Health Insurance Glossary

Definitions for commonly used medical insurance terms

Insurance terms can be confusing. Refer to this glossary to help sort out what’s what in your
search for individual insurance coverage.

Co-insurance
The cost of medical expenses you and your insurer share after you meet a deductible each
calendar year.

Co-payment
A flat dollar amount you pay for medical services.

Deductible
The amount you pay on your own before your insurer pays.

Exclusions
Services that are not covered by health plans. Examples are vision care, dental care or cosmetic surgery.

Formulary
An insurance company’s list of covered drugs.

Group insurance (employer sponsored)
Health plans offered to a group of individuals by an employer, association or other entity.

Health Savings Account (HSA)
An account that allows you to save tax-free money to use to pay medical expenses. Balances roll over at year’s end
for you to use for future expenses.

High-deductible health plan
A plan that provides coverage for high-cost medical services. Coupled with a Health Savings Account, these plans feature
high deductibles and limit out-of-pocket expenses.

High-risk pool
A state program offering coverage to individuals who cannot get health insurance from other sources for various reasons.

Individual medical insurance
Health coverage you buy yourself from an insurer.

Lifetime benefit
The total amount of coverage available to you over your lifetime.

Network
A group of health care providers who are contracted to provide services to members of a specific health plan.

Out-of-pocket maximum
The most you will pay out of your pocket during a calendar year, including your deductible and your portion of the medical bill.

Pre-existing condition
An illness or health condition that you have and/or are aware of before applying for new health insurance coverage.

Premium
The amount you pay, usually monthly, to get and maintain health insurance coverage.

Reimbursement
The percentage of a medical bill that your insurer pays.