Allowed Amount
The maximum amount a plan recognizes for a covered service. Your cost sharing is often calculated from this amount.
Insurance Glossary
Common health insurance terms, in plain English.
Use the search box or browse alphabetically. Exact definitions and how a term applies can vary by plan and program.
Annual Enrollment Period (AEP)
For Medicare, the fall period when eligible beneficiaries can generally change Medicare Advantage and Part D coverage for the next calendar year.
Coinsurance
A percentage of the allowed cost you pay for a covered service, such as 20%, after applicable deductible rules.
Copay / Copayment
A fixed dollar amount you pay for a covered service or prescription, such as $30 for an office visit.
Cost-Sharing Reduction (CSR)
Marketplace savings that can lower deductibles, copays, coinsurance and out-of-pocket maximums for eligible consumers who enroll in qualifying Silver plans.
Creditable Prescription Drug Coverage
Drug coverage expected to pay, on average, at least as much as standard Medicare prescription drug coverage. It can help protect against the Part D late-enrollment penalty.
Deductible
The amount you pay for certain covered services or prescriptions before the plan begins paying according to its cost-sharing rules.
Drug Formulary
A plan’s list of covered prescription drugs, usually organized into cost tiers and subject to plan rules.
EPO (Exclusive Provider Organization)
A plan that generally covers non-emergency care only when you use the plan’s network.
Explanation of Benefits (EOB)
A statement showing how a claim was processed, what the plan paid, and what you may owe. It is not usually a bill.
HMO (Health Maintenance Organization)
A managed-care plan that usually limits non-emergency coverage to its network and may use primary-care or referral requirements.
In-Network
Doctors, hospitals, pharmacies and other providers that have contracted with the plan under negotiated terms.
Maximum Out-of-Pocket (MOOP)
The most you pay in a plan year for covered services counted toward the limit. Premiums and certain other expenses generally do not count.
Medigap / Medicare Supplement
Private insurance designed to help pay certain out-of-pocket costs in Original Medicare. It is not the same as Medicare Advantage.
Network
The doctors, hospitals, facilities, pharmacies and other providers that contract with a health plan.
Original Medicare
The federal Medicare program consisting primarily of Part A and Part B.
Out-of-Network
Providers that do not have a contract with your plan. Coverage may be limited or cost more depending on plan type.
PPO (Preferred Provider Organization)
A plan that generally allows in-network and out-of-network care, with lower costs in network and typically no specialist referral requirement.
Premium
The amount paid to keep insurance coverage active, usually monthly, whether or not you use healthcare.
Premium Tax Credit (PTC)
A federal tax credit that can lower the monthly premium for eligible Marketplace consumers.
Prior Authorization
A requirement that the plan approve certain services, medications or equipment before the plan will cover them under its rules.
Provider Network
The contracted group of healthcare providers and facilities associated with a particular health plan.
Referral
An authorization or direction—often from a primary-care provider—to see a specialist under certain plan rules.
Special Enrollment Period (SEP)
A limited enrollment opportunity triggered by qualifying circumstances outside a standard enrollment window.
Step Therapy
A drug-utilization rule requiring you to try one or more preferred medications before the plan covers another medication, unless an exception applies.
Tier
A formulary category that groups covered drugs by cost or preferred status. Lower tiers often—but not always—have lower member costs.
TrOOP (True Out-of-Pocket Costs)
For Medicare Part D, costs that count toward the beneficiary’s annual out-of-pocket threshold under Part D rules. Not every amount paid for a drug necessarily counts.