Navigating the wild world of health insurance can be confusing if you don’t have a grasp of all the acronyms and jargon being tossed about. Like any industry, insurance companies have their own language. Understanding these terms is important for two main reasons:
When choosing a plan, so that you get the best coverage possible for your needs, and
When you are interpreting your plan’s decisions regarding your claim coverage.
Cheat sheet of key health insurance terms
(in alphabetical order):
1. Co-Insurance** and Co-Payments
Co-insurance is a percentage of medical costs you are responsible for after meeting your deductible. These fees usually apply to hospital stays, surgeries, testing, or other procedures.
Co-Payments are a flat rate that you pay at the time of service for doctor visits. Watch out for high co-payments in your insurance plan.
Be aware of high co-insurance rates hidden behind low deductibles, and vice versa. While no one can truly predict emergencies, you can calculate your average doctor visits and overall health to make informed decisions about which formula may save you the most cash.
Once your deductible and out of pocket maximum amounts are met, these fees should go away. Be sure to check your policy to understand what you would need to pay out of pocket to get to that status.
3. DeductiblesThe amount you need to pay out of pocket before your insurance plan starts covering costs. Consider the balance between the deductible amount and your expected healthcare needs when selecting a plan.
4. HSA (Health Savings Account) These are tax-free accounts where you can save funds for healthcare expenses. Enrolling in a HSA-eligible health plan is an added benefit. Check with your health plan to see if they partner with HSA financial institutions. If not, ask your bank, credit union, or brokerage firm.
5. Not Covered by Insurance This term refers to expenses, treatments, services, or items that an insurance policy does not provide financial protection for. When a cost is not covered by insurance, the policyholder is responsible for paying the full amount out-of-pocket. This can include specific medical procedures, medications, or other health-related services that are explicitly excluded in the terms of the insurance policy. Examples of these may be cosmetic or elective procedures, or experimental procedures, treatments, or supplements.
6. In Network This refers to medical providers that have negotiated rates with your insurance company, and are “contracted” as a participating provider. Using in-network providers is more cost-effective because their services are covered by your insurance plan at a higher level. To save money, be sure your preferred hospitals and physicians are in-network.
7. Out of NetworkThese are providers without pre-negotiated rates with your insurance company. Out-of-network providers tend to charge higher rates and may not be covered by your insurance plan, or they are covered at a much lower level.
8. Out of Pocket Maximum This is the maximum amount you need to spend on deductibles, co-payments, and co-insurance in a year before your insurance covers everything.
9. Pre-Existing ConditionA health condition you had before enrolling with an insurance company. Under the Affordable Care Act (ACA) which began in 2014, health insurers are prohibited from denying coverage or charging higher premiums to individuals with pre-existing conditions. However, there may be waiting periods. Be sure to investigate how pre-existing conditions are covered in your plan.
10. Premium
The amount you pay your insurance company for coverage, usually on a monthly or annual basis.
11. ReferralAn official notice from a physician to an insurer recommending a patient see another specialist. Referrals may be required for certain specialty care visits.
Beyond the acronyms:
In addition to the terms above, another list you may find helpful are the full names of the forms insurance companies require for various tasks:
12. AOR Appointment of Representative: This form allows an individual or entity to appoint someone to act on their behalf for insurance claims. The form must be signed and dated by both the party and the representative, and include a written explanation of the representation's purpose and scope. The form also needs to include a statement that the party authorizes the representative to act on their behalf and to disclose identifiable information to them. This form is often used when the patient has conservators who need to be able to manage their care.
13. ROI Release of Personal Health Information: Submit this form to authorize (allow) your insurance company to release your personal and health information according to your instructions. To protect your privacy, this authorization is required by insurance (or hospitals/providers).
You may also call your insurance company and do a verbal release. This release is valid for 30 days. Most insurance companies still require this form to be sent via snail mail, not fax or email - so the verbal release helps bridge the gap until your documents are in place and their system is updated.
14. COC Continuity of Care Request Form: Continuity of care is a process that allows continued care for members who change insurance plans, or whose provider(s) are no longer participating in their provider network. Coverage depends on the terms and conditions of your plan. If you meet certain criteria, you may be eligible to continue treatment with your current doctor. This criteria typically involves a service area (meaning you cannot find another appropriate specialist who is a participating provider whiten a certain mileage radius), or your case is so complex that changing providers puts you in any health disadvantage.
14. PA A preauthorization form, also known as a prior authorization or pre-certification form, is a document that a health care provider fills out to get approval from a health plan before a patient receives a service or prescription. Preauthorization is a cost-control process that ensures a service is medically necessary and qualifies for payment coverage.
I hope these descriptions help you to understand your documentation, and point you to useful forms you may need to file with your insurance.