Insurance Dictionary
Health Insurance Dictionary
75 plain-English health insurance terms covering plans, costs, networks, Marketplace coverage, Medicare and more.
Advance premium tax credit (APTC)
Simple meaning: The part of a premium tax credit paid in advance to lower monthly Marketplace premiums.
Insurance meaning: An advance payment of an estimated premium tax credit made to the insurer on behalf of an eligible enrollee, subject to eligibility and reconciliation rules.
Also called: APTC
Affordable Care Act (ACA)
Simple meaning: A federal health law that changed health insurance rules and created Marketplace coverage and consumer protections.
Insurance meaning: The Patient Protection and Affordable Care Act and related amendments, which established major health insurance market reforms, Marketplace rules, subsidies, benefit standards, and other requirements.
Also called: ACA; Obamacare
Allowed amount
Simple meaning: The maximum price the plan recognizes for a covered service.
Insurance meaning: The maximum amount a plan uses as the basis for payment for a covered health care service. It may also be called an eligible expense, payment allowance, or negotiated rate.
Also called: Allowed charge; Negotiated rate
Appeal (health insurance)
Simple meaning: A request asking the health plan to review a denial or coverage decision again.
Insurance meaning: A formal request for reconsideration of an adverse benefit determination. Internal and external review rights depend on the plan and applicable law.
Balance billing
Simple meaning: A provider bills you for the difference between its charge and what the plan allows.
Insurance meaning: Billing a patient for the difference between a provider’s charge and the plan’s allowed amount when permitted. Federal and state surprise-billing protections restrict this in many situations.
Brand-name drug
Simple meaning: A drug sold under a specific brand name.
Insurance meaning: A prescription drug marketed under a proprietary name. Health plans may place brand drugs on different formulary tiers or require utilization management.
Bronze health plan
Simple meaning: A Marketplace metal category that generally has lower premiums and higher member cost sharing than higher metal levels, though actual plans vary.
Insurance meaning: A Marketplace actuarial-value category. Metal levels describe how costs are split on average for a standard population, not quality of care.
Catastrophic health plan
Simple meaning: A lower-premium Marketplace plan for eligible people that has a high deductible and protection against very large costs.
Insurance meaning: A Marketplace plan category available only to people who meet eligibility rules, with high cost sharing and specified federal benefit requirements. Eligibility and subsidy rules can change.
CHIP
Simple meaning: Government health coverage for eligible children in families that meet program rules.
Insurance meaning: The Children’s Health Insurance Program, a federal-state program providing health coverage to eligible children and, in some states, pregnant individuals whose households meet program requirements.
Also called: Children’s Health Insurance Program
Claim denial (health)
Simple meaning: The health plan says it will not pay all or part of a claim.
Insurance meaning: A determination that a service, item, or amount is not payable under the plan, subject to the reason for denial and applicable appeal rights.
COBRA continuation coverage
Simple meaning: A federal right that can let some people temporarily keep employer group health coverage after certain events, if they qualify and pay required amounts.
Insurance meaning: Temporary continuation of qualifying group health plan coverage for eligible employees, former employees, spouses, and dependents after specified qualifying events, subject to federal rules and deadlines.
Also called: COBRA
Coordination of benefits (COB)
Simple meaning: Rules that decide which health plan pays first when a person has more than one plan.
Insurance meaning: A process for determining the order in which multiple health plans pay claims and preventing duplicate payment beyond allowed costs.
Also called: COB
Copayment
Simple meaning: A set dollar amount you pay for a covered health service, like 30 dollars.
Insurance meaning: A fixed amount a member pays for a covered health care service, subject to the plan’s rules. Whether the deductible applies first depends on the plan.
Also called: Copay
Cost sharing
Simple meaning: The part of covered health-care costs you pay yourself.
Insurance meaning: A general term for deductibles, copayments, coinsurance, and similar member charges for covered care. Premiums are generally not cost sharing in commercial health plans.
Cost-sharing reduction (CSR)
Simple meaning: Extra savings that can lower deductibles, copays, and other costs for eligible Marketplace members who choose qualifying Silver plans.
