Medicare
A federal program that pays for certain health care expenses for people ages 65 or older, younger people with disabilities, and people with End Stage Renal Disease. People under 65 and disabled must be receiving disability benefits from either Social Security or the Railroad Retirement Board for at least 24 months. Enrollment in Medicare is automatic at age 65 for U.S. citizens and legal residents of the United States who have paid Medicare payroll taxes for a minimum of 10 years while employed or who have met other specific guidelines.
Medicare Part A
Covers inpatient hospital expenses, nursing facility expenses (to a certain extent), and other services. If you have worked 40 or more quarters in Medicare-covered employment, you are automatically enrolled in Medicare Part A for free. If you qualify for Medicare, but have fewer than 40 work quarters in Medicare-covered employment, you may still be able to buy into the plan for a low monthly premium.
Medicare Part B
Covers doctor services, outpatient hospital care, and some other services not covered by Part A. This is an optional plan that requires a monthly premium.
Medicare Part C
Allows you to choose from a package of health care plans. Part C is only available for those who already have both Part A and Part B. These plans, which are obtained through a private health insurance company, offer expanded benefits that supplement Part A and Part B.
Medicare Supplement
A health insurance plan sold by private insurance companies to fill the gaps not covered in the Original Medicare Plan. There are different plans for Medicare Supplement. Each plan, A through J, has different benefits, with A being the most basic and J being the most comprehensive.
Medicaid
A program jointly sponsored by the states and federal government to provide health insurance for low-income individuals and families that meet the eligibility requirements. Medicaid policies for eligibility, services, and payment vary among states.
Health Maintenance Organization (HMO)
An organization in which a group of medical care providers offer care for a flat monthly rate with no deductibles. However, only visits to providers within the HMO network are covered by the policy.
Preferred Provider Organization (PPO)
Similar to the HMO, except PPO members are reimbursed for using medical care providers outside of the designated doctors and hospitals at a reduced rate that may include higher deductibles, co-payments, and lower reimbursement percentages. PPO also differs from HMO in that medical bills are paid as they are received, rather than in advance, in the form of a schedule fee.
Point of Service (POS)
Under the POP, you are required to select a primary care physician to monitor your health care. This primary care physician must be chosen from the designated network of medical professionals. If needed, your primary care physician can then refer you to other specialists outside the network. POP members do not receive reimbursement of medical expenses if they go to a medical care provider without referrals made by their primary physicians.
Disability Insurance
An insurance policy designed to replace anywhere from 45 to 60 percent of your gross income on a tax-free basis should a sickness or illness prevent you from earning an income in your occupation. Disability insurance policies differ from company to company.
Health Savings Account (HSA)
Allows enrollee to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. When combined with a low-cost, high deductible health insurance plan, HSA is intended to replace a traditional high-cost health insurance policy.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Allows some workers and their families who lose their employment health benefits continuance to group health benefit for a given amount of time.
Co-payment
Refers to a fixed fee insurance that the subscriber must pay for medical service.
Deductible
The fixed amount not covered by the insurance provider for a medical service. The deductible must be paid out-of-pocket by the insured before the benefits of the policy can apply.
Referral
The recommendation of a medical professional by another professional.
Indemnity Plan
A health insurance plan that reimburses the insured at a certain percentage of the total medical care expenses incurred after a deductible has been met.
Primary Care Physician
A general practitioner who manages a patient's health over time and makes referrals to other specialists when necessary.
Specialist
A medical professional who specializes in a specific branch of medicine.
Preventative Care
Refers to medical measures taken to prevent illnesses and early treatment upon the onset of symptoms.
Health Spending Account
An account provided by the employer for employees to pay eligible medical expenses not covered by the regular health insurance plan.
Health Insurance Portability and Accountability Act (HIPAA)
A U.S. regulation that addresses the obligations of healthcare providers and health plans to protect personal health information.
EPO
A healthcare benefit arrangement similar to the PPO in structure, administration, and operation. The major difference between PPO and EPO is that the latter does not reimburse for medical expenses incurred outside of the designated network, except for cases of emergency.
AARP
An association that seeks to promote the welfare and advancement of retired senior citizens.
