How to use this glossary
These are the words you meet on plan summaries, explanations of benefits and medical bills. Each entry has three parts: what the term means, what it means when a bill arrives, and where to read more on this site. The definitions are paraphrased from the HealthCare.gov glossary unless the entry names another government source, such as CMS, the IRS or Medicare.gov.
Terms that describe enrolling in coverage, such as enrollment periods, are left out on purpose: this site covers how costs work once you have a plan. Your plan's own documents, and the uniform glossary it provides with its Summary of Benefits and Coverage, are the final word on what any term means for your plan.
A
- Allowed amount
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The most your plan will pay for a covered service. You may also see it called the eligible expense, payment allowance or negotiated rate. For in-network care it is the price the provider agreed with the plan.
On a bill: Your coinsurance is a percentage of this figure, not of the provider's list price. An explanation of benefits from your plan usually shows it next to the original charge.
Read more: Networks and surprise bills
- Appeal
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A request for your plan to look again at a decision to deny a benefit or a payment. Plans must describe how to appeal and by when.
On a bill: If a claim or a drug is refused, the denial notice should explain the appeal route. Keep the paperwork and note the deadlines.
Read more: Drug lists and tiers
B
- Balance billing
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When a provider bills you for the gap between what it charged and the plan's allowed amount. In-network providers cannot do this for covered services.
On a bill: A balance bill is not cost sharing, so it does not count toward your deductible or out-of-pocket maximum. The No Surprises Act bans it in several situations.
Read more: Networks and surprise bills
C
- Claim
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A request for payment sent to your plan, usually by the provider, after you receive care. You may sometimes need to send one yourself.
On a bill: The plan's response to a claim is what produces the statement of what it paid and what you owe.
- Coinsurance
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Your share of the cost of a covered service, written as a percentage, such as 20 percent. It usually begins once the deductible is met.
On a bill: Because it is a percentage, it grows with the price of the care. The out-of-pocket maximum puts a ceiling on it for covered in-network care.
Read more: The four core cost words
- Copayment (copay)
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A fixed dollar amount you pay for a particular covered service, such as an office visit or a prescription. The amount is set in advance.
On a bill: Plans differ on whether a copay applies before the deductible and whether it counts toward it. The plan summary shows this service by service.
Read more: The four core cost words
- Cost sharing
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The part of the cost of covered care that you pay yourself: deductibles, copayments and coinsurance together. Premiums are not cost sharing.
On a bill: This is the spending the out-of-pocket maximum caps.
Read more: Out-of-pocket maximum
D
- Deductible
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The amount you pay for covered services in a plan year before your plan starts to pay its share. Some services, such as many preventive services, are covered before you meet it.
On a bill: Early in a plan year, a bill for covered care can be the full allowed amount because the deductible has not been reached yet. It resets each plan year.
Read more: The four core cost words
E
- Emergency services
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Treatment for a condition serious enough that waiting for care could put health at serious risk. Under the No Surprises Act, as described by CMS, plans must cover emergency services without prior approval and at in-network cost sharing, even out of network.
On a bill: An out-of-network emergency provider cannot balance bill you in the situations the law covers.
Read more: Networks and surprise bills
- Essential health benefits
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Ten broad categories of care that plans following the Affordable Care Act's rules must cover, including emergency services, hospital care, maternity and newborn care, mental health and substance use services, prescription drugs and preventive care.
On a bill: Cost sharing for covered essential health benefits counts toward the out-of-pocket maximum in those plans.
Read more: Out-of-pocket maximum
- Excluded services
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Health care services that your plan does not pay for or cover.
On a bill: You pay the full cost of an excluded service, and it does not count toward your out-of-pocket maximum. The plan summary lists the main exclusions.
Read more: Reading an SBC
- EPO (Exclusive Provider Organization)
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A managed care plan that covers services only from doctors, specialists and hospitals in its network, except in an emergency.
On a bill: Non-emergency care from an out-of-network provider is generally not covered at all.
Read more: Plan types
F
- Formulary
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The list of prescription drugs your plan covers, also called a drug list. Many plans group the drugs on it into tiers.
On a bill: A drug's tier on the formulary largely decides what you pay for it at the pharmacy.
Read more: Drug lists and tiers
G
- Generic drug
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A prescription drug with the same active-ingredient formula as a brand-name drug, rated by the Food and Drug Administration as just as safe and effective.
On a bill: Generics usually cost less and often sit on a plan's lowest tier.
Read more: Drug lists and tiers
- Good faith estimate
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An estimate of expected charges that providers generally must give, in advance, to people who are uninsured or are not using their insurance for a service. CMS describes this under the No Surprises Act.
On a bill: If the final bill is much higher than the estimate, CMS describes a dispute process.
Read more: Networks and surprise bills
H
- HDHP (High Deductible Health Plan)
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A plan with a higher deductible than a traditional plan. If it meets IRS requirements, it can be paired with a health savings account. The IRS sets the qualifying minimum deductible and maximum out-of-pocket amounts each year.
On a bill: Expect to pay more of the cost of care yourself early in the year, though preventive care can still be covered before the deductible.
Read more: Plan types and HSAs
- HMO (Health Maintenance Organization)
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A plan that usually limits coverage to care from doctors who work for or contract with it, and generally does not cover out-of-network care except in an emergency. It may require you to live or work in its service area.
On a bill: A visit to an out-of-network doctor for non-emergency care may not be covered at all.
Read more: Plan types
- HSA (Health Savings Account)
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A tax-advantaged account for paying qualified medical expenses, available to people covered by an HSA-eligible high deductible plan who meet the IRS conditions in Publication 969.