Insurance meaning: A federal benefit that reduces cost sharing for eligible Marketplace enrollees, generally through qualifying Silver plans and certain special populations, subject to current eligibility rules.
Also called: CSR
Drug tier
Simple meaning: A group in a plan’s drug list that affects what you pay.
Insurance meaning: A formulary category used to assign prescription cost sharing. Lower or higher tier numbers do not always mean the same thing across plans.
Dual eligible
Simple meaning: A person who qualifies for both Medicare and Medicaid.
Insurance meaning: An individual enrolled in Medicare who also qualifies for Medicaid coverage or assistance. Benefit coordination depends on eligibility category and state rules.
Employer-sponsored health insurance
Simple meaning: Health coverage offered through a job.
Insurance meaning: Group health coverage sponsored by an employer for eligible employees and often dependents, whether insured or self-funded.
Also called: Job-based health plan
EPO
Simple meaning: A health plan that generally covers nonemergency care only inside its network.
Insurance meaning: An exclusive provider organization plan that generally requires use of network providers for covered nonemergency services, subject to plan rules and law.
Also called: Exclusive provider organization
Essential health benefits (EHBs)
Simple meaning: Ten broad groups of services certain health plans must cover under federal law.
Insurance meaning: Categories of benefits that qualifying individual and small-group plans subject to Affordable Care Act requirements must cover, with specific benchmark details varying by state.
Also called: EHBs
Explanation of benefits (EOB)
Simple meaning: A statement showing what care was billed, what the plan allowed or paid, and what you may owe.
Insurance meaning: A health plan statement explaining how a claim was processed. It is generally not a bill.
Also called: EOB
Flexible spending arrangement (FSA)
Simple meaning: An employer plan account that lets workers use pre-tax money for eligible expenses under plan and tax rules.
Insurance meaning: An employer-sponsored cafeteria-plan arrangement that can reimburse eligible medical expenses up to the elected amount, subject to annual limits and plan rules.
Also called: Health FSA
Formulary
Simple meaning: A health plan’s list of covered prescription drugs.
Insurance meaning: A list of prescription drugs covered by a health plan, often organized into cost-sharing tiers and subject to utilization rules.
Also called: Drug list
Fully insured health plan
Simple meaning: A health plan where an employer or individual pays premium to an insurer that takes the covered claim risk.
Insurance meaning: A health insurance arrangement in which a licensed insurer assumes covered medical claim risk in exchange for premium.
Generic drug
Simple meaning: A drug with the same active ingredient as an approved brand-name drug and approved to meet federal standards.
Insurance meaning: An FDA-approved drug that is therapeutically equivalent to its reference listed drug based on applicable standards. Insurance cost sharing may differ by formulary.
Gold health plan
Simple meaning: A Marketplace metal category that generally has higher premiums and lower member cost sharing than Bronze or Silver plans, though plans vary.
Insurance meaning: A Marketplace actuarial-value category reflecting a higher average share of covered costs paid by the plan than Bronze or Silver.
Grievance
Simple meaning: A complaint about a health plan or service that may not be about payment of a specific claim.
Insurance meaning: A complaint process for plan administration, access, quality, service, or other issues. The exact definition and procedure vary by plan and program.
Group health plan
Simple meaning: Health coverage provided to a group, often workers and their families.
Insurance meaning: An employee welfare benefit plan or insurance arrangement providing medical care to participants and beneficiaries, subject to applicable federal and state law.
Health coinsurance
Simple meaning: The percentage of a covered health bill you pay, such as 20 percent, after any required deductible.
Insurance meaning: The percentage of the allowed cost of a covered service that the member pays under the plan, often after meeting the deductible.
Important: This is different from property-insurance coinsurance.
Health insurance
Simple meaning: Insurance or health coverage that helps pay for covered medical care.
Insurance meaning: A contract or health coverage arrangement that pays some or all covered health care costs in exchange for premium or other eligibility, subject to plan rules.
Health insurance deductible
Simple meaning: The amount you pay for certain covered care before the plan starts paying according to its rules.
