| Capitation |
A system used in HMO plans
where a provider for a plan is paid a certain
amount per month for each member of the plan who is
signed up under that provider. The provider a person is signed up under is
that person's PCP. |
| Coinsurance |
This is where the member and the health plan
company share in the costs of the medical expenses. Usually the member
pays a much smaller percentage. |
| Co-Payment |
This is where the health or dental plan
requires a member to pay a certain set amount for a certain service. The
total cost for that service does not affect the co-payment amount. |
| Covered |
This refers to whether or not a plan considers
a condition or procedure as "within the plan". For instance most
health plans will specifically exclude surgery or treatments solely for
the purpose of appearance. The cost for a face-lift or liposuction
procedure and complications from these procedures would be borne
completely by the member. These costs would not
count toward a plan deductible or maximum
out-of-pocket. This would not be a "covered" condition or
treatment. |
| Deductible |
This is where the member
pays 100% of the costs until a certain amount has been paid in a year. The
deductible could apply to all medical services, or just certain ones. |
| Health Plan
Company |
A corporation that owns and administrates the
health plan. It can be regulated by the California
Department of Insurance or the California
Department of Corporations. This is who a member's contract or
agreement is with. An agent has to be signed up with each company he or
she offers plans for. |
| HMO |
A health plan where a member
is signs up under a plan, and also signs up under a network
provider who then becomes the member's PCP. The
PCP receives a monthly payment from the health plan for the purposes of
providing care to the member. The costs of many of the services provided
to the member by the PCP are generally borne by the PCP. |
| Managed Care |
It used to be that what health care a person
received was decided upon by the person, his physician, and what the
person could afford. In a managed care plan there are additional entities
taking part in these decisions. This is often called
"utilization" (deciding what health care services the will be
utilized in treating or diagnosing the member). The health plan
company can participate in or set policies regarding utilization, and the PCP
or the medical group he or she belongs to can play a part. HMO
plans are considered to be more "managed" than PPO
plans. The people making the decisions often must weigh such factors as medical
necessity, cost and effectiveness of procedure, and of course what the
plan's benefits cover. |
| Maximum Out-of
Pocket |
Most health plans will set a limit on how much
a member will have to spend out of his or her own
pocket in a given year. After this the health plan usually covers 100% of
the medical costs. Certain expenses will not be stop for the members once
this limit has been reached. This is generally how much will the member
have to spend if there are very high medical costs. This is an important
benefit, and should be understood fully. Some plans will exclude more
services than others for this limit. |
| Medically
Necessary |
This term applies to two things. 1) Does a
condition really need treatment? 2) Is a treatment or diagnostic
procedure effective for the condition, and/or is it the most cost
effective treatment. This is an important term that is almost always
defined in health and dental plans. |
| Member |
A person and family members who have signed up
together and been accepted for a health or dental plan. If the plan is
offered by an insurance company, the member is usually referred to as the
"insured". On HMO and PPO
plans, the health plan company is
usually operating as a corporation, and the term member or subscriber is
usually used. |
| Negotiated Rates |
Most health plans today have networks
of providers. These plans often set fee schedules
limiting how much the provider can charge for specific services to a member.
It is negotiated between the providers and the health
plan companies. |
| Network |
A health plan company will have a list of providers
that have signed up and contracted with them to provide health care to the
plan's members. A member receives greatly increased
benefits and lower costs if he or she utilizes a network provider. Each
company will have books of network providers they will supply to their
members. |
| PCP |
Primary Care Physician A network
provider contracted with an HMO plan that a member has signed up under.
The member goes to the PCP for all health care needs. The PCP or the
management of the medical group he or she belongs to will make many of the
decisions as to what conditions need treatment, and what treatment is
appropriate. See medically necessary. |
| PPO |
Preferred Provider Organization
The name for a type of health plan where the health plan company has
contracted with a network of providers
to provide health services to their members. The
member can go to any network provider he or she chooses and still receive
the full benefits of the health or dental plan. If the member goes to a
provider who is out of the network, the member will not be protected from
high prices charged by that provider, and the health plan will pay for
less or possibly none of those costs. It will increase the member's
deductible and out-of-pocket maximum. See negotiated
rates. |
| Premium |
This is how much the member
has to pay each month for the health plan. It could be paid monthly, every
2 or 3 months, even yearly. Paying the premium is what keeps you enrolled
in the plan. A good health plan will state specifically that they cannot
cancel the member or single them out for a rate increase as long as
premiums are paid. Exceptions to this could be age limits, or if a person
moves out of state. |
| Provider |
A doctor, medical practitioner, laboratory,
outpatient surgery clinic, hospital, chiropractor, dentist, etc. that
provides health care services to the member. A
provider could be in or out of a network. |