Glossary of Terms

Affordability Credits: These credits would help lower the cost of coverage purchased through the exchange. Information about a family's income and size is used to determine whether the family qualifies for the credits and if so, what type of contribution the family is expected to make. Back to Family Profiles»

Benefit Design, Benefit Package: The set of services, such as physician visits, hospitalizations, prescription drugs, that are covered by an insurance policy or health plan. The benefit design or package also refers to how costs for these covered services are shared between the patient and the insurance company. For example, the benefit design might require the patient to pay a $25 copay when they visit the doctor, but the insurance plan pays the rest of the cost of the visit. Back to Family Profiles»

Brand Name Drug: A drug that has a trade name and is protected by a patent (can be produced and sold only by the company holding the patent). In contrast, generic drugs have come "off" patent and can be manufactured and sold by any company. Brand drugs are typically much more expensive than their generic counterparts. Back to Family Profiles»

CHIP: The Children's Health Insurance Program (CHIP) is a federal/state partnership that provides low-cost health coverage to children with low incomes yet too high to qualify for Medicaid. In some states, parents can also get health insurance through CHIP. Back to Family Profiles»

COBRA: When employees lose their job, they are able to continue their employer-sponsored coverage for up to 18 months due to the Consolidated Omnibus Budget Reconciliation Act of 1985 or COBRA. Usually, the former employee must pay the full cost of the premium, including the portion typically paid by the employer in order to continue this coverage. During the current recession, a temporary subsidy was put in place to help unemployed workers afford this coverage. Back to Family Profiles»

Coinsurance: The share of medical services paid by the patient, defined as a percent of the total cost. For example, in Medicare, patients are responsible for 20% coinsurance for many outpatient services. Back to Family Profiles»

Copays, Copayments: A fixed amount for each service paid at the time of service. Examples include payments for each physician visit or for each prescription filled. Back to Family Profiles»

Cost-Sharing: Cost sharing refers to the patient's portion of the charges for doctor visits, prescriptions and other types of services. Several benefit provisions determine the patients share of these expenses: deductibles, coinsurance, copayments, and out-of-pocket limits. Back to Family Profiles»

Deductibles: The deductible is an amount that must be paid by the patient before the insurer will begin paying. For example, the covered individual has a $50 deductible, he or she would have to pay the first $50 of health care charges, after which the insurer would begin paying according to the terms of the policy. Back to Family Profiles»

Doughnut Hole: A gap in Medicare's prescription drug (Part D) coverage. In most Medicare drug plans, insurance coverage is suspended after drug costs for the year reach $2,700 , and enrollees are responsible for the next $3,380 before coverage resumes. These amounts increase every year for inflation.Back to Family Profiles»

Electronic Medical Records: Comprehensive, computerized versions of the paper medical records most doctors now use. Establishing nationally recognized standards for such records would allow health care providers to record all of the patientís medical informationóincluding test results, diagnoses, medications, drug allergies, and family historyóand share them, electronically, with any other authorized provider, including doctors, nurses, hospitals, nursing homes, home-care providers, pharmacists, and social workers. Patients, too, would have access to such records. For more information: http://blogs.consumerreports.org/health/2009/03/electronic-health-records.html Back to Family Profiles»

Employer Coverage: Employers today are not required to offer health coverage to their workers. Nonetheless, many employers voluntarily choose to offer health coverage because it is convenient and cost-effective for their workers. Because workers have come to expect health insurance as part of their job, it would be difficult for many employers to attract qualified workers if they didn't offer this benefit. There are exceptions, of course. Certain industries that pay low wages or hire a lot of part-time workers may not offer health benefits. Back to Family Profiles»

Federal Poverty Guidelines:These guidelines indicate the amount of income that represents the ìpoverty levelî for a given family size. For example, in 2009, the poverty level for a single person was $10,830 per year. For a family of three, a family income of $18,310 would place the family at the poverty level (see Table below). The income level associated with the federal poverty level increases every year according to a formula used by the Federal government.   ìMultiplesî of the federal poverty guidelines (like ì133% of FPLî) are often used to define eligibility for various federal and state social benefit programs. Back to Family Profiles»

Source: http://aspe.hhs.gov/poverty/09poverty.shtml 

Fund that Helps Pay the Coverage of Low-Income People: Under health reform, there will be a fund that helps subsidize coverage for lower-income families purchasing in the health insurance exchange. Employers over a certain size (depends on the proposal) must make a contribution to the fund for each employee that does not enroll in coverage through the employer. Back to Family Profiles»

Health Insurance Exchange:A Health Insurance Exchange is a like a health insurance store. "Shoppers" can choose from among several health insurance options arrayed "side-by-side." The Exchange may take on a variety of other duties including: establish health plan standards, enrollment, billing, and other administrative functions, administer coverage subsidies, and respond to consumer grievances. Back to Family Profiles»

High Deductible Health Plans: Health plans with deductibles of $1,150 or more are often termed ìhigh deductible health plans.î If these plans meet certain standards, they can be paired with Health Savings Accounts, which are funded (by an employer or the policyholder) with pre-tax dollars. With this arrangement, patients can pay their cost-sharing in a tax advantaged way or save these funds for future health expenses or even retirement. For more information: http://www.consumerreports.org/cro/aboutus/mission/viewpoint/falsepromisesconsumerdrivenhealthplans0605/ Back to Family Profiles»

High Risk Pool: Today, high-risk pools are health insurance plans organized by states that serve individuals who have been denied coverage (typically because they have a health condition) and donít have access to other insurance through their employer, Medicare or Medicaid. In most states, the premium for this coverage is set somewhat above regular market rates. As a result, many who are otherwise eligible the high risk pool donít enroll because they canít afford it. Back to Family Profiles»

