GLOSSARY: Basic Insurance Terms for Understanding Your Plan

ACA (AFFORDABLE CARE ACT):

The Patient Protection and Affordable Care Act, referred to as the Affordable Care Act or “ACA” for short, is the comprehensive health care reform law enacted in March 2010. Also frequently referred to as “Obamacare.” 

Details of protections under the ACA:
About the ACA | HHS.gov
Obamacare? Marketplace? The Exchange?: A Comprehensive Guide free ebook! 

Quick start page to learn the history and current accomplishments of the ACA:
Part 1: ACA & The Marketplace: Background and Basics (a subsection of the OME Comprehensive Guide)

ADVANCE PREMIUM TAX CREDIT (APTC):

A tax credit you can take in advance to lower your monthly health insurance payment (or “premium”).

The Premium Tax Credit – The basics | Internal Revenue Service

3.4 Advanced Premium Tax Credit (APTC): What It Is & How to Reconcile (a subsection of Part 3 of the Obamacare? Marketplace? The Exchange?: A Comprehensive Guide)

ADVOCATE:

A person who gives you support or protects your rights. If you’re working with an agent/broker, they can act as your advocate with the insurance company if needed (when you have issues with a claim or are filing an appeal, etc.)

Understanding the Role of a Health Insurance Advocate

AGENT/BROKER:

A trained insurance professional who can help you enroll in a health insurance plan. Agents may work for a single health insurance company; brokers may represent several companies. You won’t pay anything additional if you enroll with an agent or broker.

Get local, Marketplace-certified help & find or request contact by an agent/broker from HealthCare.gov’s Find Local Help and Help On Demand features:

Get help applying & more | HealthCare.gov

AGI (ADJUSTED GROSS INCOME):

Your total (or “gross”) income for the tax year, minus certain adjustments you’re allowed to take. Adjustments include deductions for conventional IRA contributions, student loan interest, and more. Adjusted gross income appears on IRS Form 1040, line 11.

• To report expected income on your Marketplace health insurance application, you can start with your most recent year's adjusted gross income and update it based on income and household changes you expect for the coverage year.
• The Marketplace uses a different figure, called modified adjusted gross income (MAGI), to determine eligibility for savings. MAGI is not a line on your tax return.

Most recent official IRS rules on using income adjustments to determine AGI:
Publication 17 (2024), Your Federal Income Tax | Internal Revenue Service

BALANCE BILLING:

Balance billing occurs when providers bill a patient for the difference between the amount they charge and the amount that the patient's insurance approves. This usually happens when you see a provider or use a service outside your health plan’s network. In the event that you have no other option than going out of network, check with your state’s department of insurance to find out what (if any) protections they offer consumers from “surprise billing.”

What is balance billing? | healthinsurance.org

BRONZE HEALTH PLAN:

One of 4 plan categories (also known as “metal levels”) in the Health Insurance Marketplace®. Bronze plans usually have the lowest monthly premiums, but the highest costs when you get care. They can be a good choice if you usually use few medical services and mostly want protection from very high costs if you get seriously sick or injured.

Health plan categories: Bronze, Silver, Gold & Platinum | HealthCare.gov

CLAIM:

A request for payment that you or your health care provider submits to your health insurer when you get items or services you think are covered.

Health Care Bills: Filing Health Insurance Claims

CMS or CMS.GOV:

Centers for Medicare & Medicaid Services. The agency that runs Medicare, Medicaid, and CHIP, and the FFM (federally facilitated Marketplace). Excellent source for information and answers to questions about everything about the Marketplace!

Official site of the Centers for Medicare & Medicaid Services:
CMS.gov

COINSURANCE:

The percentage of costs of a covered health care service you pay (20%, for example) AFTER you've paid your deductible.

Reference on cost sharing (deductible, copay, coinsurance, out-of-pocket max): 
Coinsurance vs. Copays: What's the Difference?

COPAYMENT (COPAY):

A fixed amount ($20, for example) you pay for a covered health care service after you've paid your deductible.

Reference on cost sharing (deductible, copay, coinsurance, out-of-pocket max): 
Coinsurance vs. Copays: What's the Difference?

COST SHARING:

The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but it doesn't include premiums, balance billing amounts for non-network providers, or the cost of non-covered services.

Reference on cost sharing (deductible, copay, coinsurance, out-of-pocket max): 
Coinsurance vs. Copays: What's the Difference?