Insurance meaning: The amount a member pays for covered services before the plan begins to pay for services subject to the deductible. Some services may be covered before the deductible is met.
Health Insurance Marketplace
Simple meaning: A government-run place where eligible people can shop for individual or family health plans and may qualify for financial help.
Insurance meaning: The federal or state exchange through which eligible consumers can compare and enroll in qualified health plans and apply for premium tax credits or cost-sharing reductions.
Also called: Marketplace; Exchange
Health insurance premium
Simple meaning: The amount you pay to keep health coverage active.
Insurance meaning: The recurring amount charged for health coverage. It is separate from deductibles, copayments, coinsurance, and other out-of-pocket costs.
Health plan
Simple meaning: A plan that provides health coverage.
Insurance meaning: A broad term for insured or self-funded arrangements that provide medical benefits. The exact legal meaning varies by program and law.
Health reimbursement arrangement (HRA)
Simple meaning: An employer-funded arrangement that reimburses eligible medical expenses under plan rules.
Insurance meaning: An employer-funded health reimbursement arrangement that can reimburse qualified medical expenses up to plan limits. Employees generally cannot fund an HRA through salary reduction.
Also called: HRA
Health savings account (HSA)
Simple meaning: A tax-advantaged account eligible people can use for qualified medical expenses.
Insurance meaning: An individually owned tax-favored account available to eligible individuals who meet federal HSA rules, generally including qualifying HDHP coverage and limits on other coverage.
Also called: HSA
High-deductible health plan (HDHP)
Simple meaning: A health plan that meets federal deductible and out-of-pocket rules and may qualify a person to contribute to an HSA if all other requirements are met.
Insurance meaning: For federal HSA purposes, an HDHP must meet annual minimum-deductible and maximum-out-of-pocket limits set by the IRS and satisfy other requirements. The dollar limits change over time.
Also called: HDHP
HMO
Simple meaning: A health plan that usually uses a network and may require a primary doctor and referrals.
Insurance meaning: A health maintenance organization plan that generally emphasizes network care and coordinated services. Emergency and other legally required coverage may follow special rules.
Also called: Health maintenance organization
In-network provider
Simple meaning: A doctor, hospital, or other provider that has a contract with your health plan.
Insurance meaning: A provider or facility participating in a health plan’s network under negotiated terms. Member cost sharing is generally lower in-network, but plan rules vary.
Medicaid
Simple meaning: A government health coverage program for eligible people with low income or other qualifying circumstances.
Insurance meaning: A joint federal-state health program with eligibility and benefits administered under federal standards and state plans. Rules and coverage vary by state.
Medical necessity
Simple meaning: A plan rule asking whether care is medically needed under its standards.
Insurance meaning: A coverage standard used to determine whether a health service meets the plan’s clinical criteria for diagnosis, treatment, or management. Definitions vary by plan and law.
Medicare
Simple meaning: Federal health coverage mainly for people age 65 or older and certain younger people who qualify.
Explore the Ensurance Medicare resource center and 2027 enrollment guides.
Insurance meaning: The federal health insurance program for eligible older adults and certain people with disabilities, end-stage renal disease, or other statutory eligibility.
Medicare Advantage
Simple meaning: A private Medicare-approved plan that provides Part A and Part B benefits and usually includes other benefits.
Explore the Ensurance Medicare 2027 resource center for Open Enrollment dates, Annual Notice of Change guidance and comparison checklists.
Insurance meaning: A Medicare-approved private plan offered as an alternative way to receive Medicare Part A and Part B benefits. Most plans also include Part D drug coverage and may offer additional benefits.
Also called: Medicare Part C; MA
Medicare Part A
Simple meaning: The hospital-insurance part of Medicare.
Insurance meaning: Medicare Hospital Insurance, which helps cover qualifying inpatient hospital care, skilled nursing facility care, hospice, and certain home health services.
Also called: Part A
Medicare Part B
Simple meaning: The medical-insurance part of Medicare.
Insurance meaning: Medicare Medical Insurance, which helps cover physician services, outpatient care, durable medical equipment, preventive services, and other covered services.
