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Today, with health care costs rising dramatically each year, even relatively simple medical procedures can run into the thousands of dollars. However, it is not just the cost of medical care that is rising. The variety of care available is also increasing.

In order to reduce the risk of unexpected health care costs, private health insurance companies now offer an array of health insurance programs and plans, that vary widely in terms of coverage, costs and benefits

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What type of  Health Insurance do you need?

To get the most from a health care plans,  it is important to understand the  terms and phrases used by those  providing health care coverage- the insurance  companies and your physician.

Admitting Privileges: The ability of a doctor  to admit a patient to a particular hospital.

Advocacy: Any activity done to help a person or  group get something the person or group wants or needs.

Assignment of Benefits: When you assign  benefits, you sign a document allowing your hospital or  doctor to collect your health insurance benefits directly  from your health carrier. Otherwise, you pay for the  treatment and then the company reimburses you.

Association: A group of individuals or  employers or combination thereof.

Capitation: Capitation represents a set dollar  limit that your health maintanence organization (HMO)  pays to your primary care physician for providing medical  treatment to you and your dependents. This fee is usually  paid to the physician on a monthly basis. The physician  gets no more nor no less than this set fee no matter how  much you use his or her services.

Case Management: Case management is a system  that insurance companies and HMO's use to ensure that  individuals receive appropriate, timely, and reasonable  health care services.

Claim: A request by an individual ( or his or  her health care provider) to an individual's insurance  company for the insurance company to pay for services  obtained from a health care professional.

Co-insurance: Co-insurance refers to money that  an individual is required to pay for services, after a  deductible has been paid. In some health plans,  coinsurance is called a "copayment."  Co-insurance is often specified by a percentage. For  example, the employee pays 20% toward the charges for a  service and the employer or insurance company pays 80%.

Copayment: Co-payment is a predetermined fee  that an individual pays for health care services, in  addition to what the insurance covers. For example, some  HMOs require a $10 "co-payment" for each office  visit, regardless of the type or level of services  provided during the visit. Co-payments are not usually  specified by percentages.

Deductible: The amount an individual must pay  for health care services before insurance covers any of  the costs. Deductibles are most frequently charged on an  annual basis rather than on a per incident basis.

Denial of a Claim: Refusal by an insurance  company to pay a claim submitted to them on behalf of an  insured individual by a health care provider.

Employee Assistance Programs (EAPs): Mental  health counseling services that are sometimes offered by  insurance companies or employers. Typically, individuals  or employers do not have to directly pay for services  provided through an employee assistance program.

Exclusions and Limitations: Medical services  that are either not covered or limited in benefit by an  individual's insurance policy.

Guaranteed Issue: An insurance company or HMO  will issue coverage to an applicant regardless of prior  medical history. In California, small employers (defined  as 3 to 50 employees) cannot be refused coverage for  their employees regardless of the medical history of one  or more employees.

Health Maintenance Organizations (HMOs): Health  Maintenance Organizations represent "pre-paid"  or "capitated" health care plans in which  individuals pay small fees or copayments for specified  health care services over and above the monthly premiums  paid to be a member of the HMO. Services are provided by  physicians and allied health care personnel who are  employed by, or under contract with the HMO. HMOs vary in  design. Depending on the type of HMO, services may be  provided in a central facility, or in an individual  physicians office. HMO's are available on both an  individual and employer group basis.

Indemnity Health Plan: Indemnity health  insurance plans are also called  "fee-for-service." These are the types of plans  that primarily existed before the rise of HMOs, IPAs and  PPOs. With indemnity plans, the individual pays a  predetermined percentage of the cost of health care  services, and the insurance company pays the additional  percentage ultimately adding up to 100% of charges. For  example, an individual might pay 20% for services and the  insurance company pays 80%. The fees for services are  defined by the providers and vary from physician to  physician. Indemnity health plans offer individuals the  freedom to choose any physician or hospital.

Independent Practice Associations: A group of  independent practicing physicians who band together for  the purpose of contracting their services to HMOs, PPOs  and insurance companies.

Long Term Care Policy: Insurance policies that  cover the costs of providing nursing care, home health  care services and custodial care for the aged and  infirmed.

Managed Care: The system that HMOs, PPOs and  indemnity plan uses to provide quality health care while  controlling the costs of medical services that  individuals receive.

Maximum Dollar Limit: The maximum amount of  money that an insurance company will pay for claims  within a specific period of time. For instance, most PPO  types of programs have an overall lifetime maximum  expressed in millions of dollars (usually a minimum of  $1M). Maximum dollar limits vary greatly. They may be  based on the type of illness or expressed in a period of  time.

Medically Necessary: Many insurance policies  will pay only for treatment that is deemed  "medically necessary" to restore a persons  health. For instance, many policies will not cover  routine physical exams or plastic surgery for cosmetic  purposes.

Medigap Insurance Policies: Medigap insurance  is offered by private insurance companies, not the  government. It is not the same as Medicare or Medicaid.  These policies are designed to pay for some of the costs  that Medicare does not cover.

Open-ended HMOs: HMOs which allow enrolled  individuals to use out-of-plan providers and still  receive partial or full coverage and payment for the  professional's services under a traditional indemnity  plan. These type of plans are also known as Point of  Service Programs.

Out-Of-Plan: This phrase usually refers to  physicians, hospitals or other health care providers who  do not contract with the insurance plan (usually HMOs and  PPOs). Depending upon the insurance plan, expenses  incurred by services provided by out-of-plan health  professionals may not be covered, or covered only in part  by an individual's insurance company.

Out-Of-Pocket Maximum: A predetermined limited  amount of money that an individual must pay out of  pocket, before an insurance company will pay 100% for an  individual's health care expenses.

Pre-Admission Certification: Also called  pre-certification review, or pre-admission review. This  is approval by a case manager or insurance company  representative for a person to be admitted to a hospital  or in-patient facility in advance of their admission.  Usually, the patient's physician requests that this  process be completed. The goal of pre-admission  certification is to ensure that individuals are not  hospitalized for unnecessary surgical procedures or  services that are not medically necessary.

Pre-Existing Medical Conditions: Any illness or  health problem that existed prior to an individual  obtaining medical coverage. Group health plans will cover  pre-existing conditions after you have been covered for  at least six months; individual plans after 12 months.

Preferred Provider Organizations (PPOs): This  is a group of health care providers who have agreed by  contract to furnish medical services to members of a  health plan at discounted rates.

Primary Care Provider (PCP): A health care  professional who is responsible for monitoring an  individual's overall health care needs. Typically, a PCP  serves as a "gatekeeper" for an individual's  medical care, referring the individual to specialists and  admitting them to hospitals when needed.

Reasonable and Customary Charges: The charges  that a carrier determines normal for a particular medical  procedure in a specific geographic area. If charges are  higher than what the carrier considers normal, the  carrier will not pay the full amount charges and the  balance is the responsibility of the insured.

Waiting Period: A period of time when you are  not covered by insurance for a particular medical  problem.

Waiver: A rider or amendment to a policy that  restricts benefits by excluding certain medical  conditions from coverage.