COST SHARING REDUCTION (CSR):

A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Health Insurance Marketplace®, cost-sharing reductions are often called “extra savings.” If you qualify, you must enroll in a plan in the Silver category to get the extra savings.

Details about CSRs: 
Cost-sharing reductions | HealthCare.gov

DEDUCTIBLE:

The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you pay your deductible, you usually pay only a copayment or coinsurance for covered services. Your insurance company pays the rest.

Reference on cost sharing (deductible, copay, coinsurance, out-of-pocket max): 
Coinsurance vs. Copays: What's the Difference?

DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS):

The federal agency that oversees CMS, which administers programs for protecting the health of all Americans, including Medicare, the Marketplace, Medicaid, and the Children’s Health Insurance Program (CHIP).

Official site of the Department of Health & Human Services:
hhs.gov

ESSENTIAL HEALTH BENEFITS (EHBs):

A set of 10 categories of services health insurance plans must cover under the Affordable Care Act. These include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more. Some plans cover more services.

Find out what Marketplace health insurance plans cover | HealthCare.gov

EXCHANGE:

The “exchange” is short for the Federally-facilitated Exchange. It’s also another term for the Health Insurance Marketplace®, a service that helps individuals, families, and small businesses shop for and enroll in affordable medical insurance. The Marketplace is accessible through websites, call centers, and in-person assistance.

Exchange - Glossary | HealthCare.gov

EXCLUSIVE PROVIDER ORGANIZATION (EPO) PLAN:

A managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).

Health insurance plan & network types: HMOs, PPOs, and more | HealthCare.gov

FEDERAL POVERTY LEVEL (FPL):

A measure of income issued every year by the Department of Health and Human Services (HHS). Federal poverty levels (FPLs) are used to determine your eligibility for certain programs and benefits, including savings on Marketplace health insurance, and Medicaid and CHIP coverage.

2025 FPL Guidelines: Poverty Guidelines | ASPE

FORMULARY:

A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits (also called a drug list). You can usually find a link to the formulary for your plan through your online member access on your insurance company’s website. Formularies will vary from plan to plan so it’s highly recommended that you view them while comparing plans to make sure your meds will be covered by the plan you choose.

In-depth information about formularies: https://www.goodrx.com/insurance/health-insurance/medication-formulary

GENERIC DRUGS:

A prescription drug that has the same active-ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs. The Food and Drug Administration (FDA) rates these drugs to be as safe and effective as brand-name drugs.

Generic Drugs: Questions & Answers | FDA

GOLD HEALTH PLAN:

One of 4 health plan categories (or “metal levels”) in the Health Insurance Marketplace®. Gold plans usually have higher monthly premiums but lower costs when you get care. Gold may be a good choice if you use a lot of medical services or would rather pay more up front and know that you’ll pay less when you get care.

Health plan categories: Bronze, Silver, Gold & Platinum | HealthCare.gov

HEALTH INSURANCE MARKETPLACE®:

A service that helps people shop for and enroll in health insurance. The federal government operates the Health Insurance Marketplace®, available at HealthCare.gov, for most states. Some states run their own Marketplaces. The Health Insurance Marketplace® (also known as the “Marketplace” or “exchange” or “Obamacare”) provides health plan shopping and enrollment services through websites, call centers, and in-person help.

What is the Health Insurance Marketplace? | HHS.gov

HEALTH MAINTENANCE ORGANIZATION (HMO):

A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.

Health insurance plan & network types: HMOs, PPOs, and more | HealthCare.gov

HEALTH REIMBURSEMENT ARRANGEMENT (HRA):

A type of health plan that allows employers to reimburse employees for medical expenses (like premiums, deductibles, and copayments). HRAs are an alternative to traditional group health plans. 
Usually, your employer will send you a letter at least 90 days before the start of the HRA’s 12-month plan year. If you become eligible during the HRA plan year or during the 90 days before the plan year starts (example: new employees), you’ll get the letter no later than the first day your individual HRA coverage can start. The letter will tell you:

• If the individual coverage HRA is offered to household members
• How much your employer will reimburse for medical expenses
• The dates the individual coverage HRA starts and ends

Health Reimbursement Arrangements (HRAs): 3 things to know | HealthCare.gov
Individual coverage HRAs | HealthCare.gov
Health Reimbursement Arrangements | CMS

HEALTH SAVINGS ACCOUNT (HSA):

A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your out-of-pocket health care costs. HSA funds generally may not be used to pay premiums.

