Health Insurance Glossary
ACA - Affordable Car Act / Access Fee / Catastrophic Health Insurance / Co-Insurance / Co-Pay / Deductible / Discount Health Plan / EPO - Exclusive Provider Organization / Exclusion / HMO - Health Maintenance Organization / HSA - Health Savings Account / Major Medical Health Insurance / Mandated Health Benefits / PPO - Preferred Provider Organization / Pre-Existing Condition / Premiums / Provider Network / Reasonable and Customary Charges (Usual Customary and Reasonable, UCR)
If your plan has a deductible, after you have met that deductible for the covered period of time, your health plan may have a “co-insurance.” This means that the insured person will be responsible for a certain percentage of medical costs after the deductible has been met. Back to Top >
A deductible is a specific amount of money that you agree to pay before you receive any benefits for covered services from the health insurance carrier. Deductibles can vary, but if your policy has a $1,500 deductible, and you receive doctor’s care and medication that costs $1,200, you must pay for all of it. The carrier is not responsible for the amount of the covered service or medication you pay for up to the amount of deductible.
If your plan has a deductible, than in addition to the monthly premium, you must also pay for all services until you reach the deductible amount. Generally, the higher the deductible is, the lower the monthly premium will be. For example, if your plan has a $10,000 deductible, your premium would be lower than if you had a $1,000 deductible, but if you are sick or injured, you will have to pay $10,000 worth of treatment before the insurance pays anything. (Check your policy to see what the options are.)
The entire deductible has to be met before your carrier will cover many of the services you could need, including hospital stays. However, many preventive services are paid for by the insurance and do not require that you meet the deductible.
After you reach the deductible amount during a specific period of time, the carrier will begin reimbursing for covered medical services and treatment as specified in the policy. This may be at 100% co-insurance or could be another percentage, such as 50% of your medical treatment and services.
Once you meet your deductible then you’re done for that calendar year or for the period specified in your plan. The following year, or next deductible period, you have to start satisfying the deductible all over again. Back to Top >
A “discount health plan” refers to a type of “buyers’ club” that specifically markets reduced-rate health care services. The Plan typically charges a membership fee in exchange for a list of health care professionals who will provide services at a discounted rate to members of the Plan. Plans may be marketed to consumers as a way to save money on various health services, such as medical, dental and vision care, as well as pharmacy and/or chiropractic services.
Be aware that state laws protecting consumers of insurance will not protect people who buy Discount Health Plans. For example, health insurance laws that guarantee access to providers, do not apply to these plans. Discount Health Plans do not qualify as “creditable health insurance coverage,” and do not meet the requirements of the Affordable Care Act (ACA) for coverage, meaning you will have to pay a tax penalty for not having ACA-compliant health insurance.The Division of Insurance provides guides and fact sheets to help you understand Discount Health Plans. Back to Top >
A Health Savings Account is a type of savings product that offers a different way for consumers to pay for their health care. HSAs are designed to encourage individuals to save money they may need for future health care expenses on a tax-free basis.
To be able to take advantage of HSAs, you must be covered by a qualified High Deductible Health Plan (HDHP). Because an HDHP generally costs less than what traditional health care coverage costs, the money saved on insurance can be put into the Health Savings Account.People can sign up for Health Savings Accounts with banks, credit unions, and insurance companies, and sometimes their employers. The IRS has more information on the tax benefits and consequences of HSAs. Back to Top >
The cost associated with a health care service that is consistent with the going rate for identical or similar services within a particular geographic area.
Reimbursement for out-of-network providers is often set at a percentage of the “usual, customary and reasonable” charge, which may differ from what the provider actually charges for a service.
When an insurer disallows a portion of a charge as being in excess of the Usual and Customary allowance, it means only that the charge is in excess of the standard the company used to determine Usual and Customary, or UCR. Providers are free to charge whatever fee for service they choose. Your insurance coverage is designed to provide benefits up to the plan’s Usual and Customary percentile and is priced accordingly.
Your policy should contain a definition of Reasonable and Customary (or UCR) and explain how claims will be paid. If you disagree with the amount paid or if you believe a claim was denied improperly, there is a step-by-step process by which consumers may appeal the decision.
If you have questions or complaints about your insurance, please contact the Colorado Division of Insurance for assistance.