GLOSSARY OF HEALTHCARE TERMS
California Poverty Level: Higher than Federal Poverty Level, possibly effecting eligibility for healthcare subsidies. (See Federal Poverty Level below.) Catastrophic health insurance: Provides all or percentage of protection against high cost of treating severe or lengthy illness or disability in conjunction with another insurance policy up to a maximum limit of liability. Coverage: The guarantee against specific losses under terms of an insurance policy. Crowd-out: A fairly new practice where individuals or employers drop health insurance coverage in order to take advantage of public subsidies designed to offer coverage to the uninsured. Dependent coverage: Children or grandchildren under the age of 25 can be included on insured’s healthcare coverage for an extra premium cost most often carried by the insured individual. Court-ordered coverage for children may be included. Disabled children may eligible for coverage indefinitely. Dirigo Health Program in Maine: Contains healthcare costs, ensures access, and improves quality of healthcare to Maine businesses with 50 or fewer employees, the self-employed and individuals. Participation is voluntary. Discounts are based on ability to pay. Insurance is carried by Anthem Blue Cross and Blue Shield of Maine. It could guarantee minimal access to insurance and healthcare for all Maine citizens with a focus on lower income people. Deductible: The amount an insured must pay annually before insurer will make any medical plan payments. Employee mandate: Requirement that employees participate by purchasing or “taking up” coverage when offered by an employer. Employer mandate: Requirement that employers contribute to healthcare coverage for workers. Employee Retirement Income Security Act (ERISA): 1974 federal law established standards, reporting and disclosure requirements for employer-funded pension and employee benefits, including healthcare. Self-funded health benefit plans have been heretofore exempt from state insurance laws. Federal Poverty Level (FPL): The amount of income determined by the federal Department of Health and Human Services to provide a bare minimum for food, clothing, transportation, shelter, and other necessities. FPL is reported annually and varies according to family size. The FPL for a family of four in 2007 is $20,650. Fee-for-service: A health services billing practice where medical practioners charge separately for each patient seen and each service rendered. Fee maximum (fee schedule, fee allowance, fee maximum or capped fee): A fee determined by a Managed Care Organization and agreed to by a physician to be acceptable as payment in full for a medical service or procedure. Fully funded plan: An insurer or Managed Care Organization bears financial responsibility of guaranteeing claim payments and paying all incurred covered benefits and administration costs. Funding vehicle: In a self-funded plan, this is the account into which money that an employer and employees would pay in premiums to an insurer or Managed Care Organization is deposited until the money is paid out. Group Insurance: Private coverage generally available to groups such as employer groups. An estimated 55% of Californians are in employer-sponsored group plans. Health Insurance Portability and Accountability Act (HIPAA): Federal act that protects people who change jobs, are self-employed or who have pre-existing medical conditions by standardizing approach to continuation of healthcare benefits with parity to benefits offered to employees in large group plans. It contains a provision to guard against discrimination based on health status. Health Insurance Purchasing Cooperative (HIPC) or purchasing pool: Public or private organizations that secure health insurance coverage for pool members, typically the employees of member employer groups. Health Savings Account (HSA): An account owned by an individual that can be funded by the employer, employee or both. By federal rules, an HSA must be paired with a high deductible health plan meeting federal standards. Employer contributions are not counted as income and employee contributions are pre-tax. HSAs are portable and unused dollars can be rolled over. Healthy Families Program (HFP): California’s version of the federal State Children’s Health Insurance Program (SCHIP), administered by the Managed Risk Medical Insurance Board (MRMIB), provides health, dental, vision and basic mental health coverage for legal immigrant children from birth to age 19, who do not have private coverage or Medi-Cal in families earning up to 250% of the federal poverty level (FPL). Families pay a relatively low monthly premium and choose from a selection of private managed care plans. Funding for HFP generally is on a 2-to-1 federal/state matching basis. High Risk pool: Health insurance purchasing programs organized by states (34 currently, including California) to provide coverage for individuals who have been denied health insurance because of a medical condition or history of health service use or whose premiums have been rated higher because of their health status or claims experience. California’s Managed Risk Medical Insurance is administered by the Managed Risk Medical Insurance Board (MRMIB): Enrollment in MRMI is limited to funds available. The program is currently funded at $40 million. Labor Task Force for Universal Healthcare: Labor coalition committed to educating the labor movement about a single-payer healthcare system in California Lifetime maximum benefit amount: A maximum dollar amount set by a Managed Care Organization limiting the total amount a plan must pay for all healthcare services provided to a subscriber during the subscriber’s lifetime. Managed care: This is the integration of both financing and delivery of healthcare within a system that seeks to manage accessibility, cost and quality of that care. Massachusetts program: Seriously flawed, mandatory participation healthcare program which carries tax penalties for those who do not participate, even when they cannot afford to participate. Affects lower income people most adversely. Medi-Cal: California’s version of federal Medicaid provides comprehensive health benefits to low income children, their parents, or caretaker relatives, pregnant women, elderly, blind or disabled persons, nursing home residents and refugees who meet specified eligibility criteria. Medi-Cal is administered by the state Department of Health Services (DHS) and costs are shared about equally between the state and General Fund and federal funds. Medicaid: A jointly funded Federal and State program that provides hospital and medical expense coverage to our low-income population and certain aged and disabled individuals. Medicare: A Federal program that provides a hospital and medical expense insurance plan primarily for elderly and disabled individuals: - Part B is a voluntary program that is part of Medicare and provides benefits to cover the costs of physicians’ services. - Part C (Medicare + Choice) is part of Medicare that expands the list of different types of entities allowed to offer health plans to Medicare beneficiaries. - Part D is a mostly voluntary enrollment drug benefit plan administered through two types of private plans - Prescription Drug Plan (PDP) for drug coverage only, or a Medicare Advantage (MA) plan covering both medical services and drugs (MA-PD). These premium-paid plans employ either a deductible or coinsurance applicable up to an initial coverage limit, or they employ no deductible with tiered drug co-payments. Plans can differ vastly and there can be coverage gaps. Some people may qualify for premium subsidies. (See Tiered drug plan below.) Out-of-pocket maximums: These are dollar amounts set by Managed Care Organizations to limit the amount a member has to pay for particular healthcare services during a defined time period. Pay or play: Employers choose to pay a fee to the state for costs of healthcare or provide healthcare insurance coverage for their workers. Employees may share monthly premium costs with deductibles and co-pays. Pre-existing condition: This is any condition for which an individual received medical care prior to the effective date of health insurance coverage. Policies define length of periods prior to effective date. Premium: Prepaid payment made to insurance health plans by purchasers for medical benefits. Safety net: The network of public and private providers which provide free, discounted or uncompensated medical care to medically needy, low income or uninsured populations. Section 125 plan: Employer-established savings account that allows employees to pay for their contributions to healthcare, child care, and other approved expenses with pre-tax dollars. Self-funded plan: Employer or other group sponsor, rather than an MCO or insurance company, is financially responsible for paying plan expenses. Single-payer healthcare: A type of healthcare financing system in which a single entity, typically a public or nonprofit organization, acts as the administrator or payee to collect all healthcare fees and revenues, and pay out all healthcare costs. SB 840 – The California Universal Healthcare Act: A proposed single-payer plan to provide coverage for all Californians. The plan would include comprehensive health insurance coverage, meaning hospital, medical, surgical, and mental health, dental and vision care, prescription drugs and medical equipment, emergency care, and substance abuse programs. Clients could choose their own doctors. There would be no deductibles, out-of-pocket payments or co-pays. Coverage would continue without interruption, even in cases of unemployment. State Children’s Health Insurance Program (SCHIP) [Called Healthy Families in California]:States are provided federal funds to target children in families with incomes up to 200% of the Federal Poverty Level (FPL). Healthy Families provides low-cost health, dental and vision coverage to children in families with incomes up to 250% of the FPL. Tiered drug plan: Drugs are placed in tiers of generic, preferred brand name, or non-preferred brand name and specialty drugs, usually resulting in lowest co-pays for generic drugs, and possibly affecting how drugs are prescribed to avoid higher patient cost burdens. Choice of drug plan is definitely affected. Trust Fund: A trust is a separate legal entity that holds property or assets of some kind for the benefit of a specific person, group of people or organization to be used for a specific purpose, as for healthcare insurance premiums and reimbursements or payments for healthcare services and drugs. A trust fund can also be funded by a targeted tax with revenues used solely for one purpose, such as healthcare. Universal healthcare: A healthcare system that provides coverage for all residents. Workers’ Compensation Insurance: State-mandated insurance program which employers must carry that provides benefits for healthcare costs and lost wages to qualified employees and dependents if an employee suffers work-related injury or disease. |