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Glossary of Health Care-Related Terms
Catastrophic health costs
The costs of treating a severe or lengthy illness, injury or disability, that can total thousands of dollars per week and can wipe out the financial resources of many people or families if they don't have catastrophic health insurance coverage. Catastrophic coverage generally will not cover the everyday doctors visits or prescriptions - it will typically cover expenses for surgery, hospital stays including intensive care, lab tests, x-rays and other diagnostic tests. You can think of catastrophic health insurance as similar to auto insurance - it's not going to cover a small scratch but will usually pay in case of a major problem after you pay a deductible. Catastrophic health coverage is generally fairly affordable for many people.1
Chronic disease
A disease that is long lasting and is generally thought of as permanent. Chronic disease often leaves residual disability, and often requires special training of the patient for rehabilitation, or may be expected to require a long period of supervision, observation, or care.1
Consumer driven health care
This term applies to a movement in the last several years to put more decision-making about health care expenditures in the hands of health consumers themselves, rather than being made by insurers and employers. The term is most commonly used to describe the combination of a high-deductible health insurance plan with a tax-preferred savings account such as Health Savings Accounts (HSAs) or Health Reimbursement Accounts (HRAs) to pay for health care expenses.2
Copayments
1. A fixed amount of money paid by a health plan enrollee at the time that a medical service is provided to them. For example, the enrollee may pay a $10 "copay" at every physician office visit, and $5 for each drug prescription filled. The health plan pays the remainder of the charge directly to the physician, hospital or other health care provider. This is a method of cost-sharing between the enrollee and the plan, and serves as an incentive for the enrollee to use health care resources wisely. In general, lower premiums for health insurance plans are associated with higher copayments.1
2. A form of cost sharing whereby the insured person pays a specified amount for each health care product or service obtained (e.g. $10 per prescription drug).10
Deductible
1. The amount of money that has to be paid for health or medical services by an insured person before the insurance company starts to pay for all or part of the remaining cost of services. Deductibles may be either fixed-dollar amounts or the value of specified services (such as two days of hospital care or one physician visit.) Deductibles are usually tied to some specific period over which they must be incurred, e.g. $100 per calendar year, benefit period, or spell of illness.1
2. A form of cost sharing in which a set amount must be paid by the insured before any payment of benefits occurs.10
Electronic medical record/Electronic patient chart
A medical record in digital format. Using electronic medical records or charts makes it easier for physicians, nurses and others to access all of the information about a patient, hopefully resulting in greater efficiency and more effective delivery of care.
FEHBP (Federal Employees Health Benefit Program)
A voluntary health insurance subsidy program administered by the Office of Personnel Management for civilian employees (including retirees and dependents) of the federal government. Enrollees select from a number of approved plans, the costs of which are primarily borne by the government.1
Flexible spending account
Accounts offered and administered by employers that provide a way for employees to set aside, out of their paycheck, pre-tax dollars for the employee's share of insurance premiums or medical expenses not covered by the employee's health plan. Typically, benefits or cash must be used within the given benefit year or the employee loses the money.
Gross Domestic Product (GDP)
A combination of fixed assets, commodities and services produced in a country during one year. The GDP is often used as a measure of total economic activity of a country, and health care costs are often measured as a percentage of a country's GDP. In the U.S., in 2006, it is estimated that health care expenditures represented almost 17% of the total GDP, a far greater percentage than any other industrialized country.
Health related behaviors
Behaviors of individuals that are known to have a direct or indirect impact, good or bad, on overall health. Examples often used are smoking, level of exercise, diet (amount and types of foods), engaging in risky sexual activities, etc.
Health Savings Accounts (HSAs)
1. A type of medical savings account that allows consumers to save for medical expenses on a tax free basis. HSAs are being touted as part of a move towards consumer-directed health care that in theory gives health consumers greater control over spending for health care. Some health policy analysts believe that greater use of HSAs will encourage consumers to be more responsible about spending for health care, resulting in savings in health expenditures.1
2. An account that allows individuals to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax free basis.11
Healthcare Information Technology (HIT)
Electronic systems and tools that allow the comprehensive management of medical information and secures the exchange between health care consumers and providers. Examples of HIT include electronic medical records, computerized physician order entry systems, and automated medication dispensing systems.3
High deductible health plan
A High Deductible Health Plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. It is sometimes referred to as a catastrophic health insurance plan. Plans that are eligible for use in conjunction with health savings account (HSA) have deductibles over $1000 for individuals and $2000 for families.
HMO
A type of managed care organization (MCO) that provides a form of health insurance coverage in the United States that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. Unlike traditional indemnity insurance, care provided in an HMO generally follows a set of care guidelines provided through the HMO's network of providers. Under this model, providers contract with an HMO to receive more patients and in return usually agree to provide services at a discount. This arrangement allows the HMO to charge a lower monthly premium. HMOs are generally a more cost effective option than traditional insurance for individuals who want to save money in return for having fewer choices and options concerning the health care providers they can utilize.4
Mandatory health care coverage (Mandate)
A mandate which would require everyone to have health insurance. Some states such as Massachusetts have recently passed legislation that requires individuals to have health insurance coverage, or requires employers to either offer coverage to their employers or pay a penalty for "opting out" of the health insurance mandate.
