Glossary of Health Reform Terms

This glossary of health reform terms can help in understanding the discussions about health care reform.

Access: The ability to have medical care when you need it - based on whether you have health care insurance, whether you can pay for the cost of the care, and whether there are enough primary care doctors and specialists available to meet the demand in your town or city.
Adverse selection: In their risk pools, health insurance companies try to keep a balance between people with chronic health conditions - who have a high use of health care services - and those who are healthier. Adverse selection is the result of a larger number of unhealthy people in a risk pool for health care coverage.
Health care benefits: The services available to you as a member of a health plan - including doctor visits, hospitalizations, medications, therapy, and more - that are covered by a health plan. Usually you pay a part of the cost for your health care and your insurer pays a part.
Capitation: When an insurance company pays doctors and hospitals a fixed amount of money for each person enrolled in a managed care organization - usually an HMO plan. This is instead of paying providers based on each doctor visit, test, hospitalization, and other services, or on the costs of the services.
Case management: A health care professional - called a "case manager" - coordinates health care for an individual patient with a specific diagnosis or who has a lot of health care needs.
Children's Health Insurance Program (CHIP): CHIP is a joint program from the federal and state governments that provides health care coverage for low-income children who don't have health insurance and aren't eligible for Medicaid. States administer CHIP in their Medicaid programs or through a separate program.
Disease management: Also called chronic care management, this is the coordination by a health professional of a patient's health care services. The program provides education to encourage patients to pay more attention to their chronic conditions - like asthma or diabetes - so they can stay healthier and save on costs.
COBRA (Consolidated Omnibus Budget Reconciliation Act): Thanks to this legislation, if you lose your job you don't automatically lose your health insurance. You can continue paying for your employer's health care coverage for up to 18 months. Usually you must pay the full premium to continue the insurance through COBRA, but for a brief time - through December 31, 2009 - you can get a temporary subsidy of 65 percent of the premium cost for the purchase of COBRA coverage.
Coinsurance: This is one way the insured member shares in the cost of health care. The member pays a percentage (about 20 or 30 percent) while the health plan pays the rest (about 80 or 70 percent) of the cost of health care - a doctor visit, a lab test, a hospitalization, and more. The member generally has to pay - or "meet" - a deductible first.
Consumer-Directed Health Plans (CDHPs): Also called "consumer-driven health plans," consumer-directed health plans try to increase consumer awareness about health care quality and costs and encourage them to consider these when making health care decisions. CDHP plans usually have a high deductible combined with a savings account - a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA) - that helps pay for health care services.
Copayment (copay): A specified dollar amount you pay when receiving an eligible health care service from a doctor, hospital, or other health care provider in your insurance company's network.
Cost containment: Everyone's trying to find ways to control the rate of growth of health care costs - i.e., "cost containment" - by increasing efficiencies, improving technology, reducing overuse and misuse of the system, and eliminating waste.
Cost sharing: Health plan member pays a share of the costs of their health care services - with copayments, coinsurance, and annual deductibles - every time they use a provider.
Deductible: Many health plans have a feature where the member pays the first portion of his or her health care costs - up to a specific dollar amount called the "deductible" - before the health plan starts to pay. After the member meets the deductible, the health insurance plan starts to pay for a percentage [such as 70 or 80 percent, called "coinsurance"] of the cost of the member's health care services.
Dual eligible: When an individual is eligible for both Medicare and Medicaid benefits, he or she is "dual eligible."
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services: States are required to include some services - like vision, hearing, and dental care - in their basic benefits for children younger than age 21 who receive Medicaid. Services also include follow-up diagnostic and treatment services.
Electronic medical record: The health care industry is moving toward the computerization of patients' health records - including doctor and hospital records, lab work, claims data, and more - that would be shared with any health care providers the patient may use, so care is coordinated.
Employer mandate: This "mandate" - if part of health care reform - will require most employers (with some exemptions for smaller employers) to offer their employees health care benefits and to pay part of the costs.
