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Health care and prescription definitions

Health Care Terms
Group Plans
Individual Plans
Disability Insurance

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Hea;th Care Terms

PPO (Preferred Provider Organization)
The most commonly used plan of all health insurance plans, a PPO provides cost effective services when utilizing hospitals and physicians within the network. The advantage of a PPO plan allows the insured person to receive covered benefits whether choosing a participating or non-participating provider. Seeking coverage from a provider outside of the network, however, will result in a reduction of benefits.

HMO (Health Maintenance Organization)
This is an “all” or “nothing” plan. A covered person must choose a participating PCP and stay within the network in order to receive benefits at 100%. All in-network services must be approved and referrals to other in-network providers are required. Some policies require a co-pay for office visits. However, should a covered person seek medical attention from a provider outside of the network, they will not receive benefit, unless due to emergency.

POS (Point of Service)
This plan is a combination of an HMO and a PPO. A covered person still chooses a participating PCP, however, the plan provides for a greater financial benefit (100%). The covered person is also responsible for obtaining referrals to see other participating providers. Once again, should a covered person seek medical attention from a provider outside of the network, they will receive benefits at a reduced rate.

Primare Care Physician (PCP)
A doctor chosen by the member from a list of network participating physicians. The physician may practice in family, internal medicine, general practice, and/or pediatrics and in some cases obstetrics/gynecology. The physician has the ongoing responsibility for your medical care.

Network
A group of physicians, hospitals and other health care providers who are contracted with an organization which has agreed to charge generally lower rates to their members.

Deductible
The amount which each covered person must pay each calendar year for covered medical services before the plan begins to pay benefits under the policy.

Co-Pay
A fixed fee paid by each covered person for specific services, usually doctor visits and emergency room visits. Once the co-pay has been paid, the policy will pay the remainder of the medical charges according to your plan benefits. Co-pays do not apply toward deductibles or the out-of-pocket maximum.

Co-Insurance
Both the covered person and the insurance company share a percentage of covered expenses under the plan. Once the deductible has been met, the covered person will pay the appropriate percentage for medical services rendered. Once the maximum limit (out of pocket) is met by the covered person, the insurance company pays 100% of covered expenses for the remainder of the calendar year.

Out-of-Pocket
The maximum amount a covered person will pay for services rendered under the policy before any other covered medical services will be fully paid by the insurance company.
There are two (2) types of out-of-pocket limits: 1.) individual; 2.) family. Every covered person has an out-of-pocket limit. There is also a limit for the entire family, usually only two or three individuals need to meet there individual out-of-pocket to meet a family’s out-of-pocket limit.

Health Care Terms

Generic (Tier 1—lowest co-pay)
Non-brand name drugs that are sold at a lower cost, which is usually equivalent to another name brand drug.

Preferred Brand (Tier 2—med-level co-pay)
Drugs that have been approved as cost effective as well as safe and effective.

Non-Preferred Brand (Tier 3—highest co-pay)
Drugs that have been approved as safe and effective, but the cost is usually higher and at times may require a doctor’s approval from the insurance company before being dispensed.

Note:
Some plans require that a “separate” prescription deductible be met before the applicable co-pay is paid.

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