CHIP – Children’s Health Insurance Program providing low cost or free insurance coverage to qualifying children and teens up to the age of 19. This program is for families whose income does not qualify for Medicaid insurance coverage but who cannot afford private insurance.
Co-insurance – Your share of the costs of a covered healthcare service, calculated as a percent (for example, 20 percent), after you have met your deductible. For example, if the health-insurance plans allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20 percent would be $20. The health insurance pays the balance of the allowed amount.
Co-pay – A pre-determined amount (for example, $20) that you pay for a covered healthcare service, usually at the time of the service. The amount can vary by the type of covered healthcare service.
Deductible – Out-of-pocket healthcare costs for which individuals are responsible, before their health-insurance plan will pay for health expenses.
Donut hole (or coverage gap) – Most Medicare prescription drug plans have a coverage gap, also called the “donut hole.” This refers to a temporary limit on prescription drug coverage, where the policy holder needs to pay a higher percentage of his or her medications after reaching this limit. Coverage then resumes after the individual reaches a higher level of out-of-pocket expenses, at which time the individual would automatically receive “catastrophic coverage.” For the remainder of the year, only a small co-insurance amount or co-payment for covered drugs would be required.
Durable Medical Equipment (DME) – Equipment and supplies ordered by a healthcare provider for everyday or extended use. Equipment may include: wheelchairs, crutches, and commode chairs.
Formulary – A list of prescription medications your insurance provider will cover.
Inpatient Services – Services provided to a patient admitted to a hospital or other facility.
Marketplace/Exchange – Forum where individuals and businesses can compare, choose, and purchase healthcare insurance plans.
Medicaid – Federal and state-based insurance program for qualifying individuals and families with limited income resources.
Medication Tiers (1-4) – Medications are assigned to one of four or five categories known as tiers, based on drug usage and cost.
- Tier 1: The generic version of a brand-name medication; they have the exact same active ingredients as their brand-name counterparts.
- Tier 2: Brand-name medications that are on a list of preferred drugs.
- Tier 3: Preferred specialty brand-name drugs.
- Tier 4: Medications classified as those that require special dosing or administration; these are typically prescribed by a specialist and are more expensive than most medications.
Out-of-pocket limit (maximum) – The total amount that needs to be paid by an individual before the health-insurance plan provides 100 percent in coverage for medically necessary costs.
Outpatient Services – Medical procedures or tests that can be done in a medical center without an admission to the facility. Laboratory tests, radiology, or a visit to the Emergency Department for diagnostic services, are all examples of outpatient services.
Premium – Amount of money charged by the insurance company for coverage. It may be paid in a lump sum or periodic monthly payments, dependent upon the insurance plan.
Prior Authorization – A requirement that your physician must obtain approval from your health plan to prescribe a specific medication for you. Without this prior approval, your health plan may not provide coverage or pay for your medication.
Radiology – Medical specialty of imaging technology to diagnose diseases within the human body.
Step Therapy – When a prescription-drug plan requires an individual to try one or more other, lower-cost medications before covering the prescribed drug.