PRE-EXISTING CONDITION
A condition that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care or treatment during the (six) months immediately preceding the effective date of coverage.
- A condition for which medical advice, diagnosis, care or treatment was recommended or received during the six (6) months immediately preceding the effective date of coverage;
- A pregnancy on the effective date of coverage.
An insurance company must credit any qualifying previous coverage to the preexisting condition waiting period, for new enrollees and dependents.
This only applies if there was not more than a 63-day lapse in health coverage prior to the effective date of the new coverage.
AMOUNT CHARGED VS. AMOUNT ALLOWED
A provider can charge you any amount for a service, but a health insurer may establish the maximum they will pay for a given covered service. This amount is often less than the charged amount. Contracting or “in-network” providers agree to accept the allowed amount (called the maximum allowance in your policy) as payment in full for a covered service and as part of their contract agree not to bill you the difference between the allowed amount and charged amount.
IN-NETWORK VS. OUT-OF NETWORK
Depending on your policy, there may be a different benefit level for “in” and “out” of network providers. Health insurers have negotiated with certain providers or facilities for discounted fees. These providers make up the health plan’s “network”. Because these providers agree to charge less for their services, you will also pay less when using an in-network provider. When you use out-of network providers, you may have to pay significantly more for your health care services.
DEDUCTIBLE
The amount of money you must pay out of your pocket for healthcare expenses before insurance starts to cover the cost. Deductible accumulation can be a calendar year amount or policy year amount depending on the insurance contract. Normally the higher the deductible the lower the premium.
COPAYMENT
A co-payment (or copay) is a pre-set fee that you pay for a certain healthcare service, such as $20 copay for a doctor’s office visit.
COINSURANCE
A percentage (for example 20%) of the allowed amount you pay for a healthcare covered service. This percentage amount would occur after you meet you deductible.
OUT-OF POCKET MAXIMUM
A fixed dollar amount (stated in the contact) you pay during the coinsurance portion, and after the deductible, that is the maximum you will pay in a benefit period for eligible expenses. Once this amount is met, the insurance company will pay 100% of the allowed amount for covered services. Out of network medical costs may not apply to the maximum out-of-pocket. Remember this is reset every calendar or policy year depending on the insurance contract.
FORMULARY DRUGS
A list of drugs covered under a health insurer’s prescription plan. Non-formulary drugs may be covered but at a much higher cost to you.
GENERIC DRUGS
Drugs with identical active ingredients as corresponding brand-name drugs. Generally one could expect to pay one-third less for generics.
EXPLANATION OF BENEFITS (EOB)
The written explanation of your claim, showing the amount paid by the insurance company and the amount you owe for the service. This statement should reconcile with the doctor’s bill. Yes, they are nearly impossible to read that is why you have an insurance agent. Don’t throw those EOBs away; file them for safekeeping.
EXCLUSIONS
Medical services not covered by your policy. If you do not read anything else in your policy, read the Exclusions in your health insurance policy.
HIGH RISK REINSURANCE POOL PLANS
The law that created the High Risk Reinsurance Pool Plans (HRP Plans) went into effect on January 1, 2001. The purpose of the HRP Plans is to make health insurance coverage available to Idaho residents not covered by employment-related insurance. Idaho residents may be eligible for the HRP plans regardless of health status or claims experience. Your are eligible if you are:
- Under age 65;
- Not eligible for coverage under a group health plan, Medicaid, or Medicare and do not have other health insurance coverage;
- You apply for any individual health benefit plan from the approved insurance carriers;
- If any one carrier declines your coverage under a preferred health benefit plan due to your health status or claims experience; or
- If a carrier refuses to issue a plan to you providing coverage substantially similar to an HRP plan except a higher premium rate.
Then that carrier must offer to you your choice of one of the five HRP plans.
MEDICARE
Medicare is a health insurance program for:
- People age 65 or older;
- People under age 65 with certain disabilities; and
- People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).
Medicare has four parts, referred to as Parts A, B, C, and D.
MEDICARE PART A (HOSPITAL INSURANCE)
Medicare Part A helps cover your inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). You must meet certain conditions get these benefits. Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. There is a deductible, which resets every 60 days.
MEDICARE PART B (MEDICAL INSURANCE)
Medicare part B helps cover your doctor’s services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
You pay the Medicare Part B premium each month. The premium depends on your income, and in some cases, the amount may be higher if you didn’t sign up for Part B when you first became eligible.
There is a Part B deductible each year. After the deductible is met, Medicare will pay 80% of the Medicare allowable amount for eligible services with no maximum out of pocket limit.
MEDICARE PART C (MEDICARE ADVANTAGE PLANS)
Medicare Advantage (Med-Advantage) plans are available for anyone with Medicare, regardless of income or age. There are many different plans available in all states. These plans are approved by Medicare, but administered by private companies. Med-Advantage plans are not the same as a Medicare Supplement.
When you join a Medicare Advantage Plan, you are still in Medicare and you still have to pay the Part B premium. Medicare Advantage Plans provides all of your Part A (hospital) and Part B (medical) coverage and must cover medically necessary services. They generally offer extra benefits, and many include Part D drug coverage. These plans often have a network, which means you may have to see doctors who belong to the plan or go to certain hospitals to get covered services.
A Med-Advantage plan is a privatization of traditional Medicare. You will still pay Part B premium to Medicare. These plans are relatively new to Medicare. Medicare subsidizes health insurance plans that in turn offer many different plans (HMOs, PPO, and Private Fee for Service), there is no standardization of Med-Advantage Plans.
MEDICARE PART D (PRESCRIPTION DRUG COVERAGE)
Medicare prescription drug plans are available for anyone with Medicare, regardless of income or age. There are many different drug plans available in all states. These drug plans are approved by Medicare, but administered by private companies.
When you join a Medicare prescription drug plan, you are still in Medicare. Prescription drug plans provide assistance with some or all of medication needs, depending on which plan you choose. Plan D was new in 2006 with many of changes every year. Most individuals need to review their plan annually.
MEDICARE SUPPLEMENT (Medigap)
A Medigap policy is health insurance policy sold by private insurance companies. They must follow federal and state laws. A Medicare Supplement is designed to pay deductibles, coinsurance and co-payments. In other words, fill the gaps not covered by Medicare and to limit the out of pocket medical expenses. There are 12 plans that the Federal Government standardizes, referred to as Plans A though L. A Medicare Supplement only covers Medicare approved charges.
Note: These definitions are for summary explanation only. Please refer to your contract for specific definitions related to your benefits.