Glossary of Terms

A

Alternative Medicine - A holistic or whole mind/body approach to health care that complements conventional medicine. Many different alternative treatments exist, including acupuncture; herbal medicine; chiropractic care; and mind/body techniques such as relaxation, visualization, talk therapy, hypnotherapy, yoga, and meditation.

Appeal - review of a health plan decision regarding a patient's health care with which the patient and/or his or her doctor disagrees. An "appeal" can refer to both review through the plan's own grievance process and a review by other outside decision-makers, such as the Department of Managed Health Care and independent medical review organizations.

Authorization - approval by a health care plan required in order for a patient to receive health care, including specific treatments, procedures or tests.

B

Behavioral Health - an umbrella term that includes mental health and substance abuse, and frequently is used to distinguish from â€œphysicalâ€ health.

C

Cafeteria Plan - An arrangement under which employees may choose their own benefit structure, allowing employees to tailor their benefits package to best meet their specific needs.

Capitation payment - a fixed, lump-sum paid to doctors by health care plans, typically on a monthly basis, to care for all patients belonging to that health care plan.

Catastrophic Health Insurance - Health plans that only cover "major medical" expenses, usually through high deductibles and low monthly premiums. These plans typically cover only major hospital and medical expenses above a certain deductible, while the insured pays out-of-pocket for everything else, such as routine doctor visits and prescription drugs.

Choosing a Health Insurance Plan - At some point, whether covered by their employer or a publicly-sponsored plan, most people will have to choose one plan from a variety of options. The primary factors to consider are services, choice, location, and cost.

Services - the types of medical services covered by the insurer. Do the services covered meet the individual's and their family's current or anticipated health needs.
Choice - the specific health providers that the individual will be able to choose from to seek medical care that will be covered by the insurer
Location - are the places where covered care is provided convenient to the individual's place of work or residence
Cost - the total expense for coverage including any out-of-pocket expenses, co-payments, deductible, coinsurance, and premium.

Chronic condition or illness - a condition or illness that requires ongoing treatment for a long period of time that may extend over a person's entire lifetime.

COBRA Coverage - If you voluntarily resign from a job or are terminated for any reason other than "gross misconduct," you are guaranteed the right to continue your former employer's group plan for individual or family health insurance for up to 18 months at your own expense. In many cases, your spouse and dependent children are also eligible for COBRA coverage, sometimes for as long as three years.

Coinsurance - The percentage of a person's medical costs they will have to pay after they reach any deductibles that apply.

Community Rating - insurers are required to charge the same price to every policyholder, regardless of age, sex or any other indicator of health risk. â€œModified community ratingâ€ is more common, and allows price differences based on age and sex.

Continuity of care - medical treatment received without interruption.

Contract - an agreement between a health plan and a patient or his or her employer that describes what health care services are covered by the plan, how much the plan will pay for those services, and what premiums must be paid by the patient or his or her employer. A plan usually also has a contract with certain doctors who will provide health care services to members of the plan.

Contracted provider - a hospital, doctor, or other health care provider who has an agreement with a health care plan to provide health care services to members of the plan.

Conventional Medicine - Mainstream medical care provided by medical doctors and nurses.

Co-Payment (Co-Pay) - A flat dollar amount paid for a medical service by an insured person. Insurance companies use co-payments to share health care costs although the co-pay is often only a small portion of the actual cost of the medical service.

Covered Services - Categories of service that may or may not be included under an insurance plan: 1) doctor's visits; 2) prescription drugs; 3) preventive care; 4) mental health benefits; 5) maternity care; 6) dental care; and 7) vision care.

D

Deductible - The portion of any medial claim that is not covered by the insurance provider. It is normally quoted as a fixed amount and is a part of most policies covering losses to the policy holder. The deductible must be "met", that is, paid by the insured, before the benefits of the policy can apply. Denial of care - a decision made by a health care plan not to pay for (or provide coverage for) a particular health care service or product.