Also called: Part B
Medicare Part D
Simple meaning: Medicare prescription-drug coverage.
Review what can change in Medicare Part D coverage for 2027.
Insurance meaning: Medicare coverage for eligible outpatient prescription drugs through private plans approved by Medicare, either stand-alone or included in many Medicare Advantage plans.
Also called: Part D
Medigap
Simple meaning: Private supplemental insurance that helps pay some costs left by Original Medicare.
Compare Medicare Advantage with Original Medicare plus Medigap.
Insurance meaning: Medicare Supplement Insurance sold by private insurers to help cover specified cost sharing in Original Medicare. Standardized plan designs and availability vary by state and eligibility.
Also called: Medicare Supplement Insurance
No Surprises Act
Simple meaning: A federal law that protects people from many unexpected out-of-network medical bills.
Insurance meaning: A federal law establishing protections from certain surprise bills and setting payment-dispute processes, notices, and other requirements. State protections may also apply.
Open enrollment period
Simple meaning: The regular time each year when eligible people can enroll in or change certain health coverage.
Insurance meaning: A scheduled enrollment window for individual Marketplace, employer, Medicare, or other coverage. Dates and rules differ by program.
Also called: OEP
Out-of-network provider
Simple meaning: A provider that does not have a contract with your plan’s network.
Insurance meaning: A provider or facility outside the plan’s contracted network. Coverage and member costs can be different or unavailable, except where law or plan terms require payment.
Out-of-pocket cost
Simple meaning: Money you pay yourself for health care.
Insurance meaning: A health care expense paid by the member, such as deductible, copayment, coinsurance, or noncovered expense. Which costs count toward a plan’s out-of-pocket maximum depends on the plan and law.
Out-of-pocket maximum
Simple meaning: The most you pay in a plan year for covered in-network services that count toward the limit.
Insurance meaning: The plan-year cap on specified cost sharing for covered in-network services, depending on the plan. Premiums and certain other costs do not count.
Also called: Out-of-pocket limit
Platinum health plan
Simple meaning: A Marketplace metal category where the plan generally pays the highest average share of covered costs and premiums are often higher.
Insurance meaning: A Marketplace actuarial-value category with the highest standard average plan-paid share among the four metal categories. Availability varies.
POS plan
Simple meaning: A health plan that mixes features of HMO and PPO coverage.
Insurance meaning: A point-of-service plan that may use primary-care coordination while offering some out-of-network benefits, subject to referral and cost-sharing rules.
Also called: Point-of-service plan
PPO
Simple meaning: A health plan that usually gives more flexibility to use providers inside or outside the network, but out-of-network care can cost more.
Insurance meaning: A preferred provider organization arrangement with negotiated network rates and generally less restrictive referral rules than an HMO, subject to the plan.
Also called: Preferred provider organization
Preexisting condition
Simple meaning: A health problem that existed before new coverage started.
Insurance meaning: A medical condition present before coverage begins. ACA-compliant major medical individual and group health plans generally cannot deny coverage or charge more because of a preexisting condition, but other types of coverage may follow different rules.
Premium tax credit (PTC)
Simple meaning: Financial help that can lower eligible Marketplace health-insurance premiums.
Insurance meaning: A federal tax credit for eligible Marketplace enrollees that can be paid in advance to reduce monthly premiums or claimed through the tax process, subject to current law and household information.
Also called: PTC; Marketplace subsidy
Preventive services
Simple meaning: Certain checkups, screenings, vaccines, and services meant to prevent illness or find problems early.
Insurance meaning: Specified preventive services that many health plans must cover without cost sharing when legal requirements are met, often when received in-network. Coverage rules depend on plan type and current law.
Primary care provider (PCP)
Simple meaning: Your main doctor or health professional for routine care and coordination.
Insurance meaning: A provider designated or selected to provide or coordinate primary care. Some plan types require PCP selection or referrals.
Also called: PCP
Primary payer
Simple meaning: The plan that pays first when more than one plan covers the same person.
Insurance meaning: The insurer or program responsible for paying covered claims before a secondary payer under coordination-of-benefits rules.
