilities that do not have a contract with your insurance plan, meaning care usually costs much more or is not covered.
Out-of-Network
Any specific medical service, condition, or treatment that your health insurance plan simply does not cover.
Exclusion
No PCP or specialist referrals needed. Price ^ as age ^ Most common type offered by employers
Covers out-of-network care at higher rates.
Highest monthly premiums and flexibility.
What is a Preferred Provider Organization PPO?
A flat, fixed dollar fee (such as $20) you pay at the time you get a medical service or fill a prescription.
What is copay?
A statement sent by your insurance company showing what medical treatments were billed, what was covered, and what you owe.
What is an Explanation of Benefits (EOB)?
Approval you or your doctor must get from the insurance plan before it will cover a specific test, procedure, or drug.
Prior Authorization
Doctors, clinics, and hospitals that have a formal contract with your health insurance plan to provide services at lower, agreed-upon rates.
In-Network
In-network care only (except emergencies).
No referrals required to see specialists.
Moderate premiums compared to HMO/PPO.
Exclusive Provider Organization EPO
Your share of the cost for a covered service, figured as a percentage of the allowed amount (such as paying 20% while insurance pays 80%).
What is coinsurance?
A special job-based account where you put pre-tax money aside to pay for qualified medical costs within that year.
What is a Flexible Spending Account (FSA)?
Joint federal-state program for low-income households.
Provides free or low-cost medical coverage.
Eligibility scales based on federal poverty guidelines.
Medicaid
Health care services or supplies needed to prevent, diagnose, or treat an illness, injury, or its symptoms safely.
Medically Necessary
Blends HMO coordination with PPO out-of-network options.
Requires a PCP and specialist referrals.
Out-of-network care costs extra with paperwork.
POS- Point of Service
The regular amount—often paid monthly—that you or your employer pay to keep your health insurance active.
What is a premium?
A tax-advantaged savings account for individuals with high-deductible plans that can be used to pay for medical expenses.
What is a Health Savings Account (HSA)?
When an out-of-network provider bills you for the difference between their total charge and the plan's allowed amount.
Balance Billing
Your main family doctor who handles everyday health needs and coordinates specialized medical care.
Primary Care Physician PCP
Federal program for adults aged 65 and older.
Covers younger individuals with qualifying disabilities.
Split into Parts A (hospital), B (medical), C (advantage), and D (drugs).
Medicare
The absolute highest amount you will have to pay for covered services in a year; after this is reached, insurance pays 100%.
What is Out of Pocket Maximum?
Routine health checks, screenings, and immunizations designed to catch or prevent illness early, usually provided at no extra cost.
What is preventive care?