Introduction
Health insurance is full of complex terms that can be confusing, especially for first-time buyers or those trying to compare plans. Understanding these key terms can empower you to make informed decisions, save money, and choose the right coverage for your needs.
This comprehensive glossary covers the most important health insurance terms—from A to Z—to help you navigate your health insurance journey with confidence.
Need more personalized advice? Contact the Emmie Mae Team, licensed health insurance advisors, to simplify the process and find the right plan for you.
A Comprehensive Glossary of Health Insurance Terms (A-Z)
A
Affordable Care Act (ACA)
Federal legislation designed to increase access to affordable health insurance, offering subsidies for lower-income individuals and setting coverage requirements.
Annual Limit
The maximum amount your health plan will pay for covered services in a year. ACA-compliant plans no longer have annual limits on essential health benefits.
B
Balance Billing
When a provider bills you for the difference between their charge and what your insurance pays. This typically occurs when using out-of-network providers.
Beneficiary
The person eligible to receive health benefits under your insurance policy, such as a spouse or child.
C
Copayment (Copay)
A fixed amount you pay for a covered service, such as $30 for a doctor visit, due at the time of the service.
Coinsurance
The percentage of costs you pay for covered services after meeting your deductible. For example, if your coinsurance is 20% and your bill is $1,000, you pay $200.
Coverage Year
The 12-month period during which your health plan is active, often aligning with the calendar year.
D
Deductible
The amount you must pay out-of-pocket for covered services before your insurance plan starts to pay.
Dependent
A family member (such as a child or spouse) covered under your health insurance plan.
E
Essential Health Benefits (EHBs)
A set of 10 healthcare services, such as maternity care, preventive care, and mental health services, that all ACA-compliant plans must cover.
Explanation of Benefits (EOB)
A document from your insurer detailing what services were covered, how much was paid, and any balance you owe.
F
Flexible Spending Account (FSA)
A pre-tax account used to pay for eligible medical expenses, such as co-pays or prescriptions. Unused funds typically do not roll over into the next year.
Formulary
A list of prescription drugs covered by your health insurance plan, often organized into cost tiers.
H
Health Maintenance Organization (HMO)
A plan that requires members to use in-network providers and get referrals from a primary care doctor to see specialists. HMOs generally have lower premiums but less flexibility.
Health Savings Account (HSA)
A tax-advantaged savings account available with high-deductible health plans (HDHPs) to pay for medical expenses. Funds roll over year to year.
I
In-Network Provider
A healthcare provider contracted with your insurance company to offer services at discounted rates.
Individual Health Plan
Health care coverage purchased for one person, without dependents, also known as individual coverage.
Inpatient Services
Services provided when you’re registered as a patient in a hospital or healthcare facility.
L
Lifetime Limit
The maximum amount an insurance plan will pay for covered services over your lifetime. ACA-compliant plans no longer impose lifetime limits.
M
Medicaid
A federal and state program offering free or low-cost health insurance for eligible low-income individuals and families.
Medicare
A federal health insurance program for people aged 65 or older and some younger individuals with disabilities.
N
Network
The group of doctors, hospitals, and other healthcare providers that your insurance company has contracted with to provide services at reduced costs.
O
Out-of-Pocket Maximum
The most you’ll pay for covered services in a plan year. Once you reach this limit, your insurance pays 100% of eligible expenses.
Open Enrollment Period
The designated time of year when individuals can sign up for, renew, or change their health insurance plans.
P
Premium
The monthly payment you make to maintain your health insurance coverage.
Preferred Provider Organization (PPO)
A type of health plan offering a wider network of providers, allowing you to see any doctor or specialist without needing a referral. PPOs also cover out-of-network services, though at a higher cost.
T
Telehealth
Remote healthcare services provided via phone or video call, often covered by most insurance plans.
Tiered Network
A health plan structure grouping providers into tiers based on cost and quality. Lower-tier providers typically cost less.
Why Understanding These Terms is Essential
“Knowing these terms isn’t just about being informed—it’s about empowering yourself to make smarter, more cost-effective health insurance decisions,” says Jacolby “Jay” Gilliam, a licensed health insurance advisor.
How to Use This Glossary
- Bookmark this page for future reference.
- Share it with friends or family who need help understanding health insurance.
- Contact Jay and the Emmie Mae Team for personalized guidance and support.
Get Expert Help with Your Health Insurance
Understanding health insurance terms is a great first step, but having an expert by your side makes it even easier. At Emmie Mae Health Advisors, we specialize in simplifying the process and finding plans tailored to your needs.
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Email: [email protected]
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Note: This health insurance terms glossary is for informational purposes only and may not encompass all health insurance terms. For specific plan details, consult your policy documents or contact your insurance provider.