Employer pay-or-play: An approach used by Massachusetts and Vermont that requires employers to offer - and pay for - health care benefits to their employees, or to pay into a designated public fund that pays for health care coverage for those who don't have employer-sponsored coverage.
Entitlement: Entitlement is "an established or recognized right." Many believe all Americans have a right to quality health care, and that no one should be uninsured. Several federal "entitlement" programs, such as Medicare and Medicaid, provide health care for people who meet eligibility criteria.
Evidence-based medicine: A set of treatment guidelines that doctors follow nationwide.
Federal Employee Health Benefits Program (FEHBP): A program providing health insurance to U.S. federal government employees who can choose from a menu of 170 health plans.
Fee-for-service: A traditional kind of health plan that pays doctors, hospitals, and other health care providers, for each medical service they provide. The patient can pay the bill and submit it for reimbursement to the insurance company, or the provider can submit the bill directly to the insurance company for reimbursement.
Gateway: Also called an exchange. A purchasing arrangement where small employers and consumers can purchase health insurance through a single entity - a state, regional, or national exchange set up for this purpose.
Group health insurance: Also called "employer-sponsored insurance," insurance companies offer benefits to a group, usually the employees of a company or an association. Most Americans with insurance have group health insurance through their employer or their spouse's employer.
Guarantee issue: Requires insurance companies to offer - and renew - health care coverage to employer groups and individuals without denying coverage because of pre-existing conditions, how often a member or group uses health care services, or any other reason. Those who can afford it will pay for coverage, those who can't will receive subsidies.
Health board: A regulatory group that would make decisions about standards of medical treatment and technologies, the rules health insurance companies must follow, and more.
Health care tax credit: This tax break is intended to help small employers and non-profit organizations provide health insurance to their employees. With the tax credit, employers can deduct from their federal taxes part of what they pay toward their employees' premiums.
Health insurance exchange: To increase their buying power, small employers and individuals could buy health insurance from a group called an exchange, which would decide about benefits and costs, as well as what insurance companies would have to do to participate in the exchange.
Health Insurance Portability and Accountability Act (HIPAA): This law, passed in 1996, has many facets to it. It sets privacy and security standards for protecting personal health information. It also ensures that a person who loses his or group health insurance after losing a job can get health care coverage through a high-risk pool - without a waiting period for a pre-existing condition.
Health Reimbursement Arrangement (HRA): Also called a Personal Care Account (PCA), an HRA is a tax-exempt spending account funded by an employer that gives a member funds to pay current or future health care expenses that meet certain qualifications.
Health Savings Account (HSA): An HSA is a tax-exempt savings account that accompanies an HSA-qualified high deductible health plan (HDHP). The funds are used to pay for current or future health care expenses that meet certain qualifications
High-Deductible Health Plan (HDHP): A new kind of health plan that has a high deductible an insured person must meet before the insurance company starts paying for health care services. The plan has low premiums and is often paired with a health savings account (HSA) to help the member pay toward the high deductible.
High-risk pool: State programs that provide health insurance to sick, high-risk people who - on their own - can't buy individual health insurance because of pre-existing conditions and who aren't covered by an employer-sponsored group plan. High-risk pools operate in at least 34 states.
Individual mandate: This would require many or all uninsured Americans to purchase health insurance. And then, insurance companies wouldn't be able to turn them down because of pre-existing conditions. Massachusetts already has an individual mandate that requires all adults to have health insurance.
Lifetime benefit maximum: This is a cap on the amount of money your insurance company will pay toward your health care costs during your lifetime.
Managed care: Managed care plans - like health maintenance organizations (HMOs) - often require members to have a primary care physician (PCP) who manages their care and refers them for tests and to specialists, if necessary. In this way, HMOs try to control the use of health care services to reduce costs and improve the quality of the care provided.
Mandatory benefits: Certain benefits - mental health services and substance abuse treatment, for example - that state-licensed health insurance company must cover in their insurance plans.
Mandatory insurance coverage: See "individual mandate."
