Health Insurance Terminology A-Z

health insurance terminology a-z text overlaying image of books with 2 book ends with A-Z Understanding the terminology and jargon associated with health insurance can be frustrating. Since this topic isn’t always the easiest to understand. But being familiar with the lingo used in health insurance is a necessity, especially when choosing your health insurance plan. Having a basic knowledge of health insurance terminology will help you to calculate how much you’ll be likely to pay for each plan. As well as help you to find the best plan for your budget and medical needs. 

So, to this end, we’ve created a guide to some common terms related to health insurance. So, that you can make the best decision possible regarding your healthcare plan.


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Health Insurance Terminology A-Z


  • Affordable Care Act (ACA)A healthcare law, also commonly known as Obamacare, that was passed in 2010 with the intention of making it easier for Americans to access affordable health insurance. The ACA established the Health Insurance Marketplace, where Americans can shop for and buy health insurance. This law also made more people eligible for Medicaid, let parents keep their children on their health insurance until they are 26. As well as banned lifetime monetary caps on coverage, set annual in-network out-of-pocket maximums. It also required that insurers in the ACA Marketplace cover at least the 10 essential health benefits. Among many other things.
  • Allowed amount – The most money that a health insurance plan will pay for covered medical services in a given year. “Allowed amount” can also be referred to as “eligible expense” or “payment allowance.”


  • Balance billing – The difference between what a doctor or hospital charges for a service or treatment and what your health insurance plan will cover that you are required to pay.
  • Benefit period – A certain period of time that you are covered for a health benefit – for example, a deductible might reset after a certain amount of time, known as your benefit period. This term is often associated with Original Medicare, which includes Hospital Insurance Part A and Medical Insurance Part B. For example, if you have Original Medicare, and are admitted to a hospital or skilled nursing facility (SNF). The benefit period starts on the day of admission and ends when you haven’t been admitted to a hospital or SNF for 60 consecutive days.


  • Claim – A bill sent to an insurance company to request coverage for a covered medical service. In most cases, your healthcare provider will send claims to your insurance company to get paid.
  • Claim appeal – If your insurance company denies a claim, you can ask the company to change its mind. If your appeal is successful and the claim is approved, the plan will cover the medical treatment or service.
  • COBRA – The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a federal law that allows you to stay on your group health insurance plan even after you lose your job or quit. Not all health plans qualify for COBRA coverage. If you are covered by COBRA, you usually have to pay the full plan premium without help from your employer.
  • Coinsurance – This is the percentage of your medical bills that you have to pay once you’ve met your deductible. For example, if your plan has a 20% coinsurance and your medical bill is $500. You would have to pay $100 out of pocket if you had already met your deductible. If you hadn’t met your deductible yet, you’d have to pay the whole $500 out-of-pocket.
  • Coinsurance limit/maximum – The most money you have to pay in coinsurance for covered medical services in a given year. Once you reach your coinsurance limit. Your insurance company will pay for all of your covered medical expenses in their entirety.
  • Copay – A set amount of money that you pay for a covered medical service or treatment at the point of service. Depending on the plan, you may have to pay a copay for visits to the doctor, lab tests, and prescription drugs.


  • Deductible – A health insurance deductible is a fixed amount that you have to pay out-of-pocket each year before your insurance company pays its share of qualifying medical expenses.


  • Emergency medical condition – A serious illness, symptom, or injury that needs to be treated immediately by a doctor.
  • Excluded services – There are some medical treatments or services that a health insurance plan does not cover.
  • Explanation of benefits – You’ll get an explanation of benefits (EOB) after you make a claim on your health insurance. This form will show the total cost of the medical service. As well as how much your insurance company paid and how much you owe. And EOB is not a bill. Instead, it is a statement that shows how much was covered and how much is left for you to pay.


  • Group health plan A health insurance plan that an employer offers to their workers. Most of the time, employers pay well over half of the cost of group health insurance premiums. This makes the premiums much more affordable (or even free) for employees.
  • Group purchasing arrangement – With a group purchasing arrangement, several employers or individuals buy health insurance together in order to save money on monthly premiums. Each state has its own set of laws surrounding group purchasing arrangements.


  • Habilitation services – A group of health care services that help people learn and get better at skills they need for daily life. Services like physical therapy, occupational therapy, and speech-language pathology are examples of habilitation services.
  • Home healthcare – With home healthcare, you get medical care at home from a nurse or other licensed healthcare professional, instead of in a hospital or other healthcare facility. 


