Glossary of Key Terms in Health Care Reform

Health Care Law is complex, and some of the words and concepts may be unfamiliar. Here are some of the more frequently used terms and their definitions.

By alphabet: A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Actuarial value — Actuarial value is the average share of total health spending on essential health benefits paid for by the plan. The Metallic Tier levels are grouped by Actuarial Value.

AHIP — America’s Health Insurance Plans
AHIP is a national association representing nearly 1,300 member companies that provide medical insurance, long-term care insurance, disability income insurance, dental insurance, and other insurance products to more than 200 million Americans. AHIP’s major policy goal is to expand access to high-quality, affordable coverage to all Americans. The association and its president and CEO, Karen Ignagni, have actively voiced the industry’s support of health care reform.

Annual enrollment period
The specific time each year that you can buy a health insurance plan, renew the plan you already have or switch to another health plan.

BCBSA-Blue Cross and Blue Shield Association
The BCBSA is a national federation of 39 independent, community-based and locally operated Blue Cross and Blue Shield companies. Collectively, the BCBSA provides health care coverage for more than 100 million individuals, or one out of every three Americans.

Biologic(al) drug / Biologic(al) agent
A substance made from a living organism or its products and is used in the prevention, diagnosis, or treatment of disease. Biological drugs include antibodies, interleukins, and vaccines.

Catastrophic plan
Benefit program available to people under age 30 or those with extreme financial hardship. Benefits are subject to an individual deductible estimated to be $6,400 or a family deductible of $12,800. People in a catastrophic plan will be able to get three office visits per year that are not subject to the deductible but may require payment of a copay or co-insurance.

Coinsurance
The percentage you pay for some covered services. If your coinsurance is 20 percent, your health insurance company will pay 80 percent of the cost of covered services, and you will pay the remaining 20 percent.

Consumerism or consumer-driven health plan
Consumerism describes a relatively new way of thinking about health care that is gaining momentum. It is founded largely on the belief that consumers want more control over their health care decisions and how their health care dollars are spent. It also is based on the belief that with increased tools, information, support, and incentives, consumers will be more engaged in their own health matters and live healthier lives. Studies show that more than 50 percent of health care costs result from an individual's behavior.

In addition, consumerism has gained acceptance with the public through the growing availability of a new type of health plan, often called a consumer-driven health plan or CDHP. This plan pairs high deductibles with low premiums and a pretax savings account that can be used for health services or saved for future health expenditures.

Cooperatives
Cooperatives are an idea introduced by Senator Kent Conrad (D-ND) that is modeled after rural electricity, farming, and telephone cooperatives that are owned and organized by members. These nonprofit state or regional health care entities would negotiate rates with health care providers, and have the same benefit plans and licensing and regulatory requirements as private insurance companies. Supporters of cooperatives believe they would offer a competitive way to deliver health care without being run by the government.

Copayment
The fee you pay when you see a doctor or get other services.

Cost sharing
The amount you pay for your health care costs beyond your premium. This includes your deductible, copayments and coinsurance fees.

Deductible
The amount you pay each year before your health plan starts paying for services.

Donut hole
A gap in Medicare Part D prescription drug coverage that, under reform, provides recipients not already receiving Medicare Extra Help who reach the gap, with a one-time rebate for biologic drug expenses at varying rates. By 2020, the coverage gap will be closed. Meaning there will be no more "donut hole," and you will only pay 25 percent of the costs of your drugs until you reach the yearly out-of-pocket spending limit.

Employer-based health care
Employer-based health care refers to health plans that are offered at the workplace for employees. Currently, 170 million Americans receive their health insurance coverage through an employer-based plan. In most cases, employees share some of the costs of the plan with their employer through a payroll deduction. The total cost of these plans is generally a lot less expensive for the employee than if he or she were to purchase the coverage individually.

Essential health benefits
A list of core benefits that all plans must provide under the Health Care Law. This includes many basic services, such as doctor visits and hospital stays. It also includes some preventive services that are not always covered today, such as maternity care and mental health services.

Employer shared responsibility
A provision of Health Care Law that requires groups with 50 or more full-time or full-time equivalent employees to provide affordable health coverage that provides a minimum level of health care coverage to their employees. If affordable health care coverage that provides a minimum level of health care coverage is not provided and a group member obtains a subsidy from the individual Marketplace, the group will be subject to a government penalty.

Evidence-based medicine
Evidence-based medicine is a method of improving and evaluating patient care. It involves combining the best research evidence with the patient's values to make decisions about medical care. Looking at all available medical studies and literature that pertain to an individual patient or a group of patients helps doctors properly diagnose illnesses, choose the best testing plan, and select the best treatments and methods of disease prevention. Using evidence-based medicine techniques for large groups of patients with the same illness, doctors can develop practice guidelines for evaluation and treatment of particular conditions. In addition to improving treatment, such guidelines can help individual physicians and institutions measure their performance and identify areas for further study and improvement.

