U.S. Health Care Terms

Adverse Selection – The process by which people who do not feel they need health insurance choose not to buy insurance, thus creating one  pool of healthy, uninsured individuals and another of disproportionately less healthy insured individuals, driving up the cost of insurance.

Agency for Healthcare Research and Quality (AHRQ) – An agency within the Department of Health and Human Services (HHS) that supports research on health care management.

Annual Benefit Limit – An annual monetary limit placed on individuals by insurance companies, beyond which the insurer will no longer pay for services.

Anti-Injunction Act of 1867 – An American law stating that legal challenges to a tax may not be filed in the U.S. court system until the tax has come into effect. If the Supreme Court decides that the fees imposed by the Patient Protection and Affordable Care Act for not purchasing insurance are a tax, then the Supreme Court would not be able to rule on the Act until 2014, when the fines come into effect.

Any Willing Provider – A principle employed by some state laws stating that insurers must allow patients to work with “any willing provider” who is properly licensed to provide the required service.

Affordable Insurance Exchange (Health Insurance Exchange) – Health insurance markets set up by the Affordable Care Act that offer additional transparency requirements and easier comparison between competing health plans.

Balance Billing – The bill given to a patient by a health care provider entailing the costs above the level that the patient’s insurer will pay.

Basic Health Plan (BHP) – Insurance plans covering basic services as defined in the Patient Protection and Affordable Care Act provided by states with federal subsidies to individuals between 133 and 200 percent of the poverty level as an alternative to that state’s health insurance exchange. Scheduled to open in 2014 by the Patient Protection and Affordable Care Act.

Carve-out – Cost-saving strategy employed by insurers to outsource specific services to other companies.

Center for Consumer Information and Insurance Oversight – An agency within the Department of Health and Human Services (HHS) tasked with overseeing state health insurance exchanges, high-risk pools, early retiree reinsurance programs, and regulations on insurance costs. Created by the Patient Protection and Affordable Care Act.

Centers for Medicare & Medicaid Services (CMS) – Federal agency tasked with administering Medicare, Medicaid, and the Children’s Health Insurance Program.

Children’s Health Insurance Program (CHIP) – Jointly state- and federal-funded public health insurance program that provides health insurance to low-income children and some families who earn too much to qualify for Medicaid but not enough to afford private health insurance.

Coinsurance – An insurance payment method in which patients pay a set percentage of the cost of health services (e.g., 10 percent of the total treatment cost).

Copayment – An insurance payment method in which patients pay a flat fee for health services (e.g., $10, regardless of the total treatment cost).

Cost Shifting – The process by which health care providers compensate costs from treating underpaying patients, especially uninsured patients, by increasing costs on other groups, especially insured patients.

Donut Hole – The gap in prescription drug costs not presently covered by Medicare insurance. Medicare covers prescription drug purchases up to a designated limit, after which costs must be covered by the individual until reaching a yearly limit, after which point Medicare insurance covers the cost of additional medication.

Employer Mandate – A requirement on employers to provide their employees with health insurance or face a fine. Implemented by the Patient Protection and Affordable Care Act for companies with 50 or more employees beginning in 2014.

Essential Health Benefits – A minimum level of benefits that insurance plans must provide under the Patient Protection and Affordable Care Act.

Gatekeeper – A health care professional who directs patients to secondary or tertiary care providers as needed. Usually a general physician.

High-Risk Pool Plans (Purchasing Pools) – State-run insurance plans offered by many states to individuals with preexisting conditions who would otherwise be denied insurance in the private market.

Individual Mandate – see minimum coverage requirement

Minimum Coverage Requirement (also, Individual Mandate, Individual Responsibility Provision) – Provision of the Affordable Care Act that requires individuals who can afford to buy insurance with basic provisions to do so or pay a fine, beginning in 2014

Medicaid – State-run health insurance program for low-income individuals; paid for by a combination of federal and state funds and run within broad federal guidelines.

Medical Malpractice Laws – A set of laws governing the legal liability of physicians for mistakes made during treatment. Often perceived as driving up the cost of health care in the United States by forcing health care providers to charge higher rates to compensate for the costs of defending against and paying reparations for malpractice lawsuits.

Medicare – Federal health insurance program for individuals over 65 and/or with certain disabilities.

Lifetime Cap – A maximum level of benefits that an insurance provider will pay for over the lifetime of an insured individual.

Out-of-Pocket Cap – An annual limit created by the Patient Protection and Affordable Care Act on health insurance costs that a patient can pay out of pocket; further costs must be covered by the insurer. Applies beginning in 2014.

Patient Protection and Affordable Care Act (Affordable Care Act, ACA) – Recent health reform signed into law by President Barack Obama focusing on generating greater equity in the American health insurance system and finding ways to reduce spending on health care. Read more.

Pre-existing Condition – In general, any health condition that an individual has before enrolling in a health insurance plan.

Premium Support System – A proposed reform to Medicare in which Medicare recipients would receive a subsidy from the government that they could use to purchase insurance from the private market rather than through the federally administered Medicare program.

Primary Care – Routine diagnostic, therapeutic, and referral services usually obtained from a general practitioner in the consumer’s community.

Secondary Care – Specialized health services that primary care providers generally cannot address. Typically short-term treatments provided by hospitals.

Single-Payer System – A health care system in which one payer, typically the government, pays for all health care services.

Tertiary Care – Highly specialized care that requires long-term treatments, such as surgeries and cancer treatments.

Underwriting – The process by which insurance providers determine whether to sell insurance to an individual and what rates and conditions will apply to that individual.