  • In-Network Provider – In most cases, your health insurance company has worked out a deal with a group of doctors, specialists, or hospitals, creating a “network” of healthcare providers for their customers. In exchange for being part of the network and having patients funneled to them, these professionals agree to get paid less for every service they do. That means you will most likely pay a lot less to see an in-network provider.


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  • Medically necessary – A type of medical care that is needed to diagnose or treat an illness or injury, or is otherwise important to a patient’s recovery. Many health insurance companies will only pay for medical care that a doctor or nurse says is medically necessary.
  • Minimum premium plan – With a minimum premium plan, an employer pays all claims up to a certain amount and the insurance company pays the rest. Most of the time, a MPP requires the insurance company to handle claims and run the plan.


  • Network – The facilities and providers that a health insurance company contracts to provide healthcare to the company’s policyholders.
  • Non-preferred provider – A medical professional who doesn’t have a deal with your insurance company is called a “non-preferred provider.” When you go to a non-preferred provider, you usually pay more (also known as an out-of-network provider).


  • Open Enrollment – This is the time of year when eligible individuals and families can sign up for or make changes to an ACA Marketplace plan, or other types of health insurance plans. In most states, Open Enrollment for ACA plans starts at the beginning of November and lasts until mid-January. Employers who offer group health insurance, though, can choose their own Open Enrollment Period.
  • Out-of-network provider – A doctor, specialist, or hospital that doesn’t have a deal with your health insurance company. If you get medical care outside of your plan’s network, you may have to pay more. Or even pay the whole bill out-of-pocket (also known as a non-preferred provider).
  • Out-of-pocket expense – The part of your medical costs that your insurance doesn’t pay for. Coinsurance and deductibles are two examples of out-of-pocket expenses.
  • Out-of-pocket maximum – The most money you have to pay for covered medical services out-of-pocket in a year. After you reach this limit, your insurance company will pay for all of your covered medical costs. Some of the out-of-pocket expenses that go toward your out-of-pocket maximum are deductibles, and copayments. As well as coinsurance for care that is provided by healthcare providers in your plan’s network.


  • Preauthorization / Prior Authorization – Before getting certain treatments, medicines, medical devices, or other medical services, your health insurance company may ask you to get preauthorization. Insurance companies use preauthorization’s to try to cut down on care that isn’t needed.
  • Preferred provider – A doctor or hospital that works with your insurance company and offers discounted services.
  • Premium – Your premium is the amount you pay each month for your health insurance plan, in order to keep your plan in effect. If you don’t pay your premium, you might lose your coverage.
  • Preventative Healthcare – This is routine healthcare that helps you stay healthy and avoid getting sick, or catches severe health problems early. It includes things like check ups, counseling, and screenings.


  • Skilled nursing care – Skilled nursing care is given by a licensed nurse, sometimes with the help of a medical doctor. Often in places like nursing homes, hospitals, and communities for people who need help living on their own. However, it can also be given in your home.
  • Special Enrollment Period – A time when you can sign up for or make changes to your health insurance plan outside of Open Enrollment. To get a Special Enrollment Period (SEP), you usually have to experience a qualifying life event. Like giving birth or adopting a child, changing jobs, getting married or divorced, or moving to a new state.
  • Specialist – A specialist is a doctor who specializes in one specific area of medicine. For example a doctor who only takes care of feet is called a podiatrist or a doctor who only takes care of cancer patients is an oncologist. Being a specialist means that they just focus on one specific issue rather than overall health. Some insurance plans require you to have a referral from your regular doctor before being able to see one of these types of doctors.


  • Urgent Care – This is a medical office you would go to for a serious health condition that requires you to be seen right away but isn’t serious enough to need an emergency room visit.
  • Usual, customary, and reasonable charges – The cost of a medical service in a certain place is based on what other doctors in the area usually charge for the same service.
  • Underwriting – A process that insurance companies use to figure out your health status when you apply for health insurance. It helps them decide how much your premium will be, what limits your policy has and if they will approve or deny your application.


How to Utilize the Terminology

We know, all of this terminology is a lot to take in. But once you understand these terms, it will be much easier to read through and understand all of the health plans available to you. Now, with our help, you’ll know exactly what you should be looking for in a plan. As well as how much you can expect to spend out-of-pocket. 

And if you still need some help, our agents are here to assist you! Your EZ agent can go through all of these terms with you, and help you find the plan that fits your needs, and your budget. And the best part is we do all of this for free. To get started, simply enter your zip code into the bar above or give us a call at 877-670-3557.

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About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.