Glossary
Academic detailing
On-site educational outreach to improve physicians' and other prescribers’ clinical decision-making in order to enhance the quality and cost-effectiveness of care.Adverse selection
The trend of people only purchasing insurance when they are sick and have significant expenses. Or, the separation of healthier individuals into some plans and sicker individuals into other plans.Annual or lifetime benefit caps
The maximum amount health insurance plans cover claims for plan members during a one-year period (annual benefit cap) or throughout that individual’s membership (lifetime benefit cap).Budget neutrality
A health expansion plan in which new costs are balanced by spending cuts elsewhere, so that overall spending remains unchanged. Medicaid waivers often carry a budget neutrality requirement by the federal government.Certificate of Need
A regulatory process that requires hospitals and other health care facilities to obtain state approval before offering certain new or expanded servicesCommunity rating
Pure community rating requires insurers to set the same premiums for everyone, regardless of age, health, gender or other factors. Adjusted community rating likewise prohibits insurers from varying premiums based on health status or claims history, but it does allow insurers to vary rates (within limits) based on factors such as geography, age and family composition.Connector
A common marketplace of health insurance options for individuals.Crowd-out
The idea that publicly financed health coverage prompts employers and individuals to drop private insurance in order to enroll in public programs.DSH (Disproportionate Share Hospital) Funding
Funding (mainly from the federal government, through Medicaid) to hospitals that serve a relatively large volume of uninsured and low-income patients.DSH (Disproportionate Share Hospital) Funding
Funding (mainly from the federal government, through Medicaid) to hospitals that serve a relatively large volume of uninsured and low-income patients.ERISA (Employee Retirement Income Security Act of 1974)
A federal law that governs employee benefit programs and includes general protections about benefits and the disclosure of information. Among other policies, ERISA prevents states from making laws that directly regulate an employer’s heath plans if the employer “self insures.” ERISA also prohibits states from requiring employers to provide health benefits.Federal match
For the Medicaid and SCHIP programs, the federal government “matches” states’ contributions by at least 50%. The matching rate varies by state and program.Fee-for-service
This refers to health insurance plans that reimburse physicians and hospitals for each individual service they provide. These plans allow clients to choose any physician or hospital. Managed care is an alternative to fee-for-service.Formulary (or PDL, Preferred Drug List)
The list of drugs that a health plan will cover, either fully or in part. Formularies vary by health plan.Fully insured plan
An employer that is "fully insured" enters into a contract with a health insurance company to handle health benefits for its workers. The employer pays premiums to an insurer, and, in exchange, the insurer pays health care claims and bears the risk for claims.Guaranteed issue
A requirement that insurers sell insurance policies to anyone who seeks one, regardless of health, income, age or other factors.High-risk pool
Usually, a nonprofit association created by a state to provide health insurance for people with preexisting health conditions.Health Insurance Portability and Accountability Act (HIPAA)
A federal law that prevents workers from being locked out of insurance or having to wait for coverage due to preexisting medical conditions. The law also prohibits insurers from discriminating against workers based on their medical history.Health Information Technology
Computerized records and other tools to streamline healthcare using advanced technology.Individual mandate
A law that requires all residents to obtain health insurance.Medicaid managed care organizations (MCOs)
Managed care organizations that provide services to Medicaid beneficiaries. A system of health service delivery and financing that coordinates the use of health services by its members, designates covered health services, provides a specific provider network, and directs the use of medical care services using a monthly captivated payment.Medicaid
The federal health insurance program established in 1965 through Title XIX of the Social Security Act. Medicaid pays for health services for low-income Americans under age 65, including children, pregnant women, and people with disabilities, and for nursing home care for low-income older adults over 65. It is financed through both federal and state funds.Medicaid waiver
Sections 1115 and 1915 of the Social Security Act define specific circumstances under which the federal government may, at a state’s request, “waive” certain provisions of the federal Medicaid laws. The “waiver” is the agreement between the federal government and the state that exempts the state from these provisions and includes special terms and conditions that define who may be covered. For example, some states use Medicaid waivers to extend Medicaid coverage to adults who do not have dependent children and who are disabled – a group that does not ordinarily qualify for Medicaid under federal law.Medical home
A primary care practice where a patient's health history is known, and where a patient routinely seeks medical care.Medical loss ratio