Flexible Spending Account (FSA)
An account that withholds pre-taxed income in reserve for health-related expenses. Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) are no longer qualified medical expenses, eligible for tax-free payment or reimbursement.

Formulary
A list of approved drugs covered by a health plan. Many plans use tiered formularies. Your costs probably will vary for drugs in different tiers. There usually will be lower-cost and higher-cost drugs for a specific condition you may have. Your lowest costs are typically for generic drugs.

Grandfathering
Individual and group health plans issued on or before March 23, 2010 are "grandfathered" and do not have to comply with some of the provisions of the new law. If an existing health plan changes components of its plan, however, it may lose its grandfathered status.

Group size
The number of full-time and full-time equivalent employees employed by a company. In 2014, the definition of a full-time employee is someone who works at least 30 hours per week.

Habilitative services
Therapies that help people learn skills and functions that are not developing normally. These services are an essential health benefit under the Health Care Law. One habilitative service is speech therapy for children who are not learning to talk as they should based on their age.

Highly-compensated individuals
Generally determined by the Internal Revenue Service as one of 5 highest paid officers, a 10 percent stakeholders in a business, or among the top 25 percent of employees ranked by compensation within a business. Self insured groups are currently prohibited from establishing eligibility rules for coverage and benefits that favor highly compensated individuals. One of the provisions of health care reform would extend that to fully insured group plans, exempting those that are grandfathered.

Health care law
A short way to refer to the Patient Protection and Affordable Care Act. President Obama signed this bill into law in 2010. Key parts of the law go into effect in 2014. This law is sometimes referred to as Obamacare.

Health information technology
Also referred to as electronic medical records, health information technology is a system that allows medical professionals to store patient information electronically rather than on paper. Reform advocates point to this system's great potential to achieve savings while improving the quality and efficiency of health care services.

Health Reimbursement Account (HRA)
An employee health spending account funded and owned by the employer. HRAs can be used to reimburse employees for certain qualified health services and expenses not covered by the company's health plan, including copayment, coinsurance, and deductibles. Funds remaining in the account at year-end may go back to the employer. Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) will no longer be a distribution used for qualified medical expenses, eligible for tax-free payment or reimbursement

Health insurance
A type of insurance that helps pay for health care services. It helps limit your risk of paying for expensive services when you are sick or injured.

Health insurance broker
A person who represents one or more health insurance companies. A broker can help you select products from the companies they represent.

Health Insurance Marketplace (Exchanges)
A new online website where you can compare and buy health plans. Some states have their own Marketplace. Others let the federal government operate their Marketplace. At this time, Pennsylvania uses the federal Marketplace.

Health plan
A health insurance product that offers a specific set of benefits for a certain cost.

Health Maintenance Organization (HMO)
A type of health plan that requires you to select a family doctor, often called a primary care physician or PCP. You need a referral from your PCP to see a specialist, such as a cardiologist (heart doctor). HMOs may not cover services when you get care from providers who are not part of the HMO network.

Health Savings Account (HSA)
A medical savings account for individuals with health plans that have high deductibles. You can contribute pre-tax dollars to an HSA. You can use these tax-free funds to pay for approved health costs.

Individual mandate
A provision of Health Care Law that requires individuals to have health care coverage by 2014 or the individual may be subject to government penalties.

Insurance mandate for employers
Employers must offer health coverage to their employees beginning in 2014, or face a tax penalty.  The penalty increases in successive years.

Marketplace navigator
A person who offers unbiased information and can help you understand your health care options and navigate the Health Insurance Marketplace website.

Markup
Markup refers to the meeting of a legislative committee that reviews the text of a bill before reporting it out. Committee members offer and vote on proposed changes, which are referred to as amendments, to the bill’s language. Most markups end with a vote to send the new version of the bill to the floor for final approval.

Medical assistance / Medicaid
Free public health insurance program administered by the Department of Public Welfare.

Medical Savings Account (MSA)
An account that withholds pre-taxed income in reserve for health-related expenses. Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) will no longer be a distribution used for qualified medical expenses, eligible for tax-free payment or reimbursement from any of these accounts, effective January 2011. A tax penalty on distributions from MSAs that are not used for qualified medical expenses increases from 15 to 20 percent of the amount includable in gross income.

Medicare
Medicare is a government program that provides medical care to seniors (individuals aged 65 and older). People of all ages with certain diseases also qualify for Medicare (e.g., end-stage renal disease). Today, approximately 45 million seniors are covered by Medicare. Medicare is broken down into four parts: hospital insurance (Part A), medical insurance (Part B), the Medical Advantage Plan (Part C), and the newer Prescription Drug Coverage (Part D). The Medicare Advantage Plan is a health plan option offered through private insurance companies. In most cases, there are extra benefits and lower copayments than in the Original Medicare Plan.

Medicare Advantage (MA)
Part of traditional Medicare but offered through private insurance companies. MA plans can include a variety of health plans such as HMO or PPO, prescription drug plans, as well as wellness and prevention benefits. Approximately 10 million or 25 percent of Medicare-eligible seniors are enrolled in Medicare Advantage plans.