CMS Fact Sheet:  
What's a Health Savings Account? | CMS

HOUSEHOLD:

The Marketplace generally considers your “household” to be you, your spouse if you’re married, and your tax dependents. Your eligibility for savings is generally based on the income of all household members, even those who don’t need insurance.

For help determining who should be included in your household on your Marketplace application: 
Who’s included in your household | HealthCare.gov

INDIVIDUAL HEALTH INSURANCE POLICY:

Policies for people who aren't connected to job-based coverage. Individual health insurance policies are regulated under state law.

What is individual health insurance? | healthinsurance.org

JOB-BASED HEALTH PLAN:

Coverage that is offered to an employee (and often his or her family) by an employer.

See Your Options If You Have Job-Based Health Insurance | HealthCare.gov

MARKETPLACE:

Shorthand for the “Health Insurance Marketplace®,” a shopping and enrollment service for medical insurance created by the Affordable Care Act in 2010. In most states, the federal government runs the Marketplace (sometimes known as the "exchange") for individuals and families. On the web, it's found at HealthCare.gov. Some states run their own Marketplaces at different websites.

What is the Health Insurance Marketplace? | HHS.gov

MEDICAID:

Insurance program that provides free or low-cost health coverage to some low-income people, families and children, pregnant women, the elderly, and people with disabilities. Many states have expanded their Medicaid programs to cover all people below certain income levels.

What’s the difference between Medicare and Medicaid? | HHS.gov

MEDICARE:

Medicare is federal health insurance for people 65 or older, and some people under 65 with certain disabilities or conditions. A federal agency called the Centers for Medicare & Medicaid Services (CMS) runs Medicare. Because it’s a federal program, Medicare has set standards for costs and coverage.

What’s the difference between Medicare and Medicaid? | HHS.gov

METAL LEVELS:

There are 4 plan categories (also known as “metal levels”) in the Health Insurance Marketplace®: Bronze, Silver, Gold, and Platinum. These categories show how you and your plan share costs. Plan categories have nothing to do with quality of care.

Health plan categories: Bronze, Silver, Gold & Platinum | HealthCare.gov

MODIFIED ADJUSTED GROSS INCOME (MAGI):

The figure used to determine eligibility for premium tax credits and other savings for Marketplace health insurance plans and for Medicaid and the Children's Health Insurance Program (CHIP).

MAGI is adjusted gross income (AGI) plus these, if any:

• Untaxed foreign income
• Non-taxable Social Security benefits
• Tax-exempt interest.

For many people, MAGI is identical or very close to adjusted gross income.

• MAGI doesn’t include Supplemental Security Income (SSI).
• MAGI doesn't appear as a line on your tax return.

What is MAGI or modified adjusted gross income? | healthinsurance.org

NETWORK:

The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services.

Understanding "In-Network" and "Out-of-Network" Providers | Renown Health

NON-PREFERRED PROVIDER:

A provider who doesn’t have a contract with your health insurer or plan to provide services to you. You’ll pay more to see a non-preferred provider. Check your policy to see if you can go to all providers who have contracted with your health insurance or plan, or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers.

More about non-preferred providers: https://www.cms.gov/files/document/nosurpriseactfactsheet-health-insurance-terms-you-should-know508c.pdf

OBAMACARE:

Another name for the ACA (Affordable Care Act), the health care reform law enacted in 2010. Often used to refer to the affordable health plans offered by the Health Insurance Marketplace®, and even the Marketplace itself.

Affordable Care Act - Wikipedia

OPEN ENROLLMENT PERIOD (OEP):

The annual period (November 1 – January 15) when people can enroll in a Marketplace health insurance plan.
Outside Open Enrollment, you may still be able to enroll in Marketplace coverage if you have certain life events, like:

• getting married
• having/adopting a child
• losing other health coverage
• based on your estimated household income.

Job-based plans may have different Open Enrollment Periods. Check with your employer.

You can apply and enroll in Medicaid or the Children's Health Insurance Program (CHIP) any time of year.

When can you get health insurance? | HealthCare.gov

OUT-OF-POCKET COSTS:

Your expenses for medical care that aren't reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren't covered. NOTE: Monthly premiums are NOT included in out-of-pocket costs that contribute to out-of-pocket max.

What are Out-of-Pocket Healthcare Costs? Definition and Guide

OUT-OF-POCKET MAXIMUM:

The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.

