Glossary
Application
This document is a signed statement of facts that an insurer uses to determine whether to issue coverage. The application includes your name, age, address, and may include questions about your medical history. It becomes part of your health insurance contract.Assignment
An assignment is a document signed by a policyholder authorizing a company to pay benefits directly to a hospital, doctor or other health care provider.Coinsurance
This is the cost that a policyholder must pay out-of-pocket. Coinsurance usually involves a percentage of what a procedure costs. Many policies require the buyer to pay 20 percent up to a certain dollar amount.Conversion Policy
A conversion policy is an individual policy or certificate issued when a person no longer qualifies as a certificate holder under group coverage or as a dependent under a group certificate or individual policy.Copayment
This is a specified dollar amount a subscriber must pay for covered health care services. The subscriber pays this amount to the provider at the time of service.Cost Shifting
This practice, used by hospitals, increases the cost of hospital services to offset the cost of caring for nonpaying or indigent patients.Customary Charge
This is the range of usual fees charged by doctors of the same specialty in a given geographic area for a specific procedure.
Deductible
This is the amount you must pay out-of-pocket before an insurance company pays its share. Usually, the higher the deductible, the lower the premium.Effective Date
This is the date on which health insurance protection begins.Elimination Period
This is the length of time a policyholder has to wait after a covered illness begins before receiving benefits.Exclusions
These are certain conditions (or life events) specified in a health policy for which there is no coverage.Free Look Period
This is a 10-day period after you receive a health policy which allows you time to decide whether to keep it. This applies only to individual health policies.Grace Period
This is a specified period in which a policyholder may submit an overdue payment and still retain coverage.Guaranteed-Issue Policy
This type of policy is one that an insurance company must issue to you under certain circumstances, regardless of any health conditions you suffer from.Insolvency
This is the inability of a company to meet financial obligations or debts.Levels of Nursing Care
There are various degrees of nursing care. The three levels often referred to in Medicare, Medicare supplement and other insurance policies include the following:Skilled Nursing Care –This level of care provides daily (around-the-clock) nursing and rehabilitative care performed by or under the supervision of a registered nurse or a doctor.
Intermediate Care –This level of care provides less than 24-hour daily nursing and rehabilitative care performed by or under the supervision of skilled medical personnel. Care must be supervised by a registered nurse or a doctor.
Custodial Care –This lower level of care does not require a nurse to administer it. It may be provided in a nursing home or a private home, but must be recommended by a doctor. This care includes help with activities of daily living. A Medicare supplement policy provides limited nursing care coverage, as it supplements Medicare payments for skilled nursing care, but not intermediate or custodial care.
Medical-Cost Inflation
This is an increase in insurance premium due to a rise in the cost of medical care. It measures the additional cost of medical services from one year to the next. It does not consider the number of times doctors perform the procedure in a year.Medical Utilization
This is the frequency of a policyholder’s use of medical services in a given year resulting in an insurance claim. This term also refers to the number of times doctors perform a procedure in a year.Medically Necessary
This is a medical procedure or treatment necessary to maintain or resume good health. Many insurance policies will only pay for medically necessary treatments.
Pre-Existing Condition
This is an illness, diagnosed or treated before buying a health insurance policy, that existed during the six-month period immediately preceding the policy’s effective date. A policy usually will not cover a pre-existing condition until some time after the policyholder purchases the coverage.Reasonable Charge
This is a fee that differs from usual or customary charges because of unusual circumstances involving medical complications that require additional time, skill and expertise.Rider
This is an attachment to an insurance policy that specifies conditions or benefits the policy covers in addition to the original contract benefits.Small Business
This is a business that has one to 50 employees.Stop-Loss Limit
This is a provision that limits the amount of coinsurance a policyholder must pay.Surgical Schedule
This is a list of cash allowances payable for various kinds of surgery. The severity of an operation determines the maximum amount payable.Usual Charge
This is the fee a doctor most frequently charges patients for a procedure.Waiting Period
This is the time between the date a policy becomes effective and the date benefit payments begin