The percentage of premium dollars an insurance carrier spends on medical care. State rules may set this amount, as opposed funds spent on administrative costs and marketing.Monthly capitation
A monthly fee per person, rather than a payment per claim, in a managed care plan.Non-group market (individual market)
This refers to the health insurance market that can be bought directly from an insurer, rather than through a group (such as an employer).Non-profit plans
Insurance plans which cannot sell shares of stock and which must operate in the interest of the public good. In return, they often receive a tax benefit.Pay for Performance
The idea that there should be a direct linkage between what is paid for health services and the value of the services purchased. Pay-for-performance changes reimbursement methods to reward providers for providing higher quality and efficient care.Pay or play
The policy that provides employers the choice of whether to "play" by providing health care benefits to their employees or "pay" by paying money to the state.Potentially preventable conditions (PPCs)
Also called “never events,” these are mistakes by medical providers that often lead to harmful conditions for patients.Premium assistance
The use of public funds to purchase (or subsidize the purchase of) private insurance.Primary Care Case Management (PCCM)
The use of primary care physicians to manage all medical and surgical care for patients, typically structured through a fee-for-service system.Rate bands
The variation in insurance premiums allowed by state regulations, expressed as a ratio or as a percentage of the index rate or average rate. Rate bands are used to limit the variation in premiums among different individuals.Reinsurance
Reinsurance is insurance for insurance companies. A primary insurance company transfers risks of high cost claims to another private carrier or to a government-sponsored program. The insurer or government-sponsored program then assumes this risk and pays for some or all of these high cost claims. There are two types of reinsurance programs: in one, the government pays for some or all of the claims through general revenues; in the other, state law establishes an association of insurance companies and requires these companies to pool their resources to pay high cost claims.Section 125 Cafeteria plans
(so called after Section 125 of the Internal Revenue Code) Allow employees to set aside pre-tax dollars for health benefits even if the employer does not contribute to the employee’s premium. Some states encourage or require certain businesses to establish cafeteria plans so that their workers will be able to pay for premiums with pre-tax dollars.Self-insured plan
A health plan in which the employer assumes the financial risk of covering its employees, paying medical claims from its own resources.Small group insurance market
The market that sells plans to employers who are smaller than a certain size. Most commonly, the cut-off is 50 employees, but it varies by state insurance laws.Standardized benefit plans
A state can set certain standards for health coverage benefits and cost-sharing.State-mandated benefits
In order to sell health insurance, insurers must cover certain services and providers, which vary by state.State plan amendment
A proposed change to a state’s Medicaid plan, which must be submitted to the Centers for Medicare and Medicaid (CMS).Uncompensated care funds
Funds used to pay for physician or hospital services when no payment is received from the patient or from insurance. Sometimes, uncompensated care is defined to include costs that come from cost-shifting or bad debt, as well as charity care; other times, uncompensated care is defined to exclude bad debt and only refer to care for people who are determined in advance to be in need of care at no charge.Underinsured
People whose insurance does not cover their necessary health care services, leaving them with out-of-pocket expenses that exceed their ability to pay.Wrap-around benefits
Medicaid, as a secondary insurer, is able to pay for benefits not covered by a private plan. This is often utilized in premium-assistance programs.TEFRA
The TEFRA option, also known as the “Katie Beckett option,” allows states to cover home and community based care for disabled children who are not in residential programs. Eligibility depends upon the level of disability and care needed by the child, rather than the family's income. Under this option, states can avoid institutionalizing children in skilled nursing facilities.Medicare Savings Program
Medicare Savings Programs provide eligible Medicare beneficiaries with financial assistance for Medicare premiums and cost-sharing. There are several different programs for beneficiaries:1) Qualified Medicare Beneficiaries (QMBs) have their Medicare Part B premiums paid through federal and state Medicaid matching funds. In addition, if they see health providers who accept Medicaid, QMBs do not have to pay cost-sharing for Medicare services.
2) Specified Low-Income Medicare Beneficiaries (SLMBs) also have their Medicare Part B premiums paid by federal and state Medicaid-matching funds. However, SLMBs are responsible for cost-sharing for Medicare services, which is typically 20% of charges for doctor visits.
3) Qualified Individuals (QIs) have their Medicare Part B premiums paid through a federal block grant to state Medicaid agencies. However, QIs are responsible for cost-sharing for Medicare, and if the state exhausts its block grant funds, the state is not required to continue paying premiums for QIs.
