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Understanding the most common industry terminology will help you better navigate the coming changes, and figure out how they affect you and your family.
Here are some key terms you should know:
A network of physicians, hospitals and other healthcare professionals who coordinate services to improve the quality of patient care while also limiting unnecessary spending. A patient in an ACO may spend less time filling out medical history paperwork and have fewer repeated medical tests because the doctors and hospitals have adopted ways of sharing information and coordinating care. Cedars-Sinai is an approved ACO in the Medicare Shared Savings Program.
The comprehensive healthcare reform law enacted in March 2010, seeks to increase the quality and affordability of health insurance, while also lowering the number of uninsured individuals through federal programs or state "exchanges." Among the law's key provisions, insurance companies are required to cover all applicants within minimum standards regardless of pre-existing conditions or sex; and to provide care for dependent children up to 26 years of age. The ACA also establishes certain mechanisms to increase competition, regulation and incentives to improve the delivery of healthcare. Click here to read the law. See also: Obamacare.
A doctor, hospital or other healthcare provider that has been approved by the patient’s insurance plan to provide medical services. Approved providers also are known as certified providers.
If a patient disagrees with a coverage or payment decision made by Medicare, they have the right to file a formal complaint, known as an appeal.
The amount of time Medicare will cover inpatient care, which is treatment that requires a patient to be admitted to and stay in a hospital or skilled nursing facility. The benefit period ends when the patient has not received any inpatient care for 60 days in a row.
Services and supplies covered by a patient’s health insurance. What is and isn’t covered is decided on by the insurance provider.
A voluntary, three-year pilot project aimed at simplifying healthcare and providing coordinated care for California’s dual-eligible beneficiaries (residents who are eligible for both Medicare and Medi-Cal, the state’s Medicaid program). Patients who choose to enroll in the Cal MediConnect program will receive all of their Medicare and Medi-Cal benefits. However, a patient’s care will be coordinated through the Cal MediConnect-approved and participating health plan and healthcare provider they select. Unlike regular Medicare, you will be required to use a limited network of hospital physicians and also coordinate with your primary care physician in order to receive specialty care. The program is part of an effort known as the Coordinated Care Initiative (CCI), and will begin April 1, 2014, in Los Angeles, Orange, Riverside, San Bernardino, San Diego, Alameda, San Mateo and Santa Clara counties.
Part of the federal Department of Health and Human Services (HSS). The agency runs Medicare and also works with the state government to manage Medicaid (known as Medi-Cal in California) and the State Children’s Health Insurance Program (in California, this is known as the Healthy Families Program).
A request for payment that is submitted to a patient’s medical insurance provider when they receive covered health services.
A patient's share of the costs of a covered healthcare service, usually calculated as a percentage together with a deductible. For example, under a health plan that requires a deductible and 20 percent coinsurance, a $100 doctor's visit would require a patient who has met the deductible to pay $20, with the insurer paying the remaining $80.
Community-Based Adult Services (CBAS)
A Medi-Cal program that provides community-based medical and social services to older adults and adults with disabilities through small regional healthcare centers. The goals of the program are to allow for as much patient independence as possible and to prevent unnecessary long-term placement in a hospital or skilled nursing facility. CBAS replaced the Adult Day Health Care (ADHC) program in 2012.
- All Medi-Cal patients, including those who also have Medicare likely will be required to enroll in a Medi-Cal managed care health plan
- Dual eligibles have the option of enrolling in Cal MediConnect, which would coordinate all of their Medicare and Medi-Cal coverage. Cal MediConnect streamlines medical, mental health, long-term institutional and home- and community-based services into a single health plan.
Usually a fixed amount of money a patient has to pay each time when using a service covered by an insurance plan. Copays tend to be smaller dollar amounts, applied on a
The total amount and type of insurance carried.
A fixed dollar amount a patient must pay out-of-pocket before insurance will cover the remaining eligible expenses. Depending on the insurance plan, deductibles can range from zero to thousands of dollars. Generally, the higher the deductible, the lower the premium.
