Frequently Used Benefits Terms
CO-INSURANCE:
A percentage the patient is responsible for on a given insurance claim. Co-insurance refers to the money that an individual is required to pay for services, after a deductible has been paid and is frequently expressed as a percentage. For example, the employee pays 20% of the charges for a service and the insurance company pays 80%.
CO-PAYMENT OR CO-PAY:
A per-occurrence payment, usually a dollar amount. Co-payment is a pre-determined (flat) fee that an individual pays for healthcare services, in addition to what the insurance covers. For example, some HMOs require a $25 “co-payment” for each office visit, regardless of the type or level of services provided during the visit.
COVERED EXPENSE:
A medical procedure or item that is deemed payable by the insurance plan.
DEDUCTIBLE:
A set dollar amount that an insured person pays before the insurer starts to make payments for covered medical services. Often based on a calendar year.
EXCLUSIONS:
Those items or medical services that are not covered by the health plan.
EXPLANATION OF BENEFITS (EOB):
The insurance company’s written explanation of a claim, showing what they paid and what the insured person must pay.
IN-NETWORK:
Providers or healthcare facilities which are part of a health plan’s network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider because those networks provide services at lower cost to the insurance companies with which they have contracts.
OUT-OF-POCKET EXPENSE:
The amount the patient must pay and not paid for by the insurance plan.
OUT-OF-NETWORK:
This phrase usually refers to physicians, hospitals or other healthcare providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on the individual’s health insurance plan, expenses incurred by services provided by out-of-network healthcare professionals may not be covered, or only covered in part by an individual’s insurance company.
OUT-OF-POCKET MAXIMUM:
A predetermined limited amount of money that an individual must pay themselves, before an insurance company will pay 100% for an individual’s eligible healthcare expenses. The amount is determined and defined when the policy goes into effect. The Out-of-Pocket Maximum and any exclusions (such as co-pays) will also be included in the explanation of benefits for a claim. The Out-of-Pocket Maximum is assessed yearly and provides the policyholder with an estimate of the maximum an individual will pay for services, deductibles or co-pays over the course of the year.
OUTPATIENT:
An individual (patient) who receives healthcare services (such as surgery) on an outpatient basis, meaning no overnight stay in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless performed on an outpatient basis. The term “outpatient” is also used synonymously with ambulatory to describe healthcare facilities where procedures are performed.
PRIMARY CARE PROVIDER (PCP):
A healthcare professional (usually a physician) who is responsible for monitoring an individual’s overall healthcare needs. Typically, a PCP serves as a “gatekeeper” for an individual’s medical care, referring the individual to more specialized physicians for specialist care.
PROVIDER:
Provider is a term used for healthcare professionals who provide health care services. Sometimes the term refers only to physicians. Often, however, the term also refers to other healthcare professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized healthcare services.
