Below is a glossary of some
common terms used in the
medical care insurance
industry. We have tried to
provide consumers with some
simple definitions to better
understand their policies
and other terminology used
in the industry.
One step below a hospital,
an acute care facility gives
advanced medical and nursing
services to bring you back
to medical.
In the insurance industry,
a
California medical insurance agent is appointed by an
insurance company to sell
insurance policies. The
agent represents the
insurance company, not the
insured.
Your signed authorization to
your doctor or hospital
(medical provider) assigning
payment to be made directly
to them for your medical
treatment.
(See “board and care
facility.”)
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Organizing people together
by age groups to calculate
premiums.
A board and care facility
offers no nursing services.
It is designed for people
who are unable to take care
of their day-to-day feeding,
hygiene, and/or ambulatory
needs. Sometimes called an
“assisted living facility,”
their orientation is for
provision of service over
the "long term."
A person licensed by the
State to
sell
California insurance
coverage with multiple
medical plans or insurers.
The broker represents you
and not the insurance
companies. The broker helps
you shop for the best
policy. Note that no
license is necessary to sell
HMO products in California.
Every day that insurance
companies are open for
business, which excludes
Saturday, Sunday, and state
and federal holidays.
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Every day of the calendar
month, which includes
Saturday, Sunday, and state
and federal holidays.
However, if any action tied
to a time frame in an
insurance policy or CDI
regulation or code falls on
a Saturday, Sunday, or state
or federal holiday, then the
action is postponed to the
next calendar day that does
not fall on a Saturday,
Sunday, or state or federal
holiday.
A flat per patient fee paid
to providers no matter how
many services they have
provided.
A document issued to a
member of a
California group medical
insurance plan showing
evidence of participation in
the insurance.
A written statement from
your prior insurance company
or medical plan documenting
the length of time you were
covered.
A medical condition or
disease that goes on for a
long period of time.
Examples are diabetes and
cystic fibrosis.
A notification to your
insurance company that
payment is due under the
policy provisions.
Once you have met your
deductible, you pay
coinsurance for additional
medical care. It is a
percentage of the billed
charge. For example, your
insurance company might pay
80%, and then you would pay
20%. It is similar to a
co-pay, but is a percentage
instead of a dollar amount.
The portion of charges you
pay to your provider for
covered medical care services
in addition to any
deductible. For example,
$20 for an office visit or
$15 for a prescription
drug. It is similar to
coinsurance, but it is a
dollar amount instead of a
percentage of the charges.
The scope of protection
provided by an insurance
contract which includes any
of the listed benefits in an
insurance policy.
The number of months you had
medical insurance in place
before your current or new
policy became effective.
Creditable coverage must be
counted towards any
pre-existing condition
exclusion in either an
individual or group
California policy.
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The amount you must pay for
medical services each year
before your insurance
begins paying.
An insurance company
decision to withhold a claim
payment or
preauthorization. A denial
may be made because the
medical service is not
covered, not medically
necessary, or experimental
or investigational.
A list of drugs that
an insurer will pay for.
Drugs that are not on the
formulary (“off-formulary”)
are sometimes covered but
are more expensive (see
“excluded drugs”). To you,
the cheapest drugs are
generic drugs that are on
the formulary, and the most
expensive drugs are
name-brand drugs that are
off-formulary.
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(see “pre-existing
condition”) A period of time
before benefits are payable.
In evidence-based
medicine, treatment success
is measured by a careful
study of the outcome, using
both the clinical expertise
of the provider, as well as
the most up-to-date research
available.
Drugs not covered by the
insurance policy.
Conditions or
circumstances spelled out in
an insurance policy which
limit or exclude coverage
benefits. It is important to
read all exclusion,
limitation, and reduction
clauses in your medical
insurance policy or
certificate of coverage to
determine which expenses are
not covered.
A drug, device, procedure,
treatment plan, or other
therapy which is currently
not within the accepted
standards of medical care.
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A system in which you pay
the provider for each single
service or procedure.
(see “drug formulary”)
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A drug that is
similar to a name-brand drug
but not covered by original
patents and therefore
cheaper. For example, the
generic for the name-brand
“Vicodin®” is “hydrocodone.”
If you buy a generic drug,
you usually pay less co-pay
(see “name-brand drugs”).
A specified period
immediately following the
premium due date during
which a payment can be made
to continue a policy in
force without interruption.
This applies only to Life
and Medical policies. Check
your policy to be sure that
a grace period is offered
and how many days, if any,
are allowed.
When groups of individuals
are covered under one
insurance contract. Usually
people are offered group
medical plans by their
employers (see “California
individual
medical plan”).
A
California medical insurance policy
that must be issued
regardless of any
pre-existing medical
condition.
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Medical care provided in your
home.
Care given to someone
expected to live less than
six months due to a terminal
disease or condition.
Hospice care can be given at
home or in a hospice center
or a board and care
facility.
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A process where expert
medical professionals, who
have no relationship to your
medical insurance company or
medical plan, review specific
medical decisions made by
the insurance company.
California law provides for
an Independent Medical
Review (IMR) program, which
is administered by the CDI
or the DMHC depending upon
what type of coverage you
have (indemnity or HMO).