Individual Mandate: A requirement that each individual have health insurance. Exceptions are allowed, for example, religious objection or a lack of affordable options. Back to Family Profiles»

Legal Immigrants: Each state must decide whether or not to provide Medicaid coverage for legal immigrants who have resided in the United States for less than six years (same treatment as under current law). If states opt not to cover recent legal immigrants, these residents would be eligible to purchase coverage in the health insurance exchange. Legal immigrants who have been in the country six years or longer are eligible for Medicaid if they meet the programís other requirements. Undocumented immigrants are not eligible for Medicaid or CHIP, nor can they get credits to purchase in the exchange, regardless of how long they have resided in the United States. Back to Family Profiles»

Medicaid: The Medicaid program is a federal/state partnership that provides health coverage for certain low-income persons. Under current law, e ach state determines the income level at which these groups qualify for Medicaid coverage. Usually, working age adults without dependent children do not have access to Medicaid coverage. For more information: http://www.kff.org/medicaid/upload/Medicaid-A-Primer-pdf.pdf Back to Family Profiles»

Medical Loss Ratio: Across a large insured group, the proportion of the premiums spent on medical care (as opposed to profit or administration) is sometimes called the Medical Loss Ratio. Among large insured groups, such as large employers, the proportion of the premium spent on medical care could be as high as 95%. Among plans sold to individuals, the proportion is sometimes much lower--as low as 65%. While a single policyholder would not generally expect to receive care that is equal to what they paid in premiums, across all people with that coverage, the premiums charged should not be vastly different from the care consumed across the whole group. For more info: http://www.familiesusa.org/assets/pdfs/medical-loss-ratio.pdf Back to Family Profiles»

Medicare:Medicare is a health insurance program, administered by the federal government, for people aged 65 and over, or who meet other special criteria. Medicare has two parts: Part A (Hospital Insurance) which helps pay for inpatient care you get in a hospital,skilled nursing facility, or hospice, and for homehealth care; and Part B (Medical Insurance) which helps pay for doctorsíservices and outpatient care. Prescription drugs are paid through an optional program called Part D. Back to Family Profiles»

Medicare Advantage Plans: Medicare Advantage is an alternative to "traditional" Medicare available in most parts of the country. The federal government pays insurance companies to run these alternative plans as a means of giving seniors more options. These private plans cover the same services as Medicare but use different cost-sharing arrangements. Because they receive a pretty generous payment from the government, these plans often include extra benefits like eyeglasses. They may also use "restricted" networks of providers, like an HMO. About 20 percent of the Medicare population is enrolled in these plans. Most enrollees in these plans donít know them as Medicare Advantage but as the name on their insurance card. Back to Family Profiles»

Medi-gap Coverage: Medi-gap coverage is optional coverage that fills in the ìgapsî in Medicare like the inpatient hospital deductible. This coverage is regulated by the federal government but the policyholder bears the full cost. Back to Family Profiles»

Minimum Coverage Standards: Under the proposed reform bills, minimum standards for health coverage would be established. For example, the bills call for health plans to cover a comprehensive array of services such as inpatient hospital, outpatient hospital, doctors visits, lab, x-ray, prescription drugs, mental health services and maternity services. The plans could not have annual or life-time limits on benefits. Patient cost-sharing would be limited so that it doesnít exceed $5,000 to $6,000 a year (depending on the bill). Lower income families would have even greater protection from catastrophic medical bills. These standards would be used in order to determine whether or not an individual met the definition of being insured. Back to Family Profiles»

Pay or Play: a term which refers to the requirement of companies to offer health insurance to their employees or make a payment to the federal government to help pay for coverage of the uninsured. Back to Family Profiles»

Payment Bundling: a provider payment structure in which health care providers are paid for ìepisodes of careî rather than individual medical procedures. The aim is to improve care and reduce costs by providing doctors and hospitals with an incentive to reduce complications and unnecessary procedures. Back to Family Profiles»

Pre-Existing Conditions: A pre-existing condition is a health or medical problem an individual has before applying to be accepted into a health insurance plan. Back to Family Profiles»

Premiums: Premiums are the "price" charged for health insurance. They are typically charged at regular intervals, such as monthly, and generally the same amount is charged each time. People with employer coverage often just pay a portion of the total premium, with their employer paying the balance. Back to Family Profiles»

Primary Care Doctors: These are the doctors, nurse practitioners and physician assistants who provide primary medical care like routine physicals, vaccinations, and treatments for everyday illnesses like colds and flu. Under reform, various measures strive to improve how care is delivered. There are new roles for primary care providers, such as coordinating their patientís care across various specialists and settings. New payment systems would ensure that primary care providers are reimbursed for these tasks, in an effort to ensure that the supply of providers is adequate. Back to Family Profiles»

The Public Plan Option:A proposed government-sponsored health insurance plan that would compete with private insurance plans. The public plan would offer quality, comprehensive coverage and be subject to the same rules as private insurers. Once up and running, plan operations would be paid out of premium revenue, not taxpayer funds. In the Senate bill, this plan is called Community Health Insurance Option. Back to Family Profiles»

SCHIP: The State Children's Health Insurance Program (SCHIP) became known as CHIP when the program was reauthorized in 2009. See CHIP. Back to Family Profiles»

Who Can Purchase in the Exchange? Not everyone will have the option of choosing coverage between coverage from their employer or coverage through the exchange. Most people with access to employer sponsored coverage or other "qualified " coverage would not be permitted to purchase in the exchange. In other cases, they could purchase coverage in the exchange but could not apply for "credits" to lower the cost of that coverage. However, if the family's cost for employer coverage exceeds 11 percent of income (House Bill) or 12.5 percent of income (Senate HELP Bill), then that family has the option of purchasing coverage in the exchange and applying for credits to lower the cost. Back to Family Profiles»