Department of Health Care Services (DHCS)
California government department that oversees Medi-Cal and other healthcare programs.
A child or other individual for whom a parent, relative or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, benefit plans that provide coverage for dependents must provide coverage for adult dependent children to age 26. This applies to all group health plans and issuers of group or individual insurance, including fully insured and self-funded plans.
Essential Health Benefits
A set of benefits that must be covered in individual and small group plans starting in 2014. Includes services within the following categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
A term sometimes used to refer to the Health Insurance Marketplace. In some states the exchange is run by the state — California's is called "Covered California" — and in other states it is run by the federal government. For more, see Health Insurance Marketplace.
A more restrictive type of Preferred Provider Organization (PPO) plan under which patients must use providers from the specified network of physicians and hospitals for care to be covered by their insurance. Care received from non-network providers is not covered except in emergency situations.
List of prescription medications that are covered by a patient’s health insurance provider. This also is referred to as a preferred drug list.
Generic drugs have the same active ingredients as brand-name drugs and are considered by the government to be as safe and effective, but generally cost significantly less.
As used in connection with the Affordable Care Act, this is a group health plan that was created — or an individual health insurance policy that was purchased — on or before March 23, 2010. Grandfathered plans are exempted from many changes required under the Affordable Care Act.
If a patient has a complaint regarding their Medicare service, such as problems reaching representatives by phone or poor quality of care, a grievance may be filed. This type of complaint does not include disagreements over coverage or payment decisions. For those, a patient must file an appeal.
A requirement that health plans must permit you to enroll regardless of health status, age, gender or other factors that might predict the use of health services.
A contract that requires your health insurer to pay some or all of your healthcare costs in exchange for a premium.
A resource where individuals, families and small businesses can learn about their health coverage options, choose a plan and enroll in coverage. In California, it is called Covered California.
A phrase that refers to the Affordable Care Act (or Obamacare), the comprehensive healthcare reform law enacted in March 2010, as well as supporting state legislation.
A type of health insurance plan that limits coverage to doctors who are part of a specific network that has a contract with the HMO. In general, the plan won’t cover care from out-of-network providers except in an emergency. You usually will need a referral from your primary care provider to see a specialist. HMO plans usually focus on wellness and preventive care.
A state-run program for patients eligible for Medi-Cal, which aims to help them remain safely in their own home. The program offers in-home non-medical services, such as housecleaning and personal care, as an alternative to placement in boarding care or skilled nursing facilities.
Healthcare providers, pharmacies and suppliers who are approved under the patient’s insurance plan to provide covered services and supplies.
Lifetime Reserve Days
Lifetime reserve days are additional days that Medicare will cover when a patient must be admitted to a hospital for more than 90 days in an individual benefit period. Medicare beneficiaries have 60 of these reserve days that can be used in their lifetime.
Long-Term Services and Supports include medical and non-medical care for patients who are unable to perform basic daily activities, such as dressing or bathing, on their own. These can be home- or community-based services, or be provided in assisted living or skilled nursing facilities. Medicare and most health insurance plans do not pay for long-term care. As part of the Coordinated Care Initiative, Medi-Cal Long-Term Supports and Services (MLTSS) will be coordinated through the Medi-Cal managed care health plans.
State- and federally sponsored healthcare coverage program that serves low-income individuals and families.
California's Medicaid program, which pays for a variety of medical services for children and adults with limited income and resources. Medi-Cal is administered by the state Department of Health Care Services and the federal Centers for Medicare and Medicaid Services.
A type of Medi-Cal plan that has contracts with a network of select doctors and hospitals. The beneficiary needs to go to the doctors and hospitals in this network for their care to be covered by Medi-Cal.
National health insurance program for people who are 65 or older, younger than 65 with certain disabilities, or any age with end-stage renal disease.
Hospital insurance, which covers inpatient services such as hospital stays and skilled nursing facilities. Part A also covers hospice and palliative care.
Medical insurance that covers physician visits, laboratory and home-health services and other outpatient care, including some medical supplies and equipment.