On a bill: Money in the account can pay deductibles, copays and coinsurance tax-free when used for qualified medical expenses. Unused money carries over each year.
Read more: Plan types and HSAs
I
- In-network
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Describes a provider or facility that has a contract with your plan to provide care at agreed prices.
On a bill: In-network care usually costs you less, and the provider cannot balance bill you for covered services.
Read more: Networks and surprise bills
M
- Metal categories
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The Bronze, Silver, Gold and Platinum labels on Marketplace plans. They describe how the plan and you split costs on average, not the quality of care.
On a bill: Bronze plans generally have lower premiums and higher costs when you get care; Platinum plans the reverse.
Read more: The premium trade-off
N
- Network
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The facilities, providers and suppliers your plan has contracted with to provide health care services.
On a bill: Whether a provider is in the network is one of the biggest single factors in what a visit costs you.
Read more: Networks and surprise bills
- No Surprises Act
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A federal law whose main protections began with plan years starting on or after January 1, 2022. In the situations it covers, such as most emergency care, certain care from out-of-network providers at in-network facilities and air ambulance services, you pay only in-network cost sharing and cannot be balance billed.
On a bill: Ground ambulances are not covered by the federal ban. CMS runs a help desk for questions about surprise bills.
Read more: Networks and surprise bills
O
- Out-of-network
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Describes a provider or facility that has no contract with your plan.
On a bill: Depending on the plan type, out-of-network care may cost more, count toward a separate limit or not be covered at all, outside the situations the No Surprises Act protects.
Read more: Networks and surprise bills
- Out-of-pocket costs
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What you pay for medical care that your plan does not reimburse: deductibles, copayments and coinsurance for covered services, plus the full cost of anything not covered. Premiums are counted separately.
On a bill: Add your out-of-pocket costs to a year of premiums to see what a plan really cost you.
Read more: Out-of-pocket maximum
- Out-of-pocket maximum (limit)
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The most you have to pay for covered services in a plan year. After your deductibles, copayments and coinsurance for covered in-network care reach it, the plan pays 100 percent of the allowed amount for covered services.
On a bill: Premiums, out-of-network care, balance bills and excluded services do not count toward it. Federal rules set an upper limit that changes each year.
Read more: Out-of-pocket maximum
P
- POS (Point of Service plan)
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A plan where you pay less when you use providers in its network, and where you need a referral from your primary care doctor to see a specialist.
On a bill: Seeing a specialist without the referral may mean the visit is not covered as you expect.
Read more: Plan types
- PPO (Preferred Provider Organization)
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A plan where you pay less when you use providers in its network, but you can see out-of-network doctors, hospitals and other providers without a referral at an additional cost.
On a bill: Out-of-network care is covered, but often with higher cost sharing and the risk of a balance bill where the law does not protect you.
Read more: Plan types
-
A decision by your plan that a service, treatment, drug or piece of equipment is medically necessary, made before you get it. Some plans require it for certain care. It is not a promise that the plan will pay.
On a bill: Care that needed preauthorization and did not get it may not be covered. The plan summary flags services that need it.
Read more: Rules attached to some drugs
-
The amount you pay for your health insurance every month. You, your employer or both may pay it.
On a bill: You pay it whether or not you use care. It does not count toward your deductible or out-of-pocket maximum.
Read more: The four core cost words
- Prescription drug coverage
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The part of a health plan that helps pay for prescription drugs. Prescription drugs are one of the essential health benefits.
On a bill: How much you pay depends on the drug's tier and on whether drug costs are subject to a deductible.
Read more: Drug lists and tiers
- Preventive services
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Routine care such as certain screenings, check-ups and vaccines, aimed at preventing illness or catching it early. Many are covered without a copayment or coinsurance when delivered by an in-network provider, even before the deductible is met.
On a bill: A preventive visit can still produce a charge if other, non-preventive services are provided during it.
Read more: The four core cost words
Q
- Qualified medical expenses
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Under IRS Publication 969, the medical and dental expenses that can be paid from an HSA without tax.
On a bill: HSA money spent on anything else is taxable and usually carries an additional 20 percent tax, with exceptions such as after age 65.
Read more: Plan types and HSAs
R
- Referral
-
A written order from your primary care doctor for you to see a specialist or get certain services. Some plan types require one.
On a bill: In plans that require referrals, specialist care without one may not be covered.
Read more: Plan types
S
- Step therapy
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A coverage rule, described by Medicare.gov for drug plans, under which a plan asks that a different, usually lower-cost drug be tried first before it covers the one prescribed.
On a bill: If a prescription is refused because of step therapy, the prescriber can usually ask the plan for an exception.
Read more: Rules attached to some drugs
- Summary of Benefits and Coverage (SBC)
-
A short, easy-to-read summary of a plan's benefits and costs in a standard format that all plans use, so plans can be compared like for like.
On a bill: The first page lists the deductible, the out-of-pocket limit and whether you need referrals.
Read more: Reading an SBC
T
- Tier
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A cost level on a plan's drug list. Plans group drugs into tiers, and drugs on lower tiers generally cost you less, as Medicare.gov describes for drug plans.
On a bill: Two drugs for the same condition can cost very different amounts if they are on different tiers.
Read more: Drug lists and tiers
U
- Uniform glossary
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A standard glossary of common insurance and medical terms that plans must make available alongside the SBC, so that terms mean the same thing from plan to plan. The Department of Labor publishes it.
On a bill: When a term on your SBC is unclear, the uniform glossary gives its standard meaning.
Read more: Reading an SBC
Next: Premiums, deductibles, copays and coinsurance: who pays what, and when