Co-insurance: An agreement between the insured and the insurance company where payment is shared for all claims by the policy. A typical arrangement is 80%/20% up to $5,000. The insurance company pays 80% of the first $5,000 and the insured pays 20%. Usually after 80% of $5,000, the insurance company then pays 100% of covered expenses during the remainder of the calendar year up to any limits of the policy.

Co-payment: A small charge paid at the time a medical service is received. It does not accumulate towards a plan's deductible or out-of-pocket maximum and is designed to discharge utilization. (See Co-insurance)

Covered Expense(s): An expense that will be reimbursed according to the terms of the plan or insurance contract.

Deductible: The amount of covered expenses that the insured must pay before a plan or insurance contract starts to reimburse for eligible expenses.

Guaranteed Renewable: The insured's right to continue an in-force policy by the timely payment of premiums. The insurance company cannot change the coverage or refuse to renew the coverage for other than non-payment of premiums (includes health conditions and/or marital or employment status).

Indemnity Insurance: Health care insurance plan providing benefits in a predetermined amount for covered services. Traditionally, the insurer pays on a fee-for-service basis with no involvement in the actual delivery of health care services.

Managed Care: Is a term used to describe the coordination of financing and provision of health care to produce high-quality health care for the lowest possible cost. It is a system that imposes control on the utilization of medical services and on the providers who renders the care. Managed care is provided through managed indemnity plans; Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPOs), Health Maintenance Organizations (HMOs), or any other cost management environment.

National Association of Insurance Commissioners (NAIC): An organization that assists state insurance departments and helps draft model laws. They are based here in Kansas City. Their website is:

Network Providers: A group of providers in a managed care arrangement with several delivery points. Enrollees may be required to use only network providers or may have reduced benefits for using non-network providers for medical services.

Out-of-Pocket Expenses: Those health care costs that must be borne by the insured.

Out-of-Pocket Maximum: The maximum amount that an insured is required to pay under a plan or insurance contract. This may or may NOT include the deductible. Please read the plan carefully.

Participating Provider: A provider who has agreed to contract with a managed care program to provide eligible services to covered persons.

Pre-existing Condition Clause: A clause in an insurance contract or plan that specifies if benefits will or will not be paid for a pre-existing condition. (Example: "the insured must be covered by the plan for a certain period of time or have gone a certain amount of time without any treatment.") Additionally, the clause may limit the benefit payable for treatment of pre existing conditions until a certain time period of coverage has elapsed, usually six months to a year.

Preferred Provider Organization (PPO): Managed care arrangement consisting of a group of hospitals, physicians, and other providers who have contracts with an insurer or other sponsoring group to provide health care services to covered persons in exchange for prompt payment and increased patient volume.

Rider (Exclusion): An amendment to insurance contracts limiting, or excluding an existing coverage for certain conditions. For example, a rider to a policy may exclude coverage for treatment to an applicant's knee.

Underwriters: Insurance professionals who determine if and on what basis an insurer will accept an application for insurance.
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