Feel like you need a dictionary to understand some of the vernacular used in the insurance industry? You shouldn’t have to. After all, insurance is our job – not yours! To help you make more informed decisions, a glossary of common insurance terminology follows:

“Cost vs. benefit” - Meant to prompt the following consumer questions:

• How much will my monthly premiums be?
• If I choose a lower premium plan, can I afford the maximum out of pocket expense in case of emergency?
• How often will I use the plan?
• How is my family's health, really? (Individual/family health insurance can be declined orrated up.
• Can /should I put my dependents on a different plan, for the sake of receiving better benefits

“Access to care”
Deals with the contrast between HMO's and PPO/POS. Typically, an HMO will provide a greater benefit (in other words, less out-of-pocket cost for the member). However, some HMO’s may enforce unwanted restrictions on doctor choices.

Likewise, PPO's offer more freedom in a member’s physician selection; however, the possibility of 100% coverage is remote (if not nonexistent) in a PPO plan. The PPO is more expensive, but may be more appropriate for certain individuals and families.

“Co-insurance”
Refers to the amount you must pay for medical care in a point-of service plan (POS) or preferred provider organization (PPO) after you have reached your deductible. It is often a percentage of bills charged.

“Co-payment”
A charge you pay for a medical visit upon the point of service. Your health care plan covers the remaining medical charges.

“Deductible”
The amount of money you must pay each year for coverage to your medical care expenses, before your insurance policy pays its portion.

“Exclusions”
Specific conditions or circumstances in which the policy will not offer benefits.

“Fee-for-Service”
A payment agreement in which the provider is paid for each service, rather than a pre-negotiated amount for the patient.

“HMO (Health Maintenance Organization)”
Prepaid health plans for which a premium is due each month. The HMO covers your cost of care to see a doctor within their working network at pre-negotiated rates. HMO members are required to choose their primary care physician from the HMO’s approved member physicians. 

“IPA (Independent Practice Association)”
An independent group of physicians who unite with an HMO to offer services to members.

“Lifetime Maximum”
The maximum percentage of benefits available to a member during their lifetime, wherein all benefits served are subject to this limit unless stated as unlimited.

“MSA (Medical Savings Account)”
A tax-advantaged personal savings account used along with a high deductible health policy. You may deposit money into this account on a pre-tax basis to set aside money for medical care and expenses that qualify, including annual deductibles and co-payments.

“Out-Of-Pocket Maximum”
The highest amount of money you will pay in a year for deductibles and coinsurance plus regular premiums.

“Pre-existing Condition”
A health problem that existed or was treated before your insurance became in effect. Most health insurances have a pre-existing condition plan that describes under what conditions they will cover medical expenses that relate to a pre-existing condition.

“PPO (Preferred Provider Organization)”
A network of health care providers that offers medical services to health plan members at a discounted cost. See “access to care” for additional PPO details.

“Premium”
The amount you must pay in exchange for health insurance coverage.

“Provider”
Any healthcare provider, including a doctor, nurse, or institution, who administers care to an insured member. 

“Well Baby”
Health services, including immunizations, provided by the member's participating medical group. Each carrier will specify the age at which well baby services are no longer required.