Glossary

Allowable amount – The amount that a network provider has agreed to accept as payment in full for covered services.

Coinsurance – The percentage of the cost of covered services that you pay.  So if a service costs $100 and your coinsurance amount is 20%, you pay $20 and your health plan pays $80.

Copayment (copay) – The fixed amount that you pay for certain covered services.  So if your office visit copay is $20, you’ll pay that each time you see your doctor.

Copayment maximum – The dollar limit on the total amount of copayments and coinsurance you have to pay in a calendar year for most covered services.

Deductible – The amount you must pay each year for covered services before your plan begins paying its share of the cost of your covered care.  So if you have a $500 deductible, your health plan starts to pay for care after you pay for $500 of your covered treatment costs.  (Note: For some covered treatments, your plan pays for the treatment before you meet your deductible.).  With most plans deductibles are calendar year which means they start over every January 1^st.

Formulary – A preferred list of generic and brand-name drugs.

Health Savings Account (HSA) – A tax-advantaged personal savings or investment account intended for payment of your medical expenses.

Out-of-pocket maximum – The dollar limit on the total amount you have to pay in a calendar year, including your deductible, copayments and coinsurance, for most covered services.

Out-of-pocket costs – meaning the costs you pay – may include your deductible, copayment and coinsurance.  Your cumulative costs for each calendar year are capped at either an annual copayment maximum or annual out-of –pocket maximum.

Personal Physician – The network physician who serves as an HMO member’s designated primary healthcare provider.

Preferred provider – A provider who is part of a carriers physician network (also called a network provider).