Most Important Health Insurance Terms

You can't make an informed decision on your health insurance plan unless you're familiar with a few key terms. Here are the definitions of the most important health insurance terms.

Additional Insured

Anyone who is covered by your health plan but not named as the "insured" party in your documentation.

Benefit

The amount your insurance company will pay when you file a claim for a covered loss.

Claim

A request for benefits that you submit to your insurer.

COBRA

This stands for the Consolidated Omnibus Budget Reconciliation Act. This law requires employer-subsidized medical plans to offer participants whose group coverage has been canceled the option to continue coverage for up to 18 months. Of course, the health insurance rates for COBRA coverage will be higher than they were with group coverage.

Co-Payment

The amount for which you are financially responsible when you make a claim on your health insurance plan.

Deductible

How much you will have to pay before your health insurance plan will reimburse you. Higher deductibles usually mean you will receive lower health insurance rates.

HMO

Health Maintenance Organization, which is the most popular form of prepaid managed care. You will pay monthly premiums, or health insurance rates, in exchange for the coverage of checkups, preventive care, surgery, hospital stays, etc.

Managed Care

A system that manages healthcare usage and costs. Managed care has three primary forms: HMOs, PPOs, and POS (point of service) plans.

PPO

Preferred Provider Organization, which has slightly higher health insurance rates than HMO coverage but offers more flexibility. This plan offers financial incentives for using in-network healthcare providers, but generally still covers out-of-network care as well.

Travel Health Insurance

This type of policy is designed to provide you with health insurance while you are traveling abroad. If you have any questions, please check out our Frequently Asked Questions page.