Learn Common Terms

Actual charge

The amount a doctor or other health care provider bills a patient. This may differ from the allowable charge, which is what the health plan agrees to pay for a covered service.

Allowable charge

The most your health plan will pay for a covered service. This may differ from the actual charge you see on the bill from your doctor.

Approval

The process of deciding whether or not a health plan will cover a specific service. Certain procedures require pre-approval or prior authorization. This means the health plan must approve the service before you receive it, in order for your claim to be paid.

Approved amount

The amount your health plan says is reasonable for a covered service. This amount may be less than the actual amount your doctor charges.

Assignment

An arrangement in which the health plan pays the health care provider directly. With Medicare, providers who accept assignment are agreeing to accept the Medicare-approved amount as full payment for covered services.

Automatic claims filing option

A claims filing option for our Medicare Supplement plans. This option allows us to receive your claims automatically, so we can process them faster.

Beneficiary

A person who receives insurance benefits.

Benefit

Services and supplies a health plan pays for. The term also refers to the amount a health plan will pay.

Benefit period

The period of time a health play will help pay for covered services. Benefit periods are usually one year. The benefit year may not be the same as the calendar year. With Medicare, “benefit period” also refers to your use of inpatient services. The benefit period begins the day you are admitted to a hospital or skilled nursing facility. It ends when you’ve been out for 60 days. You must pay the inpatient hospital deductible for each benefit period. There’s no limit to the number of benefit periods.

A

Cafeteria plan

A health plan in which employees can choose from two or more benefit options. This is also called a flexible benefits plan.

Carrier

A company that signs a contract with the federal government to handle Medicare claims from health care providers. BlueCross BlueShield of South Carolina is a Medicare carrier.

Case management

A service offered by your health plan and/or insurance company. With case management, you have a special nurse assigned to assist with the organization of your care. This nurse works with your doctor, your family and you. The goal is to help you get the most out of your health plan benefits.

Catastrophic coverage

A type of health insurance that covers severe or prolonged illness or injury. These plans help pay for care in situations that are life-threatening or could result in serious disability. They have high deductibles. But the plans cost less than other types of coverage.

Centers for Medicare & Medicaid Services (CMS)

The government agency in charge of the Medicare program. Centers for Medicare and Medicaid Services. This is the agency that administers the Medicare program.

Coinsurance

The amount you pay for covered services. For example, if you have an "80/20 plan," your health plan pays 80 percent of the bill and you pay 20 percent. The 20 percent you pay is your coinsurance.

Comprehensive coverage

A type of health insurance that covers a full range of personal health services. Benefits may include diagnosis, treatment, follow-up care and rehabilitation. These plans usually include deductibles and coinsurance.

Copay/copayment

A set fee you pay for each doctor's office visit, medical service or prescription. For example, your health plan may have a $10 copayment for doctor's office visits. This means every time you visit your doctor, you pay just $10.

Cost sharing

A method of dividing the cost of health care among customers, insurance companies, employers and providers. For example, your employer may pay part of the premiums for your insurance. Your health plan will pay part of your health care bills, and you will pay part. If your doctor is part of your health plan's network, then he or she will cover part of the cost by negotiating a discount for his or her services. Everyone shares in the cost to keep costs down.

Covered service

Specific service your health plan will help pay for.

D

Deductible

The amount of money you must pay before your health plan will begin to pay its share. For example, say your health plan has a $250 deductible. You must pay $250 toward covered health care services before your health plan begins paying.

Disease management

Voluntary programs that help patients live well with chronic conditions. These programs provide information and support. They aim to help you understand your doctor’s instructions and improve the way you care for yourself every day.

B

E

Emergency medical condition

A severe illness or injury (including pain) that requires medical care right away. Without it, you may face serious risks to health or bodily functions. This includes damage to any organs or body parts. If you’re pregnant, it includes the health of the unborn child.

Exclusion

A services or item your health plan doesn't cover.

F

Fee for service

This is a "traditional" approach to health care. You pay doctors and hospitals for each service you receive. Your health plan helps pay a portion of the cost.

Flexible benefits plan

A health plan in which employees may choose from two or more benefit options. This is also called a cafeteria plan.

Fraud

A deception that could result in your health plan paying for something it shouldn't. For example, if your doctor files a claim for a service you didn't receive, this is fraud.

