Understanding your health insurance policy and the benefits to which you're entitled can improve your health care and reduce your costs.
The following glossary of health insurance terms can help you employ your coverage to the fullest.
Allowable expenses: the necessary, customary. and reasonable expenses an insurer will cover.
Alternative treatment plan: provision in managed-care arrangements for treatment outside of a hospital.
Average length of stay: measure used by hospitals to determine the average number of days patients spend in their facilities. A managed-care firm often will assign a length of stay to patients when they enter a hospital and will monitor them to help make sure they don't exceed it.
Case management: a managed-care technique in which a patient with a serious medical condition is assigned an individual who arranges for cost-effective treatment.
Coinsurance or co-payment: the amount a health insurance policy requires the insured to pay for medical and hospital service, after payment of a deductible.
Deductible: the amount of a covered expense that must be paid by the insured before the insurance company begins to pay benefits.
Exclusions: medical conditions or treatments—specified in a policy—for which the insurer will not provide benefits.
Exclusive provider organization (EPO): a health care payment and delivery arrangement in which members must obtain all their care from doctors and hospitals within an established network.
Gatekeeper: term given to a primary-care physician in a managed-care network who controls patient access to medical specialists.
Hospital pre-authorization: a stipulation that the insured obtains permission from a managed-care organization before entering the hospital for non-emergency care.
Managed care: a term that applies to the integration of health care delivery and financing.
Major medical policy: a type of health insurance policy that provides benefits for most medical expenses, usually subject to deductibles, co-insurance, and a high maximum benefit.
Mandated benefits: certain coverage, such as prenatal care and care for newborns, that states require insurers to include in health insurance.
Pre-existing condition: a physical or mental condition that an insured person has developed before the effective date of coverage. Policies may exclude coverage for such conditions for a specified period of time.
Preferred provider organization (PPO): a health care payment and delivery system with networks of doctors and hospitals. Members aren't always required to choose a primary-care physician and can go outside the network for care, but they will receive lower reimbursement if they do.
Usual, customary, and reasonable (UCR): amounts charged by health care providers that are consistent with charges from similar providers for the same or almost the same services in a given area.
Waiver: a provision in a health insurance policy in which certain specific medical conditions a person already has are excluded from coverage.
For more information, contact your health insurance policy representative or employee-benefits representative.