Medicaid
Medicaid is the United States health program for individuals and families with low incomes and resources. It is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Medicaid is the largest source of funding for medical and health-related services for people with limited income. It is estimated that over 43 million Americans were enrolled in 2004 (19.7 million of them children) at a total cost around $295 billion.1
Medical Borrower’s Fairness Act
An act that would provide immediate relief to families forced to borrow money to pay for medical expenses.
Medical errors
An error or omission in the medical care provided to a patient. Medical errors can occur in diagnosis, treatment, preventative monitoring, or in the failure of a piece of medical equipment or another component of the medical system. One of the most common types of medical errors are medication errors, which can be the wrong drug or dose being given to a patient, or a drug being given which interacts with another drug the patient may be on and results in a bad outcome. The Institute of Medicine estimates that medical errors account for somewhere between 50,000 and 100,000 deaths in the U.S. each year.1
Medicare
The health insurance program administered by the United States government, covering people who are either age 65 and over, or who meet other special criteria. In 2005, Medicare provided health care coverage for 42.6 million Americans, representing costs of over $300 billion. Enrollment is expected to reach 77 million by 2031, when the baby boom generation is fully enrolled.1
National Health Care Voucher plan
A plan in which everyone has a voucher to buy a basic benefits package which can have added choices, options, etc. if the consumer pays an additional amount. In this plan the employer is not involved so insurance would not change as a result of a job change.
National Health Insurance Exchange
A regulated market of private health plans which would compete with a proposed public health plan for consumers who cannot obtain health insurance through their employers or current public programs such as Medicaid or SCHIP.
Out of pocket expenses
Expenses paid directly by the consumer to pay for medical expenses either not covered by insurance or in order to reach the plan's deductible.
Payroll tax
Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. Governments use revenues from payroll taxes to fund such programs as social security, health care, unemployment compensation, worker's compensation, and sometimes even local governments require a small tax to maintain and improve local transportation.5
Pre-existing conditions
A medical condition developed prior to issuance of a health insurance policy. Some policies exclude coverage of such conditions for a period of time or indefinitely.1
Preventive care
Preventive care is a set of measures taken in advance of symptoms to prevent illness or injury. This type of care is best exemplified by routine physical examinations, health screening, and immunizations, as well as engaging in exercise and observing good dietary practices. The emphasis is on preventing illnesses before they occur.1
Reinsurance
1. The resale of insurance products to a secondary market, thereby spreading the costs associated with underwriting.1
2. Special insurance coverage obtained by a provider or health plan to protect against certain unanticipated and potentially crippling losses incurred on covered services for members.10
Risk adjustment
A process by which premium dollars are shifted from a plan with relatively healthy enrollees to another with sicker members. It is intended to minimize any financial incentives health plans may have to select healthier than average enrollees.1
SCHIP (State Children's Health Insurance Program)
SCHIP was designed as a Federal/State partnership, similar to Medicaid, with the goal of expanding health insurance to children whose families earn too much money to be eligible for Medicaid, but not enough money to purchase private insurance.6
Single payer system
Single payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or payer. In the case of health care, a single-payer system would be set up such that one entity -- possibly a government run organization -- would collect all health care fees and pay out all the health care costs. Many people have suggested that a single payer system could significantly reduce the costs of health care compared to our current system of multiple payers (insurers) by reducing administrative and overhead costs. However, many people are uncomfortable with the idea of a system in which a single payer, government or other, has control over the health care system and the decisions concerning the treatments that are available, the coverage that will be offered, and the resources that will be made available through the system.7
Tax credit
The Health Coverage Tax Credit (HCTC) is a federal tax credit that can pay for 65% of health insurance premiums for eligible families and individuals. Congress established the HCTC with the goal of making health coverage more affordable for people who otherwise might not be able to have it.8
Transparency
A term used to describe the concept of making information about the performance of health care providers available to consumers, employers, health care providers and others. The theory is that by making information concerning the costs, quality, safety and service of health care providers (physicians, hospitals, nursing homes and other providers) easily available, it will help health consumers and purchasers make better decisions concerning their options, and will give incentive to providers to deliver higher quality, more cost-effective care to patients and health consumers.3
Uninsured
People who lack public or private health insurance. It is estimated that in the U.S. in 2007 we have over 47 million uninsured Americans, representing about 16% of the population. The U.S. is the only major industrialized nation in the world lacking universal health care access in which almost everyone is insured or has access to health care.1
Universal health care
The idea that every American should have access to affordable, high-quality health care.9