Deregulation - Proposals that would result in much less regulation of the private insurance market which advocates claim would result in increased competition and a decrease in cost.

E

Employer Mandate - Requirement that employers offer employer-sponsored health insurance to employees.

Employer-Provided Health Insurance - Health insurance coverage provided to employees from their employer. The employer usually pays some or all of the monthly premium of fee for each employee covered by the plan.

ERISA, "Employee Retirement Income Security Act of 1974" - a federal law that regulated pension, health and welfare benefits offered by employers to their employees. Under ERISA, some employer group health plans are exempt from state laws and regulations that govern insurance.

Experimental or investigational treatments - a treatment that a doctor recommends for a particular illness that may not be the standard method of treatment; health care plans may often refuse to cover costs for treatments that they consider experimental or investigational.

F

Federal Poverty Level (FPL) - The set minimum amount of income that a family needs for food, clothing, transportation, shelter and other necessities. FPL varies according to family size. The number is adjusted for inflation annually. Public assistance programs, such as Medicaid, define eligibility income limits as some percentage of FPL.

Fee-for-Service Plan - Health care coverage in which doctors and other health care providers receive a fee for each service such as an office visit, test, procedure, or other health care service. Also known as "indemnity plan".

Flexible Spending Accounts - An employee benefit offered by the employer that allows employees to deduct money from their paycheck to pay for qualified expenses such as health care (including health insurance premiums, deductibles and co-payments.) Flexible Spending Accounts are also known as Cafeteria Plans or Section 125 Plans.

G

Guaranteed Issue - The right to purchase insurance without physical examination; the present and past physical condition of the applicant are not considered. (Many states presently allows insurance companies to deny coverage for pre-existing conditions).

Grievance - a complaint by a patient to the administration of a health care plan; such complaints may relate to quality of care, a denial or delay of coverage for a treatment or product, or disputes over the amount that a plan has paid towards health services received.

Grievance review process - process that all health plans are required to establish internally in order to review complaints by patients about any decisions by the plan that negatively impact a patient's ability to receive quality health care. The Department of Managed Care also has a grievance review process in place that will review patients' grievances if they receive no satisfactory resolution through their health plan.

Group Insurance - Insurance plans offered to groups of people (usually through an employer, union, professional association, or social or civic group) at a cheaper rate than an individual could get on their own through a sort-of group discount.

H

Health Insurance Portability And Accountability Act or HIPAA (also known as the Kassebaum-Kennedy Act) - the federal law designed to allow employees to move freely from one job to another without the risk of becoming uninsured for their most serious health problems. This law sets limits on the ability of health care plans to exclude coverage for "pre-existing conditions."

Health Insurance Purchasing Cooperatives - Public or private organizations that secure health insurance coverage for the workers of all member employers by utilizing greater bargaining clout with health insurers.

Health Maintenance Organization (HMO) - A type of Managed Care Organization (MCO) that provides a form of health insurance coverage fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. Under this model, providers contract with an HMO to receive more patients and in return usually agree to provide services at a discount. This arrangement allows the HMO to charge a lower monthly premium.

Health Plan - A health insurance program offered by health insurance companies. A variety of plans are usually offered according to the health and financial conditions of the customer.

Healthcare Industry - One of the world's largest and fastest-growing industries, consuming over 10 percent of gross domestic product (GDP) of most industrialized nations. In 2003, health care costs paid to hospitals, doctors, nursing homes, diagnostic laboratories, pharmacies, medical device manufacturers and other components of the health care system, consumed 15.3 percent of the GDP of the United States, the largest of any country in the world.

High Deductible Plans - Health plans with typically low monthly premiums that only begin paying benefits once a high threshold of medical expenses has been surpassed.

High-Risk Pool - A subsidized health insurance pool organized by some states as an alternative for individuals who have been denied health insurance because of a medical condition.