The out-of-pocket limit doesn't include:

• Your monthly premiums
• Anything you spend for services your plan doesn't cover
• Out-of-network care and services
• Costs above the allowed amount for a service that a provider may charge

What are Out-of-Pocket Healthcare Costs? Definition and Guide

PLATINUM HEALTH PLAN:

One of 4 categories (or “metal levels”) of Health Insurance Marketplace® plans. Platinum plans usually have the highest monthly premiums of any plan category but pay the most when you get medical care. They may work well if you expect to use a great deal of health care and would rather pay a higher premium and know nearly all other costs are covered.

Health plan categories: Bronze, Silver, Gold & Platinum | HealthCare.gov

POINT OF SERVICE (POS) PLANS:

A type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans also require you to get a referral from your primary care doctor in order to see a specialist.

Point-of-Service (POS) Plan: Definition, Pros & Cons, Vs. HMO

PRE-EXISTING CONDITION:

A health problem, like asthma, diabetes, or cancer, you had before the date that new health coverage starts. Thanks to the Affordable Care Act (ACA), insurance companies can't refuse to cover treatment for your pre-existing condition or charge you more.

Pre-Existing Conditions | HHS.gov

PREFERRED PROVIDER:

A provider who has a contract with your health insurer or insurance plan to provide services to you at a discount.

Preferred provider - Glossary | HealthCare.gov

PREFERRED PROVIDER ORGANIZATION (PPO):

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.

Preferred Provider Organization (PPO): Definition and Benefits

PREMIUM:

The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit. When shopping for a plan, keep in mind that the plan with the lowest monthly premium may not be the best match for you. If you need much health care, a plan with a slightly higher premium but a lower deductible may save you a lot of money.

Your total costs for health care: Premium, deductible, and out-of-pocket costs | HealthCare.gov

PREMIUM TAX CREDIT (PTC):

A tax credit you can use to lower your monthly insurance payment (premium) when you enroll in a plan through the Health Insurance Marketplace®. Your tax credit is based on the income estimate and household information you provide on your Marketplace application.

The Premium Tax Credit – The basics | Internal Revenue Service

PREVENTIVE SERVICES:

Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. Preventive services are usually covered at 100%, even before you reach your deductible. Check with your insurance carrier for details and to find out what services are included.

Preventive health services | HealthCare.gov

PRIMARY CARE:

Health services that cover a range of prevention, wellness, and treatment for common illnesses. Primary care providers include doctors, nurses, nurse practitioners, and physician assistants. They often maintain long-term relationships with you and advise and treat you on a range of health related issues. They may also coordinate your care with specialists.

Primary Care | CMS

PRIMARY CARE PROVIDER (PCP):

A physician (M.D. – Medical Doctor or D.O. – Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist or physician assistant, as allowed under state law, who provides, coordinates or helps a patient access a range of health care services.

What is a Primary Care Provider (PCP)?

QUALIFIED HEALTH PLAN (QHP):

An insurance plan that’s certified by the Health Insurance Marketplace®, provides essential health benefits (EHBs), follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements under the Affordable Care Act. All QHPs meet the Affordable Care Act requirement for having health coverage, known as “minimum essential coverage.”

What Is a Qualified Health Plan (QHP)?

QUALIFYING LIFE EVENT (QLE):

A change in your situation — like getting married, having a baby, or losing health coverage — that can make you eligible for a Special Enrollment Period (SEP), allowing you to enroll in health insurance outside the yearly Open Enrollment Period (OEP).  

Full list of QLEs: 
Getting health coverage outside Open Enrollment | HealthCare.gov

RECONCILE:

Comparing two figures to determine if you used the right amount of premium tax credit during the year. To reconcile, you compare two amounts: the premium tax credit you used in advance during the year (based on estimated annual income and household size); and the amount of tax credit you qualify for based on your actual income and household size. You’ll use your 1095-A form (mailed to you by February each year) to fill out the IRS Form 8962 to reconcile your APTC.

How to reconcile your premium tax credit | HealthCare.gov

REFERRAL:

A written order from your primary care doctor for you to see a specialist or get certain medical services. In many Health Maintenance Organizations (HMOs), you need to get a referral before you can get medical care from anyone except your primary care provider (PCP). If you don’t get a referral first, the plan may not pay for the services.

How Referrals Work With Your Health Insurance

SERVICE AREA:

A geographic area where a health insurance plan accepts members if it limits membership based on where people live. For plans that limit which doctors and hospitals you may use, it's also generally the area where you can get routine (non-emergency) services. The plan may end your coverage if you move out of the plan's service area.

