Health Insurance Terms.
Insurance Terms, Demystified
We know health insurance and Medicare jargon can feel like another language. Our A - Z glossary breaks it all down into plain English, so you can feel confident and in control.
A
ACA (Affordable Care Act) - Federal law that created Marketplace insurance and expanded access to health coverage.
Additional Coverage - Benefits Medicare doesn’t cover, like dental, vision, or hearing.
Agent - A licensed professional (like Part ABC) who helps you choose and enroll in coverage.
Annual Enrollment Period (AEP) - Medicare’s yearly window (Oct 15–Dec 7) to enroll or change plans.
B
Balance Billing - When a provider bills you for the difference between what they charge and what Medicare approves (illegal with Medicare-participating providers).
Beneficiary - The person receiving Medicare or health insurance benefits.
Benefit Period - How Medicare measures hospital and skilled nursing services, not the same as a calendar year.
C
Carrier - The insurance company that administers your policy.
Claim - A request for payment submitted to an insurance company after you get care.
Coinsurance - The percentage you pay for covered services after your deductible.
Copay - A fixed amount (like $20) you pay for a service at the time of care.
Creditable Coverage - Insurance that’s considered “good enough” by Medicare (important for avoiding penalties).
D
Deductible - The out-of-pocket amount you must pay before your plan starts covering costs.
Drug Formulary - The official list of prescription drugs covered by a Part D or Advantage plan.
Dual Eligible - Someone who qualifies for both Medicare and Medicaid.
E
Eligibility - Requirements you must meet to qualify for coverage (like turning 65 for Medicare).
Enrollment Period - A specific window of time to enroll, switch, or drop coverage.
Exclusions - Services or items your insurance does not cover.
F
Final Expense Insurance - A small life insurance policy meant to cover funeral, burial, and related costs.
Formulary Tiers - Levels of prescription drugs with different copay/coinsurance amounts.
FMO (Field Marketing Organization) - A company agents contract through for carrier access and support.
G
Generic Drug - A medication with the same active ingredients as a brand name drug, usually at a lower cost.
Guaranteed Issue - A rule that requires insurance companies to sell you a policy regardless of health conditions (important for Medigap).
Group Health Insurance - Coverage offered by an employer or organization to its employees or members.
H
Health Maintenance Organization (HMO) - A type of Medicare Advantage or ACA plan that limits you to a network of providers, usually requiring referrals.
High Deductible Health Plan (HDHP) - A plan with lower monthly premiums but higher out-of-pocket costs before coverage kicks in.
Hospital Insurance (Part A) - Medicare coverage for inpatient hospital stays, skilled nursing care, hospice, and some home health care.
I
ICHRA (Individual Coverage HRA) - An employer benefit that reimburses employees tax free for individual health insurance premiums.
Income Related Monthly Adjustment Amount (IRMAA) - An extra charge added to Medicare Part B and Part D premiums for higher-income beneficiaries.
In Network - Providers or facilities that contract with your insurance plan to offer lower rates.
J
Job-Based Insurance - Health coverage offered through your or a spouse’s employer.
Joint Commission - An organization that accredits hospitals and health care facilities, ensuring quality standards are met.
K
Kidney Disease (ESRD) - End-Stage Renal Disease; people with permanent kidney failure may qualify for Medicare before age 65.
Key Person Insurance - A life insurance policy that helps protect a business financially if an important employee passes away.
L
Lifetime Reserve Days - Extra hospital days Medicare Part A covers after you’ve used your standard benefit period (you have 60 for your lifetime).
Long-Term Care Insurance - Coverage that helps pay for services like nursing homes, assisted living, or home health when you can’t do everyday activities.
Loss Ratio - The percentage of premiums an insurer spends on claims versus admin/profit.
M
Medicaid - A state and federal program providing health coverage for people with limited income/resources.
Medicare - Federal health insurance for people 65+ or with certain disabilities.
Medicare Advantage (Part C) - Private plans that bundle Parts A, B, and usually D into one.
Medicare Supplement (Medigap) - Plans that help cover out-of-pocket costs not paid by Original Medicare.
MOOP (Maximum Out-of-Pocket) - The most you’ll pay for covered services in a year under a Medicare Advantage or ACA plan.
N
Network - The doctors, hospitals, and providers contracted with your insurance plan.
Non-Preferred Drug - A brand-name drug that costs more because it isn’t on your plan’s preferred formulary tier.
Notice of Creditable Coverage - A document showing your drug coverage is as good as or better than Medicare’s standard.
O
Open Enrollment Period (OEP) - The window when you can enroll in or change coverage. For Medicare Advantage, Jan 1–Mar 31; for ACA, Nov 1–Jan 15 in most states.
Out-of-Network - Providers not contracted with your plan, usually at higher cost.
Out-of-Pocket Costs - The expenses you pay directly (deductibles, copays, coinsurance) that aren’t covered by insurance.
P
Part A - Hospital insurance under Medicare.
Part B - Medical insurance under Medicare (doctor visits, outpatient care).
Part C (Medicare Advantage) - Private Medicare plans that combine A and B, often D.
Part D - Prescription drug coverage through Medicare approved private plans.
Premium - The monthly amount you pay to keep your coverage active.
Preventive Services - Screenings, vaccines, and checkups covered at no cost to you.
Provider - A doctor, hospital, or health professional who delivers care.
Q
Qualifying Life Event (QLE) - A change (marriage, job loss, moving) that lets you enroll outside normal enrollment periods.
Qualified Health Plan (QHP) - ACA marketplace plans that meet government standards.
QMB (Qualified Medicare Beneficiary) - A program that helps pay Medicare premiums and cost-sharing for low income beneficiaries.
R
Referral - A written order from your primary doctor to see a specialist in HMO plans.
Reinsurance - Insurance that insurers buy to protect themselves from very large claims.
Rider - An add on benefit you can purchase to customize an insurance policy.
S
SEP (Special Enrollment Period) - A time outside open enrollment when you can make plan changes due to certain events.
Skilled Nursing Facility (SNF) - A rehab facility that provides medical and nursing services after a hospital stay.
Supplemental Benefits - Extra services Medicare Advantage plans may offer (vision, hearing, dental, gym memberships).
Summary of Benefits - A document showing what a plan covers and costs.
T
Telehealth - Getting care from a doctor remotely by phone or video.
Tiered Network - A system where providers are ranked by cost/quality, affecting what you pay.
Trustee - Person or entity managing funds for someone else’s benefit (important for life insurance and estate planning).
U
Underwriting - The process insurers use to decide eligibility and pricing for a policy.
Urgent Care - Non emergency care for immediate issues (like stitches or infections).
Usual, Customary, and Reasonable (UCR) - The typical fee charged for a service in your area, used by insurers to set payment limits.
W
Waiting Period - The time before your coverage or benefits take effect.
Wellness Visit - A yearly check in with your doctor to review your health and prevent problems.
Whole Life Insurance - A permanent life insurance policy that lasts your lifetime and builds cash value.
X
X-Ray Services - Covered by most insurance, in Medicare, usually Part B if medically necessary.