Novant Health Thomasville Medical Center offers this glossary to help you understand the terms and phrases used by insurance agents,
insurance companies and your doctor.
Refers to a broad, and constantly changing, array of health plans, which attempt to
manage the cost and quality of care. Ideally, managed care brings about a comprehensive
healthcare system where patients receive the care they need—including preventive
care—when they need it and in the most cost-efficient manner possible. The three
most common managed health insurance plan choices are: Health Maintenance Organization
(HMO), Point-of-Service (POS) and Preferred Provider Organization (PPO). Another
option is what is commonly called traditional, indemnity or fee-for-service insurance.
Health Maintenance Organization (HMO)
HMOs emphasize prevention and offer a select choice of doctors and hospitals. You select
a primary care physician who coordinates all of your medical care including referrals
to a specialist and hospital care, if necessary. You may also have minimal co-payments
for office visits, allergy shots and other services. An HMO option is easier on
your budget since you have minimal out-of-pocket and unexpected expenses—as long
as you receive all medical care through the HMO.
Point-of-Service plan (POS)
These plans are similar to HMOs, except there is an option to seek medical care
from a specialist without getting a referral from your primary care physician. In
this case, you may have reduced benefit coverage, meaning you may have to pay more
out-of-pocket costs to receive specialty care without a referral. If you pick a
specialist or hospital that is on the plan's preferred list, you will usually
have some co-insurance in addition to a co-payment. If you pick a specialist or
hospital that it NOT preferred by the plan (or out-of-network), you will usually
have higher co-insurance in addition to your co-payment. Most POS plans cover preventive
care, as well.
Preferred Provider Organization (PPO)
PPOs have fewer restrictions in accessing providers than with other plans. You can pick
any doctor, hospital or service you want. If the provider is preferred by the
plan (in-network), you pay a lower co-payment and co-insurance, depending on your
plan design. If you choose a doctor or hospital that is "out-of-network," then you
will have higher co-payments and co-insurance. You may also be billed for any amount
charged that the plan does not consider reasonable. In other words, you may opt
to use a PPO provider and receive maximum reimbursement and benefits or seek medical
care from a non-PPO provider and receive reduced reimbursement and benefits.
Traditional or Indemnity Insurance
Traditional insurance may not cover preventive services but you can pick any doctor or hospital because
there is not a network or plan list. With indemnity, you will pay an up-front deductible
before there is any reimbursement by the insurance company. Often, you must
complete the claims paperwork. Usually traditional or indemnity insurance is the
most expensive option for health plan coverage.
The amount paid out-of-pocket by plan members for medical services. The payments
usually constitute a fixed percentage of the total cost of a medical service covered
by the plan. For example, if a plan pays 80 percent of a health bill, the patient pays the
remaining 20 percent as co-insurance.
A flat fee paid out-of-pocket for medical services. For example, a $5 or $10 co-payment
(co-pay) may be required for each office visit, prescription, allergy shot, etc.
The sum of money that an individual must pay out-of-pocket for medical services
before the health plan pays its portion. Deductibles are usually per-person, or
per-family, per-calendar year. For example, an individual may have a $200 deductible,
whereas a family may have a $400 deductible, per year.
A program jointly-funded by the state and federal government to provide medical
aid for people who are unable to finance their medical expenses. North Carolina
is one of many states offering a Medicaid HMO for this population.
The federal health insurance program for older Americans and eligible disabled individuals.
An approach to healthcare that emphasizes preventive measures and health screenings
such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray
tests, Pap smears, mammograms and other early-detection testing. The purpose of
offering coverage for preventive care is to diagnose a problem early, when it is
less costly to treat, rather than late in the stage of a disease when it is much
more expensive or too late to treat.
Primary Care Physician
These specialized physicians provide a full range of healthcare services to individuals
and generally coordinate and manage the care of HMO patients. Family practice
physicians, general internal medicine physicians and pediatricians are recognized
by managed health plans as primary care physicians. Some HMOs also recognize obstetricians / gynecologists
as primary care physicians.