Medicaid: Medicaid is a federal program that provides health and long-term care coverage to certain eligible, low-income Americans.
Medical underwriting: Looking at medical history, underwriters at an insurance company determine whether to accept an applicant - or an employee group of applicants - for health care coverage. These underwriters determine how much coverage to give, how much the premiums will cost, and any other details such as exclusions for pre-existing conditions.
Medicare: Medicare is a federal entitlement program that provides health insurance coverage to 45 million people, including people 65 and older, and younger people with certain diseases and disabilities.
Minimum creditable coverage: This phrase refers to what minimum benefits are needed to be considered "insured."
Out-of-pocket costs: Certain member-paid costs not covered by insurance, such as deductibles, copayments, and coinsurance (but not including premiums).
Out-of-pocket maximum: A yearly cap on the member-paid costs not covered by insurance -such as deductibles, copayments, and coinsurance, but not including premiums.
Pay for performance: A payment system where health care providers receive incentives for meeting or exceeding quality and cost guidelines. The goal is to improve the quality of health care services.
Portability of coverage: With a "portable coverage" guarantee, you can change jobs and get health insurance with a new employer without a waiting period and without any pre-existing condition exclusions.
Pre-existing condition exclusions: This is a major issue in health reform and refers to when a person who has an illness or chronic medical condition prior to becoming insured - such as asthma, diabetes, heart disease, or cancer. Currently, he or she may be denied health care coverage for a limited time for that pre-existing condition.
Premium: The amount a health plan member pays out of his or her paycheck, often monthly, for health insurance.
Premium subsidy: To help individuals with the cost of health insurance premiums, a government subsidy would provide either a fixed amount of money or a specified percentage of the premium cost - and probably would be set on a sliding scale based on income.
Preventive care: Health care that focuses on early detection and treatment of chronic conditions and diseases. The goal is to lower health care costs by keeping people healthy longer.
Primary Care Provider (PCP): In managed care health plans - particularly in health maintenance organizations (HMOs) - a member selects a PCP to be his or her "primary" doctor. The PCP is then responsible for giving primary care and also referring the member to specialists, when needed. PCPs are often internists, family practice doctors, or pediatricians.
Public plan option: Currently - other than Medicare and Medicaid - most health care insurance in the United States is through private companies. A public plan would be a new insurance plan -administered and funded by federal or state government - that would give groups and individuals an option to private health insurance.
Purchasing pool: Insurance companies calculate their rates by predicting their financial risk based on the pool of people in the group they insure. Having both high- and low-risk members in a health plan generally balances out the costs.
Self-Insured: An employer can either contract with an insurance company for group insurance or be "self-insured." Being self-insured gives employers direct financial responsibility for paying medical claims - but they usually let a third-party administrator handle the administrative details of the plan.
Single-payer system: If the United States federal government were to provide the only option for health insurance - as do many governments around the world - it would be called a "single-payer system." In this case, the government - or another entity - would pay with tax money for basic medical care delivered by both public and private health professionals.
Small group market: A state-regulated market where small companies that have 50 or fewer employees can buy health insurance for their employees.
Socialized medicine: Also called "nationalized health care," this system - common throughout the world - is run by the federal government, which operates the nation's health care facilities and hires doctors, nurses, and others who work within the system.
Tax credit: A tax credit is the amount of money you can take off your income tax.
Tax deduction: The amount you can take off your adjusted gross income when filing your annual taxes. If itemizing deductions, you can deduct medical expenses and premiums.
Transparency: Transparency means consumers receive detailed information - about doctors, hospitals, and other parts of the health care system - that helps them make informed decisions.
Underinsured: People who have health insurance but not enough coverage, and still can't afford to pay for out-of-pocket health care costs - which effectively limits their access to health care.
Universal coverage: This system would provide health insurance to all Americans - including the current 46 million uninsured people.
Wellness programs: Employers often offer a wide range of wellness programs - like walking programs, fitness center memberships, tobacco-cessation programs, and more - to help their employees stay healthy, increase their productivity, and reduce absenteeism.

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