I

Independent practice associations (IPA) - an association of physicians and other health care providers, including hospitals, who contract with an HMO to provide services to enrollees, but usually still see non-HMO patients and patients from other HMOs.

Independent review process - a process administered by the Department of Managed Health Care to review health plans' denials of care decisions based on medical necessity. The process is "independent" of your health care plan.

Individual Insurance - An insurance plan whose costs are borne solely by the individual, usually costing more than group or pooled insurance.

Individual Mandate - A proposal to require all residents of a particular state or the nation to have some type of minimum level of health insurance coverage.

In-Network Provider - A healthcare provider that has contracted with a managed care organization (MCO) to provide medical services, also known as "preferred providers". In-network providers are "approved" by the MCO which means the services they provide to the MCO customer are covered.

M

Managed Care - An effort to control escalating health care costs by the health insurance industry, which defines a reasonable maximum fee that health care providers may charge for any given service. Providers are bound to accept these maximum fees if they wish to be listed in directories of specific insurance companies, which are provided to their policy holders as referral directories of "approved" physicians. (Administered primarily by private companies called "Managed Care Organizations").

Mandated Benefits - Medical procedures and services that insurers are required to cover by law. The number and type of mandates vary from state-to-state.

Medicaid - The US health insurance program for individuals and families with low incomes and resources. It is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Medicaid is the largest source of funding for medical and health-related services for people with limited income.

Medicaid Managed Care Organization - Serves at the managed care organization overseeing the provision of primary care and other medical services to enrollees in Medicaid.

Medical Savings Account - An individual's deposits into a special medical savings account to cover anticipated out-of-pocket expense for things like paying an insurance premium, paying a deductible, covering office visits, and paying for prescription drugs, are 100% tax-deductible.

Medicare - A health insurance program administered by the United States government, covering people who are either age 65 and over, or who meet other special criteria.

N

No Cost Insurance - Available when household income is below $9,700 per year for an individual (100% of FPL).

O

Open Enrollment - The limited period once per year when individuals can switch from one health plan to another.

Out-of-Network Provider - A medical provider that is not "approved" by the managed care organization, which means services received may not be covered by the MCO, leaving the insured customer to pay most or all of the bill.

Out-of-Pocket Expense - Medical expenses that are not covered by insurance and paid for directly by the individual.

P

Participating provider - a hospital or doctor who has a contract with a health care plan to provide health care services to the patients of that plan for a specified rate. Patients will usually be charged lower or no out-of-pocket fees when they use participating providers.

â€œPay or Playâ€ - A proposal that will require employers who do not offer group insurance coverage to employees to contribute a certain percentage of their payroll to a state administered fund to cover the uninsured.

Payroll Tax - A proposal to tax employers based on their total payroll to help pay for covering the uninsured.

Point-of-Service Plan (POS) - POS plans are almost a hybrid of HMO and PPO plans. Like an HMO, the individual designates an "in-network physician" to be their primary care provider. However, like a PPO, a POS plan lets the individual go "out-of-network". But when the individual goes out-of-network, they will have to pay most of the cost, unless your primary care physician refers them to an out-of-network doctor. Then, the health plan will pick up the tab.

Portability - Requirement that health plans guarantee continuous coverage without waiting periods for persons moving between plans.

Pre-existing condition - a condition that was diagnosed or treated within a certain period (six months under CA and federal law) prior to the patient's joining a particular health care plan. Plans may only limit coverage for pre-existing conditions for up to six months, in most cases.

Preferred Provider Organization (PPO) - Insurance plans in which the policy-holder is free to choose his/her own physician, although they will generally receive greater benefits returns if they see a pre-approved "in-network" caregivers and facilities. These "network" caregivers and facilities are independent of insurance company ownership, and may hold contracts for reimbursement with multiple insurers.

Premium - A monthly amount paid by insured persons toward the costs of their coverage.