Medicare Extra Help
A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance.

Medicare Part D / Part D
The prescription drug coverage program offered under Medicare.

Metallic tiers
Benefit levels the government is creating to make it easier to compare health plans. The metal tiers include platinum, gold, silver, and bronze. Plans will be assigned to one of these tiers based on how much of the cost for health care services is covered by the health insurance company.

Minimum value
Minimum value is the average share of total health spending on essential health benefits paid for by the plan.

Network
The doctors, hospitals, labs, and other health care providers who contract with a health insurance company to deliver services to members like you and your family. They usually charge the insurance company discounted rates for their services.

Out-of-network
Doctors, hospitals, labs, and other health care providers who do not have a contract with a health insurance company. Members typically pay more for services from out-of-network providers. Some health plans may not cover services from these providers.

Out-of-pocket costs
The amount you pay for your health care services. The Health Care Law sets a limit on your out-of-pocket costs, called an out-of-pocket maximum. Once you pay this amount, your insurance plan will pay 100 percent of the covered services you receive.

Patient-Centered Medical Homes (PCMH)
PCMH are new models of care that bring a personalized team approach to the primary care physician's practice by better coordinating and organizing care, especially for patients with chronic conditions. This includes scheduling a patient to see a doctor as soon as a problem develops and employing care managers and health educators to help chronically ill patients receive key tests, take medication, and stay well. Primary care physicians who have adopted this model of care report being more professionally satisfied and achieving superior results.

Patient Protection and Affordable Care Act
This is the official name of the new health care law. President Obama signed this bill into law in 2010. Key parts of the law go into effect in 2014.

Pre-existing health condition
Any condition, illness, or injury for which medical advice or treatment was recommended or received before a person obtains health insurance. Examples include diabetes, heart disease, and cancer. Most health plans, even grandfathered ones, may not deny coverage of or benefits to children under age 19 who have a pre-existing health condition; this extends to adults in 2014. Certain enrollment period limitations apply.

Premium
The fee you pay to your insurance company each month to pay your share of your health plan's costs. This is separate from the deductible, copayments and coinsurance amounts you pay when you use your benefits to get care.

Preferred provider organization (PPO)
A type of health plan that allows members to see providers in and out of the network. You pay lower costs when you see network providers. But you can go outside the network and pay more for your services.

Preventive services
Services that help you stay healthy. They may also detect some diseases in the early stages. Flu shots, mammograms and cholesterol tests are examples of preventive services.

Primary care physician (PCP)
The doctor you see for most of your health care needs. HMO plans require you to choose a PCP, who will refer you to a specialist when needed. PPOs do not require that you choose a primary care physician.

Point-of-service plan (POS)
A plan that combines features of an HMO and PPO. You must choose a PCP to oversee your care. You also have the option of paying more to see providers outside the network.

Rehabilitation services
A retroactive cancellation that treats the coverage as void from the time of enrollment or a cancellation that voids benefits previously paid before the cancellation.

Rescission
A retroactive cancellation that treats the coverage as void from the time of enrollment or a cancellation that voids benefits previously paid before the cancellation

Small Business Health Options Program (SHOP)
A state marketplace where small businesses can shop for health insurance coverage. Also known as "Exchanges" or "Marketplace."

State-Children’s Health Insurance Program (S-CHIP)
S-CHIPs are state-run programs that provide health insurance to uninsured children and teens who are not eligible for or enrolled in Medical Assistance, and whose families cannot afford private insurance. S-CHIP is administered by licensed private health insurance and regulated by state insurance departments. Independence Blue Cross is one of three health plans licensed to offer CHIP in the five-county Philadelphia region.

CHIP was first signed into law in Pennsylvania by former Governor Robert P. Casey in 1992. Pennsylvania's CHIP program would later serve as the model for the federal government's S-CHIP program, which was signed into law by President Bill Clinton in 1997.

Self-funded plan / Self-insured plan
A health plan under which an employer or group sponsor is financially responsible for paying plan expenses, including claims made by group plan members

Senate Health, Education, Labor, and Pensions (HELP) Committee
The Senate HELP Committee is one of two committees in the Senate, along with three in the House, drafting health care reform legislation this summer. This committee has broad jurisdiction over the operation of our nations health care, schools, employment, and retirement programs.

Single-payer health care
In a single-payer health care system, the government collects money, primarily through tax revenue, and pays all the health care bills for its citizens. Countries with a single-payer system include Canada, the United Kingdom, and Sweden.

Tax credits / Subsidies
Subsidies that will lower the costs of health care for many people based on their income level. Some people may be eligible for health plans with $0 or low-cost premiums. Others will be eligible for tax credits that help lower their monthly premiums and also give them a break on their out-of-pocket health care costs (a deductible, copayments, and coinsurance amounts).

Uninsured
There are currently 46 million Americans who do not have health insurance. In addition to those who can't afford health care, millions more are "underinsured" and struggle to pay medical bills or go without needed care because of cost. Covering the uninsured is one of the key objectives of health care reform.