Provides patients the option of obtaining their Medicare Part A and B coverage from a private insurance provider that is approved by Medicare. These plans often also include Medicare Part D prescription drug coverage. Plan options include: HMO, PPO, Private Fee-for-Service (PFFS), Special Needs Plans (SNP) and Medicare Medical Savings Account (MSA).
Prescription drug insurance offered by private companies that are approved by Medicare.
Medicare Supplement Insurance (Medigap) Policy
A type of private insurance that pays some of Medicare’s out-of-pocket costs, such as coinsurance and deductibles. Patients must have Medicare Part A and Part B in order to buy a Medigap policy. However, people with Medicare Advantage Plans (Part C) do not need and cannot use Medigap policies.
Medical underwriting is a process used by health insurance companies where they review your age, sex and health history to decide whether to offer individuals coverage, at what price and with what exclusions and limits. Each company has its own guidelines, and prior to Jan. 1, 2014, may deny coverage or charge higher premiums based on this risk analysis. As of Jan. 1, 2014, individual health insurance providers are no longer be legally permitted to refuse coverage or charge higher premiums due to such analysis.
A Medi-Cal program that provides healthcare and social support services to seniors who have been certified to live in a skilled nursing facility, but wish to remain in their own home or with family.
The facilities, providers and suppliers with which a health insurer or plan contracts to provide healthcare services.
An informal term for the Affordable Care Act, so named for U.S. President Barack Obama, who promoted it.
The period of time during which eligible individuals can enroll in a health plan. For 2014, the open enrollment period was Oct. 1, 2013, through March 31, 2014. Individuals also may qualify for special enrollment periods as a result of certain major life changes, such as job loss, marriage or birth of a child.
Healthcare providers who do not contract with that patient's health insurance or plan. Out-of-network copayments and coinsurance usually are more expensive than those for in-network providers.
Expenses for medical care that are not reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance and copayments for covered services. They also include costs for services that are not covered by the insurance plan.
Play or Pay
The Affordable Care Act requires business owners with 50 or more full-time employees to make a commitment in 2015: They can "play" by providing affordable health benefits to employees who work an average of 30 or more hours per week in a month, or "pay" penalties for not offering those benefits.
A type of health insurance plan where you pay less if you receive care from healthcare providers who are part of the plan’s network. POS plans generally require a referral from your primary care provider to see a specialist.
A type of health insurance plan that contracts with doctors and hospitals to create a network of participating healthcare providers. You can receive care from doctors and hospitals outside of the network for an additional cost.
Any physical or mental medical condition that you have before enrolling in a new health insurance policy.
The amount that you or your employer pays to your health insurance company for coverage.
Routine healthcare that includes screenings, check-ups and patient counseling to prevent illnesses, disease or other health problems.
A primary care provider provides most of a patient’s health services, and can be a physician or nurse practitioner. A patient’s PCP is responsible for providing referrals to other services when necessary.
Referred to as CalPACE in California, this is a Medi-Cal program that coordinates heathcare services for older adults who would otherwise be unable to safely live on their own. The program uses a team approach to provide the extra support patients need to remain in their own homes instead of a skilled nursing facility.
The company that issues an insurance policy and assumes the risks associated with the insured.
A referral is written permission from the patient’s primary care provider allowing the patient to see a specialist or receive a medical service, often for a specific medical condition. Many insurance plans will only cover the cost of this specialized care if the patient has received a referral.
Rehabilitation services work to help patients regain or improve their daily skills and functions after they have had an illness or injury. This may include physical or occupational therapy, psychiatric rehabilitation, or other services.
Financial assistance provided by the government to eligible individuals and families to help they pay for health insurance coverage.
Summary of Benefits or Coverage
An easy-to-read summary that lets a person make apples-to-apples comparisons of costs and coverage between health plans.
An in-network facility that requires a higher level of copay from the insured patient compared to a Tier 1 facility.
Also known as “active enrollment,” this process describes the beneficiary selecting the plan in which they want to enroll. See Passive Enrollment.