Pre-Tax Dollars - If an individual's gross annual salary is $40,000 per year, they pay state taxes on that amount, less any deductions. Under the new law, if the same individual spends $2,000 that year to pay for their health insurance premium, they are taxed at $38,000 of income, less any deductions.

Primary Care Physician (PCP) - A physician who is in general medical types of patient care. This is usually the primary point-of-contact for an individual seeking care or in need of a referral to a specialist.

Private Health Insurance - Insurance purchased by an individual or a group (usually through an employer) from an insurance company to cover a person's healthcare expenses.

Profit Cap - A proposal to limit the amount health insurance companies can profit.

Provider - An appropriately credentialed and licensed provider of health services such as a doctor, nurse, specialist, hospital, health center, home health agency, etc.

Provider Tax - A proposal to impose a fee on physicians and hospitals to pay for the cost of state-sponsored coverage of the uninsured.

Provider Reimbursement - The amount providers are reimbursed by the stateâ€™s Medi-Cal program. A proposal would increase that amount by $750 million to expand access to providers.

Public Health Insurance Systems - Where the residents below a certain income level are insured by the State.

R

Referral - Most health insurance plans require an individual seeking specialized care to get permission or a referral from their primary care physician. Otherwise, the care provided by the specialist may not be covered by the insurer.

S

Safety Net Care - Replaces the Uncompensated Care Pool on October 1, 2007. Directs state funds to providers of medical care that are uncompensated for treatment of the uninsured.

S-CHIP (State Children's Health Insurance Program) - A national program in the United States designed for families who earn too much money to qualify for Medicaid, yet cannot afford to buy private insurance. The program was created to address the growing problem of children in the United States without health insurance.

Section 125 Cafeteria Plan - An employee benefit offered by the employer that allows employees to deduct money from their paycheck to pay for qualified expenses such as health care (including health insurance premiums, deductibles and co-payments.) Cafeteria Plans are also known as Flexible Spending Accounts or Section 125 Plans.

The employee's contributions to a cafeteria plan are exempt from federal income taxes and payroll taxes. These exempt contributions also reduce the employer's share of the payroll tax, since the contribution reduces the employee's gross pay.
Companies interested in starting a Section 125 Cafeteria Plan must draft a written agreement detailing the plan. The plan must be offered to all employees with no preferential treatment to any single employee or class of employee, such as top management.
Employers will file Form 8889 with their federal and state tax return.

Single-Payer Health Care - A health care system in which a single entity, typically a government-run organization, acts as the administrator (or "payer") to collect all health care fees, and pay out all health care costs.

Specialist - A medical provider with a very specific expertise such as: surgeon, dermatologist, orthopedist, neurologist, and cardiologist, among others.

Spouse/Partner-Benefits - Most health insurance plans, particularly those provided by employers, allow for the employee's spouse or partner to also be covered by the employer-sponsored plan, although usually at an additional cost to the employee. Dependent children are also often covered by the employee-sponsored plan at additional employee expense.

Subsidized Health Insurance - Defraying of costs for insurance from a private insurance company through payments or discounts from the government to individuals or employers.

Subsidy - Amount of money provided by the government to off-set some of the cost of health insurance premiums; available if household income is below a certain level.
Super Majority - A two-thirds vote in the both houses of the Assembly is required in order to impose a new tax or raise existing ones.

T

Tobacco Tax - A proposal to increase the current level of tax on cigarettes to raise funds to cover the uninsured.

U

Uncompensated Care Pool - Reimburses hospitals and community health centers that provide care to eligible low-income uninsured people. Under the new plan, this pool will be eliminated as everyone in Massachusetts will be required to have some kind of health insurance.

Under-Insured - An individual with health insurance that is inadequate to meet their healthcare needs.

Uninsured - An individual with no health insurance, currently 46 million Americans.

Universal Health Care - A health care system in which all residents of a geographic or political entity have their health care paid for, regardless of medical condition or financial status.

Glossary of Terms

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