Glossary of Health Care Terms
Co-Payment (co-pay)
A fixed fee that a health plan member pays for a specific
medical service, such as an office visit or a prescription
drug.
Deductible
The amount an individual or family must pay for health
services each year before the insurance company pays.
Fee for Service
A form of insurance in which medical providers are paid
for each service they provide, rather than receiving a
salary or a fixed amount to cover all of a patient's expected
health-care needs.
Health Maintenance Organization (HMO)
A type of managed health-care plan in which members or
their employees pay a monthly premium in exchange for
a comprehensive set of medical services with co-payments.
Indemnity Plan
An insurance plan that reimburses doctors for individual
services, or the patient for medical expenses.
Medicare
A federal health-insurance program for the elderly and
the disabled available to anybody who qualifies for Social
Security benefits and meets age or disability guidelines.
Medicare HMO
An HMO for Medicare enrollees.
Point of Service Plan (POS)
A health plan that combines features of prepaid and indemnity
insurance. Enrollees can use in-network providers at pre-negotiated
rates or use non-network providers at a higher cost. Many
point of service plans have three levels of coverage:
an HMO; a preferred provider organization (PPO), in which
patients pay 10 percent to 20 percent of pre-negotiated
fees charged by in-network doctors; and out-of-network
providers who charge what they think is fair.
Preferred Provider Organization (PPO)
A combination of hospitals and physicians that agree to
provide health-care services to a group of people at pre-negotiated
rates, usually under contract with a private insurer.
Premium
The amount paid to a health plan or insurance company
by an employer or beneficiary for health coverage. Usually
a monthly payment.
Primary-Care Physician
The "gatekeeper" doctor, usually in an HMO, who coordinates
all care for a patient, prescribes drugs and OKs visits
to specialists and hospitals.
