Glossary

The following is an Insurance Glossary of Terms. We have made an effort to compile those terms we believe are of a great help for the understanding of the complicated Health Insurance Industry Terminology.

Beneficiary: The person, persons or entity designated to receive the death benefits from a life insurance policy or annuity contract.

Cancellation: Termination of an insurance policy by the company or insured before the renewal date.

Capitation: A method of paying medical services on the basis of the number of patients who are covered for specific services over a specified period of time rather than the cost of the number of services that are actually provided.

Claim: An itemized statement of medical services and their cost provided by a hospital, physician's office or other facility. Claims are submitted to the insurer or manage care plan by either the patient or the medical provider for payment of the cost incurred

Coinsurance: A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.

Copayment: An specified dollar amount that a member must pay out- of- pocket for specified service at the time of service is rendered.

Deductible: A flat amount a group member must pay before the insurer will make any benefit payments.

EPO (Exclusive Provider Organization): A healthcare benefit arrangement that is similar to a preferred provider organization in administration, structure, and operation, but which does not cover out-of-network care.

Fee Schedule: The fee determined by an Manage Care Organization to be acceptable for a procedure or service, which the physician agrees to accept as payment in full

Policy: The contract issued by the insurance company to the insured.

Policy Period: The period a policy is in force, from the beginning or effective date to the expiration date.

Preferred Provider Organization (PPO)Hospital, physician, or other provider of health care which an insurer recommends to an insured. A PPO allows insurance companies to negotiate directly with hospitals and physicians for health services at a lower price than would be normally charged.

Premium:The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

Usual and Customary - these charges may be based on: rates usually charged by physicians and providers in your area; rate averages compiled by independent rating services; or rate averages compiled by the insurance company.