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Archer Medical Savings Accounts—Individual accounts that may be set up by self-employed individuals and those who work for small companies. Funds in the accounts are used to pay medical expenses.

Coinsurance—The amount you must pay for medical care after you have met your deductible. Typically, your plan will pay 80 percent of an approved amount, and your coinsurance will be 20 percent, but this may vary from plan to plan

Copay—The flat fee you pay each time you receive medical care. For example, you may pay $10 each time you visit the doctor. Your plan pays the rest.

Deductible—The amount you must pay each year before your plan begins paying.

Disability insurance—Pays benefits if you are injured or become seriously ill and are no longer able to work.

Exclusions—Services that are not covered by a plan. Sometimes called limitations. These exclusions and limitations must be clearly spelled out in plan literature.

Fee-for-service insurance—Traditional (indemnity) health insurance where you and your plan each pay a portion of your health expenses, usually after you meet a yearly deductible. In most cases, you can choose any physician, hospital, or other provider (non-network based coverage).

Flexible spending arrangements
—Employees use pre-tax dollars to set up these accounts and draw down on them to pay qualified medical expenses during the year. Unused amounts are forfeited at the end of the year.

Formulary—An insurance company's list of covered drugs.

Group insurance
—Health plans offered to a group of individuals by an employer, association, union, or other entity.

Health maintenance organization (HMO)
—A form of managed care in which you receive all of your care from participating providers. You usually must obtain a referral from your primary care physician before you can see a specialist.

Health reimbursement arrangement—An account established by an employer to pay an employee's medical expenses. Only the employer can contribute to a health reimbursement account.

Health savings account
—An account established by an employer or an individual to save money toward medical expenses on a tax-free basis. Any balance remaining at the end of the year "rolls over" to the next year.

High-deductible health plan
—A plan that provides comprehensive coverage for high-cost medical events. It features a high deductible and a limit on annual out-of-pocket expenses. This type of plan is usually coupled with a health savings account or a health spending account.

High-risk pool—A State-operated program that offers coverage for individuals who cannot get health insurance from another source due to serious illness.

Indemnity insurance—Traditional, fee-for-service health insurance that does not limit where a covered individual can get care.

Individual health insurance
—Coverage purchased independently (not as part of a group), usually directly from an insurance company.

Long-term care insurance—Coverage that pays for all or part of the cost of home health care services or care in a nursing home or assisted living facility.

Managed care—An organized way of getting health care services and paying for care. Managed care plans feature a network of physicians, hospitals, and other providers who participate in the plan. In some plans, covered individuals must see an in-network provider; in other plans, covered individuals may go outside of the network, but they will pay a larger share of the cost.

—A Federal program administered by the States to provide health care for certain poor and low-income individuals and families. Eligibility and other features vary from State to State.

Medicare—A Federal insurance program that provides health care coverage to individuals aged 65 and older and certain disabled people, such as those with end-stage renal disease.

- A group of physicians, hospitals, and other providers who participate in a particular managed care plan.

Open enrollment
—A set time of year when you can enroll in health insurance or change from one plan to another without benefit of a qualifying event (e.g., marriage, divorce, birth of a child/adoption, or death of a spouse). Open enrollment usually occurs late in the calendar year, although this may differ from one plan to another.

Point-of-service plan—A form of managed care plan in which primary care physicians coordinate patient care but there is more flexibility in choosing doctors and hospitals than in an HMO.

Preferred provider organization—A form of managed care in which you have more flexibility in choosing physicians and other providers than in an HMO. You can see both participating and nonparticipating providers, but your out-of-pocket expenses will be lower if you see only plan providers.

—The amount you pay to belong to a health plan. If you have employer-sponsored health insurance, your share of premiums usually are deducted from your pay.

Primary care physician
—Usually a family practice doctor, internist, obstetrician-gynecologist, or pediatrician. He or she is your first point of contact with the health care system, particularly if you are in a managed care plan.

Reasonable and customary charge
—The prevailing cost of a medical service in a given geographic area.


AARP—An advocacy organization comprising 35 million members. AARP focuses on issues affecting men and women aged 50 and older. Go to to find many publications and other resources on health topics, including Medicare and other health insurance. Contact AARP by phone at 1-888-687-2277, or write to AARP, 601 E Street, N.W., Washington, DC 20049.

Agency for Healthcare Research and Quality (AHRQ)—An agency of the Federal Government. Go to the Agency';s Web site at to find more information and tools to help you evaluate health plans, as well as many consumer publications on various health topics. Most of the consumer materials are available in English and Spanish. Call the AHRQ Clearinghouse at 1-800-358-9295 to order free copies of publications.

America';s Health Insurance Plans (AHIP)—A national association that represents health insurance plans providing medical, long-term care, disability income, dental, supplemental, stop-loss, and reinsurance to more than 200 million Americans. Go to and select "Consumer Information," where you can access many consumer guides on health insurance and link directly to companies that provide health insurance coverage. Or, contact AHIP by phone at 1-202-778-3200, or write to AHIP, 601 Pennsylvania Avenue, N.W., Washington, DC 20004.

Joint Commission on Accreditation of Healthcare Organizations (JCAHO)—Evaluates and accredits health care organizations and programs, including hospitals, long-term care facilities, and other health care facilities, as well as health plans, managed care entities, and other insurers. Go to the JCAHO Web site at, call them at 630-792-5000, or write to JCAHO, One Renaissance Boulevard, Oakbrook Terrace, IL 60181.

Medicaid—General information about the Medicaid program is available online at Medicaid is a State administered program; eligibility and covered services vary from State to State. For information specific to the Medicaid program in your State, contact your State Insurance Commissioner; check out the blue pages of your local phone book for contact information.

Medicare—Go to the Medicare Web site at where you can search by category, keyword, or phrases to find information about Medicare. Telephone help is also available; you may call 1-800-MEDICARE 24 hours a day, 7 days a week. Assistance is available in English or Spanish. You will be able to get general information about Medicare, view Medicare booklets, and find out about plans that are ava ilable in your area.

National Committee for Quality Assurance —A group that develops quality standards, performance measures, and recognition programs for organizations and individuals, including health plans, medical groups, physician networks, and individual physicians. Visit their Web site at or call 202-955-3500.

Utilization Review Accreditation Commission—A group that accredits PPOs and other managed care networks. Visit their Web site at, call 202-216-9010, or write them at URAC, 1220 L Street, N.W., Washington, DC 20005.

AHRQ Publication No. 07-0043
Current as of August 2007

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