Prior authorization
Simple meaning: The plan’s approval that may be required before certain care, drugs, or services.
Insurance meaning: A utilization-management process requiring plan approval before specified services, treatments, or drugs are provided or covered. Approval is not a guarantee of final payment.
Also called: Preauthorization; Prior approval
Provider network
Simple meaning: The doctors, hospitals, pharmacies, and other providers connected to a health plan.
See what to review if a doctor is no longer in your Medicare plan network.
Insurance meaning: The group of health care providers and facilities contracted or otherwise recognized by a plan for network benefits.
Qualified health plan (QHP)
Simple meaning: A health plan certified to be sold through a Health Insurance Marketplace.
Insurance meaning: A health plan certified by a Marketplace as meeting applicable federal and state standards for Marketplace participation.
Also called: QHP
Qualifying life event (QLE)
Simple meaning: A major life change that may open a special health-insurance enrollment window.
Insurance meaning: An event recognized by a health coverage program as creating special enrollment rights, subject to timing, proof, and program rules.
Also called: QLE
Referral (health insurance)
Simple meaning: Permission or direction from one provider to see another provider, often a specialist.
Insurance meaning: A plan process requiring or documenting a referral from a primary care provider or other source before certain services are covered at the expected benefit level.
Secondary payer
Simple meaning: The plan that may pay after the primary plan.
Insurance meaning: A plan or program that considers payment after the primary payer, subject to its own coverage and coordination rules.
Self-funded health plan
Simple meaning: A health plan where the employer or plan pays covered claims from its own funds instead of buying traditional insurance for the full claim risk.
Insurance meaning: An employer health arrangement in which the employer retains claim risk, often using an insurer or third-party administrator for network and claims services. Stop-loss insurance may protect the employer.
Also called: Self-insured health plan
Short-term health insurance
Simple meaning: Temporary medical coverage that is not the same as comprehensive ACA Marketplace coverage.
Insurance meaning: A limited-duration health insurance product subject to federal and state rules that may differ from ACA-compliant individual major medical coverage in benefits, underwriting, and consumer protections.
Important: Rules have changed over time and vary by state, so current terms must be checked before publication or purchase.
Silver health plan
Simple meaning: A Marketplace metal category in the middle of the standard cost-sharing range and the category used for most cost-sharing reductions.
Insurance meaning: A Marketplace actuarial-value category. Eligible consumers generally must enroll in a Silver plan to receive standard cost-sharing reductions.
Special enrollment period
Simple meaning: A time outside regular open enrollment when a qualifying event may let you enroll or change health coverage.
Insurance meaning: An enrollment window triggered by specified circumstances such as loss of qualifying coverage, marriage, birth, move, or another program-defined event. Rules vary by program.
Also called: SEP
Specialist
Simple meaning: A health professional focused on a specific type of care or body system.
Insurance meaning: A provider with specialized training or practice. Referral and network rules for specialists vary by plan.
Specialty drug
Simple meaning: A high-cost or complex medicine that may need special handling, monitoring, or pharmacy rules.
Insurance meaning: An insurer or pharmacy-benefit category for certain expensive, complex, or specialty-distributed medications. There is no single universal definition across plans.
Summary of Benefits and Coverage (SBC)
Simple meaning: A standard summary that helps you compare what a health plan covers and what you may pay.
Insurance meaning: A standardized federal disclosure describing important health plan benefits, cost sharing, limitations, and coverage examples for applicable plans.
Also called: SBC
Surprise medical bill
Simple meaning: An unexpected bill, often from out-of-network care you did not knowingly choose.
Insurance meaning: A bill arising from certain out-of-network services, including some emergency or facility-based care. The federal No Surprises Act and state laws provide protections in many situations.
Third-party administrator (TPA)
Simple meaning: A company that handles plan jobs like claims or administration without necessarily being the company taking the insurance risk.
Insurance meaning: An entity that provides administrative services for insurance or self-funded plans, such as claims processing, enrollment, or network access, subject to contract and regulation.
Also called: TPA
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