Insurance terms to know

A glossary of the most commonly used insurance terms.
We know health care terminology is often confusing. To help you better understand, we have created a glossary of common terms and examples of how they are used. Please see below or download a copy here.
  • Coinsurance
    Coinsurance is the amount you pay after you reach your deductible. Your health insurance plan will pay a portion of the medical bill and you will be responsible for paying the rest.
  • Copay or copayment

    A copay is a flat fee that you pay when you visit a provider. It is a set amount of money you pay for a covered service.

  • Covered services

    Healthcare services that are covered by a specific benefit provision of the health insurance plan, are not excluded under the plan. They are determined to be medically necessary per the plan’s medical policies and paid for by the plan.

  • Deductible

    A deductible is the amount you pay for healthcare services before your health insurance begins to pay.

  • Evidence of Coverage (EOC)
    Evidence of Coverage is a document that provides details about what your health insurance plan covers, how much you will pay, and additional plan details.
  • Exclusive Provider Organization (EPO)
    Often referred to as a narrow network. It is similar to an HMO (Health Maintenance Organization) in that it has a specific list or an exclusive network of providers and doesn’t cover most out-of-network care. But an EPO allows the patient to visit any provider in their network without a referral from their PCP (Primary Care Provider). 
  • Explanation of Benefits (EOB)

    An Explanation of Benefits is a statement that describes the costs of medical care received. It explains what portion of a claim (a request for payment submitted by your healthcare provider for covered items or services) was paid to the healthcare provider and what you will be responsible for paying. 

  • Member
    A member is a covered person enrolled under the health insurance plan.
  • Network doctor or provider
    A network doctor or provider is a healthcare doctor (physician, nurse practitioner, clinical nurse specialist or physician assistant) that is contracted with your health insurance plan to provide a better rate.
  • Open Enrollment Period (OEP)
    An open enrollment period is a specific time each year you can sign up for health insurance or change your coverage or plan. The federal exchange is open November 1 - December 15 each year and is often extended through January 15.
  • Out-of-pocket maximum
    An out-of-pocket maximum is the most amount of money you will have to pay during the plan year. Once this out-of-pocket maximum is met, the health insurance plan will cover all costs at 100%.

    How to calculate out-of-pocket medical expenses

    Out-of-pocket medical expenses can be calculated by adding all deductibles to the coinsurance dollar amount.

    What costs can go towards meeting the out-of-pocket maximum?

    Regardless of your health coverage, there are still some out-of-pocket costs. While not all costs will go towards your out-of-pocket limit, most cost-sharing does. Cost-sharing refers to the expenses you pay for covered medical prescriptions and services.

  • Plan
    A health insurance plan refers to Ascension Personalized Care.
  • Premium
    A premium is the amount you pay monthly to have health insurance coverage.

    Who pays the health insurance premium?

    If an employee receives healthcare coverage through their job, the employer will pay a full or partial monthly premium. Most companies will require employees to pay a certain percentage of the monthly premiums to be deducted from an employee's paycheck. The employer will then cover the rest of the payments.

    If you are unemployed or self-employed and buy individual health insurance, you are fully responsible for the monthly premium payments. However, the ACA-compliant health plans provide premium tax credits or subsidies to enable people to buy individual coverage through the Marketplace. To qualify for tax credits, your income must not exceed 400 percent of the federal poverty level, and are unable to access affordable, basic coverage from your employer or your partner's employer.

    What determines premium rates?

    Many  factors affect the amount you pay in premiums. Even if two people obtain the same  insurance policy, they may not have the same premium amount, depending on the underlying factors. Some of the factors that can impact your premium rates for health insurance are  health conditions and lifestyle. These factors include:

    • Age – Your age is one of the biggest determinants of your premium payments. Younger people often pay lower premium rates because they don't see the doctor regularly and have fewer health issues than older adults.
    • Location – Your location will also impact your premium rates. For such factors as limited access to healthy food or even climate, Americans who reside in the same geographical area may have similar health risks. For that reason, insurers may consider your location when deciding your premium. Similarly, insurance services may only be available in selected areas, making it hard to find lower premium options.
    • Plan category – Insurance plans are grouped into different metal tiers  such as Bronze, Silver, Gold, and Platinum. Each metal level is designed to pay a different percentage of medical costs, with the Platinum level attracting the highest premium while Bronze pays the least.
    • Family size – If you're purchasing health insurance for your spouse or children, you will pay more for any member added to the plan.
    • Tobacco use – Individuals who regularly smoke or use tobacco products are likely to pay higher premiums than non-tobacco users. This is because of their increased risk of diseases caused by excess use of tobacco products.
  • Prior authorization
    A prior authorization is an approval that a member must receive from their health plan before receiving certain treatment, medications or services.
  • Schedule of benefits
    A schedule of benefits is a list of services covered under the health plan and includes information on copays, deductibles and any other fees.
  • Special Enrollment Period (SEP)
    A special enrollment period is a set time when you can enroll in health insurance if you have had a certain life event. This can include losing health coverage, moving, getting married, having a baby or adopting a child.
  • Summary of Benefits and Coverage (SBC)
    A summary of benefits and coverage (SBC) is a document that shows deductible and copay information as well as everything that is covered under the health insurance plan.