What is a Service Area? - Definition from Insuranceopedia

SHOP:

The Small Business Health Options Program (SHOP) helps small business owners provide medical and/or dental insurance to their employees. Some smaller employers qualify for tax credits if they enroll in SHOP insurance.

SHOP Coverage for Employers | HealthCare.gov

SILVER HEALTH PLAN:

One of 4 categories of Health Insurance Marketplace® plans (sometimes called “metal levels”). Silver plans fall about in the middle: You pay moderate monthly premiums and moderate costs when you need care. Important: If you qualify for cost sharing reductions (CSRs), or “extra savings,” you can save a lot of money on deductibles, copayments, and coinsurance when you get care — but only if you pick a Silver plan. Silver plans are the most common choice of Marketplace shoppers.

Understanding Metal Levels and Marketplace Insurance – HealthSherpa Blog
Health plan categories: Bronze, Silver, Gold & Platinum | HealthCare.gov

SPECIAL ENROLLMENT PERIOD (SEP):

A time outside the yearly Open Enrollment Period when you can sign up for health insurance. 
You qualify for a Special Enrollment Period if you’ve experienced certain life events including:

• losing health coverage,
• moving,
• getting married,
• having a baby, or
• adopting a child, or if
• your household income is below a certain amount.

Depending on your Special Enrollment Period (SEP) type, you may have 60 days before or 60 days following the event to enroll in a plan.

• You can enroll in Medicaid or the Children’s Health Insurance Program (CHIP) any time.
• Job-based plans must provide a Special Enrollment Period of at least 30 days.

More details about events that qualify for a SEP:
Getting health coverage outside Open Enrollment | HealthCare.gov

SPECIALIST:

A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions. A non-physician specialist is a provider who has more training in a specific area of health care. Some plans require a referral from the insured’s primary care provider (PCP) for visits to a specialist to be covered.

Primary Care Provider (PCP) vs. Specialist | FAQ | Handy Definitions | Oscar

Types of specialists defined:
Different Types of Doctors & Medical Specialists Explained

SUMMARY OF BENEFITS AND COVERAGE (SBC):

An easy-to-read summary that lets you make apples-to-apples comparisons of costs and coverage between health plans. You can compare options based on price, benefits, and other features that may be important to you. You'll get the "Summary of Benefits and Coverage" (SBC) when you shop for coverage on your own or through your job, renew or change coverage, or request an SBC from the health insurance company.

Summary of Benefits and Coverage | HealthCare.gov

TAX HOUSEHOLD:

The taxpayer(s) and any individuals who are claimed as dependents on one federal income tax return. A tax household may include a spouse and/or dependents.

Tax household - Glossary | HealthCare.gov
Who’s included in your household | HealthCare.gov
https://www.healthreformbeyondthebasics.org/key-facts-determining-household-size-for-medicaid-and-chip/

TIER RE: PRESCRIPTION DRUGS:

A specific list of drugs. Your plan may have several tiers, and your copayment amount depends on which tier your drug is listed. Plans can choose their own tiers, so members should refer to their benefit booklet or contact the plan for more information.

How Does a Prescription Drug Tier List (Formulary) Work? | MetLife

TOTAL COST ESTIMATE (FOR HEALTH COVERAGE):

The total amount you may have to pay for health plan coverage, which is estimated before you actually have the coverage and have health expenses under the coverage.
Generally, your total cost is your premium + deductible + out-of-pocket costs + any copayments/coinsurance. When you preview plans at HealthCare.gov, you’ll see an estimate of your total costs, but your actual expenses will likely vary.

Your total costs for health care: Premium, deductible, and out-of-pocket costs | HealthCare.gov

UCR (USUAL, CUSTOMARY, AND REASONABLE):

The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount is sometimes used to determine the allowed amount.

Usual, Customary and Reasonable Fees: What They Are, How They Work

URGENT CARE:

Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe it requires emergency room care.

Urgent care - Glossary | HealthCare.gov

WELLNESS PROGRAM:

A program intended to improve and promote health and fitness that's usually offered through the work place, although insurance plans can offer them directly to their enrollees. The program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships, and other incentives to participate. Some examples of wellness programs include programs to help you stop smoking, diabetes management programs, weight loss programs, and preventative health screenings.

Wellness Program: Meaning, Criticisms, Example