A form of medical
insurance designed to cover
just one person (and often
immediate family members),
as opposed to someone
covered by a group plan (see
“group medical plan
California”).
A
California
insurance company
must be licensed by the
Department of Insurance to
sell
California medical insurance. The
insurer issues policies
which outline coverage. An
insurance policy is a
contract between the insured
and the insurance company.
You pay your premiums to an
insurance company. They
then pay some or all of your
medical provider’s bills
when you need treatment (see
“provider”).
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A dollar limit on how
much the insurance company
will pay in your lifetime.
An insurer may, for example,
cover up to $1 million over
your lifetime. Above this
they will pay nothing.
Long Term Care is the
assistance or supervision
you may need when you are
not able to do some of the
basic "activities of daily
living" (ADL) like bathing,
dressing or moving from a
bed to a chair. Examples of
conditions in which you
might need assistance with
ADLs are: injury, illness,
advanced age, or mental
deterioration.
Managed care generally
emphasizes cost control and
may provide coverage for
preventive medicine. There
are restrictions on the
types of procedures that can
be used for each medical
condition. The amounts that
can be charged for the
procedures are described by
the terms and conditions of
the plan.
A
high-limit, high
deductible California plan to cover
catastrophic illness or
injury. Major medical used
to be called “catastrophic
insurance.”
A drug, device,
procedure, treatment plan,
or other therapy that is
covered under your medical
insurance policy and that
your doctor, hospital, or
provider has determined
essential for your medical
well-being, specific
illness, or underlying
condition.
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A drug sold under a
name-brand, and covered by
original patents (for
example, the name brand for
hydrocodone is “Vicodin®”).
Name-brand drugs are more
expensive than generic
drugs, and you usually have
a higher co-pay for them
than generics (see “generic
drugs”).
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The time (usually a preset
two-week or one-month period
annually) when you can
change medical plans under
your
employer's group plan
in California.
You don't need a
prescription to obtain
over-the-counter drugs.
The amount of money
you pay for medical services
after insurance has paid its
contribution.
The most you will
have to pay in a year for
deductibles and coinsurance
for covered benefits.
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The written contract between
an individual or group
policyholder and an
insurance company. The
policy outlines the duties,
obligations, and
responsibilities of both the
policyholder and the
insurance company. A policy
may include any application,
endorsement, certificate, or
any other document that can
describe, limit, or exclude
coverage benefits under the
policy.
The ability to
purchase
California individual medical insurance
without being denied of
coverage because of a
pre-existing condition.
Some insurance companies
require authorization from
them before they will pay
for medical services like
hospitalization or surgery.
Any illness or medical
condition for which you have
received medical advice or
treatment during the six
months prior to obtaining
medical insurance. Group
medicalcare policies cover
pre-existing conditions
after you have been insured
for six months, and
individual policies cover
pre-existing conditions
after you have been insured
for one year. Reference CIC
Section 10198.7. Creditable
coverage must be counted
towards any pre-existing
condition exclusion in
either an individual or
group policy.
The money you pay for medical
insurance (see “rating
factors”).
You must have a doctor's
prescription to receive a
prescription drug.
Medical care designed to
prevent disease or discover
and treat disease in the
early stage. Examples:
Annual physical exam, PAP
Smear, cholesterol
screening, mammography,
infant vaccination, etc.
Your Primary Care Physician
(“PCP”) is the doctor you
choose to provide basic
medical care. In an HMO,
your PCP must refer you to a
specialist if you need to
see one.
Any person or place that
provides medical care or
prescription drugs.
Providers can be doctors,
hospitals, pharmacies,
chiropractors, etc. (see
“insurance company”).
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medical insurance
premiums are calculated
using many rating factors.
Rating factors have much
more influence on individual
policy premiums than on
group polices. Rating
factors can include:
• Age: the older you
are, the more you might
pay.
• Medical: the poorer
your medical, the more
you might pay.
• Chronic conditions:
having one or more
chronic or existing
conditions can increase
your premium.
• Smoking/alcohol use:
some companies charge
more if you use tobacco
or alcohol.
• Gender: some
insurance plans charge
more depending upon your
gender.
• Geographic region:
companies break-down
coverage areas into 6-8
regions. Which region
you live in can affect
your premium.
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Often called a
“SNF.” A SNF provides
medical care under the
supervision of a medical
professional or technician,
and dispenses medications,
performs diagnostics, and
can do minor surgery.
In California's
insurance code, a small
employer is anyone who
employs from 2-50 people.
The employer(s) can be
included in this number.
An insurer may pay
100% of covered benefit
charges after you have met
your deductible and
coinsurance requirements,
and your
out-of-pocket
maximum.
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Anyone who pays for
medical care other than you.
Usually your insurance
company. When an insurer
contracts with an entity to
pay on their behalf.
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The amount that your
insurance company determines
is the normal payment range
for a specific medical
procedure performed within a
given geographic area. If
the charges you submit to
your medical insurance
company are higher than what
is considered normal for the
covered medical care
services, then your medical
insurance company may not
allow the full amount
charged to you.
Insurance companies
and hospitals watch their
costs and quality by having
medical personnel review
selected medical cases.
They look at the types and
frequency of medical
services given and the
charges associated with
them.
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