Deciding which health plan to pick for yourself and your family can be daunting. All the health care jargon in insurance company brochures doesn't make the task any easier.
Here is a glossary that, hopefully, will help. The glossary comes, in large part, from a consumer booklet, "Understanding Managed Care," published by the Henry J. Kaiser Family Foundation, a Menlo Park-based nonprofit health policy organization that is not affiliated with the Kaiser Permanente HMO.
Copies of the booklet are available by calling the foundation's publication request line at (800) 656-4533. Ask for publication No. 1331.
Accreditation: A process under which health plans are reviewed and judged for quality by an outside organization, such as the National Committee for Quality Assurance.
Capitation: A method of payment for health care services in which providers are paid a fixed monthly rate for each plan member they have as a patient regardless of the amount of care the member receives.
Co-Payment: A fixed amount you pay when you receive covered services under your health plan. Members typically pay co-payments ranging from $5 to $15 every time they visit the doctor, have tests done or get prescriptions filled.
Deductible: The fixed amount you must pay for yourself for health care services before your insurance plan will begin to pay for the cost of your care. This feature is more common with traditional insurance.
Disenrollment: The procedure you must follow to cancel your membership in your plan.
Exclusions: Health services that are not covered by your health plan or specific circumstances under which your plan will not pay for services. Typical exclusions are cosmetic surgery and emergency room services that your insurer deems nonemergency.
Experimental Procedures or Services: Services that are not recognized under generally accepted medical standards as safe and effective for treating a particular condition. In some instances, health insurers may differ on their determination of what is "experimental" and what is not.
Fee-for-Service: The traditional method of paying for medical services, where doctors and hospitals are paid for each service they provide.
Formulary: A list of approved drugs under a health plan's prescription drug benefits.
HMO (health maintenance organization): Health plans that provide comprehensive health-care services to members for a fixed fee. Members are generally limited to using doctors and hospitals designated by the HMO.
Medical group: A professional organization of physicians that contracts with a health plan to deliver both primary--or basic--and specialty care to plan members.
Medically Necessary: A term used by insurance companies and health plans to describe care that is appropriate and provided according to general standards of medical practice.
Network: The doctors, clinics, hospitals and other medical providers that a health plan contracts with to provide health care to its members.
Point-of-Service: An option provided by some HMOs that allows members to go outside the plan's physician and hospital network for care, but requires that they pay higher cost sharing than they would for network providers.
Preexisting Condition: A medical condition that was diagnosed or treated before your enrollment in a health plan or insurance policy.
Preferred Provider Organization (PPO): A mixed health-plan model that combines managed care and traditional insurance. If you use the plan's network doctors, you pay low cost-sharing amounts as you would in an HMO. But if you are willing to pay higher out-of-pocket costs, such as deductibles, you can use any doctor you wish, as with traditional insurance.
Referral: Authorization for a member of a managed care plan to receive care from a specialist or hospital. The member's primary care physician generally must provide the referral.
Specialist: A physician with training or expertise in an area of medicine. HMO members usually need approval from their primary care physician to see a specialist.
Utilization Review: A process used by health plans and medical groups to reduce what they deem to be unnecessary and ineffective care and to hold down medical costs. It's also used to prevent unnecessary hospital admissions and reduce lengths of hospital stays.