H

Health savings account (HSA)

A type of account that allows you to set aside tax-free money to use to pay for certain medical expenses. An HSA pairs with a high deductible health plan. You and your employer can put money into it.

High deductible health plan (HDHP)

A type of health plan that has a higher deductible than traditional insurance plans. That means you pay more out of pocket toward your health care before the health plan begins to pay its share. These plans generally cost less than traditional plans.

Health maintenance organization (HMO)

A type of health plan that requires you to choose a primary care physician (PCP). Your PCP oversees your care and makes recommendations based on your personal health history. You need a referral from your PCP to see a specialist.

Home health agency (HHA)

An organization that offers skilled nursing care and other services to patients in their homes. These include occupational, physical and speech therapies; medical social services; and home health aide services.

Hospice

A type of care that provides palliative support to patients in the late stages of a terminal illness. Hospice care focuses on comfort and quality of life. Staff members help relieve pain, manage symptoms and offer counseling to patients and their families.

I

Immunosuppressive drugs

Medicine that people who have received organ transplants or have certain health conditions may take.

Inpatient

Care received while staying in a hospital or other care facility. For example, if you need to have surgery, you may stay there for several days. This is inpatient care.

L

Lifetime reserve days

This is a Medicare term for the 91st to 150th day of a hospital stay. If you have Medicare coverage, you only have 60 lifetime reserve days. You can use them at any time, but you can't renew them.

M

Managed care

An evolving approach to health care. Managed care aims to improve cost, utilization and quality of health care services. It involves arrangements between health plans and providers; established fees for health care services; incentives for members to participate within the plan; and monitoring the use of health care services.

Medicare Summary Notice (MSN)

A notice from Medicare explaining if it approved a service and how much it paid. MSNs have replaced EOMBs (Explanation of Medicare Benefits).

Medicare Supplement plan

A health plan that supplements Original Medicare. These plans are sometimes called Medigap plans. They help pay for costs not covered by Original Medicare. This includes copays and coinsurance.

Monthly bank draft billing

The option to pay your health plan premiums with automatic transfers from your bank account. With this option, you never risk lapse in coverage. And Medicare supplement plan members save 6 percent on premiums. If you choose Monthly Bank Draft, please note if the effective date is the 1st, the draft will be on or after the 3rd of each month. If the effective date is the 15^th, the draft will be on or after the 15^th of each month.

Monthly direct billing

The option to be billed monthly for your plan. You may choose to pay premiums monthly or every three months. Monthly premium payments are due at the beginning of the month for which you are paying. You may always renew your policy at the premium rate in effect at the time of renewal. Your insurance won’t lapse as long as you pay your premiums on time.

O

Open access plan

A health plan that lets you visit any doctor in the plan's network. You don’t need a referral from your primary care physician (PCP).

Out-of-pocket maximum

The most you’ll pay out of pocket for covered services during the benefit period. What's included in the out-of-pocket maximum may vary by plan.

Outpatient

Care you receive in a hospital without having to stay there. For instance, you may have a procedure during the day at a hospital, but you get to go home right after it. There may be some cases when you spend the night in a hospital, but care is still considered outpatient. It's always best to ask your doctor if you're getting outpatient or inpatient care. Your health plan may pay differently for each.

P

Pre-existing condition

An injury or illness you had before you had your health plan. Some health plans don’t cover services for pre-existing conditions. Or there may be a waiting period before you can get benefits for them.

Primary care physician (PCP)

A doctor who treats common illnesses and injuries. Some plans require you to choose a PCP to oversee your care. Each family member can have a different PCP. Your PCP must give you a referral to see a specialist.

Q

Quarterly direct billing

The option to be billed every three months for your plan. You may choose to pay premiums monthly or every three months. Quarterly premium payments are due at the beginning of the period for which you are paying. You may always renew your policy at the premium rate in effect at the time of renewal. Your insurance won’t lapse as long as you pay your premiums on time.

R

Referral

Consent from your primary care physician (PCP) to see a specialist. You may also need a referral to have certain types of treatment, such as X-rays or surgery. Not all health plans require referrals.

S

Specialist

A doctor who has a specific area of focus. For example, a surgeon is a specialist. A doctor who treats allergies or heart problems is also a specialist. Some health plans may require you to get a referral from your primary care physician to see a specialist.

Deductible, copay, coinsurance — health insurance can seem like it has a language all its own. Cut through the jargon by learning the meanings of some common health insurance terms.

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