Kids and Health Care: Key Health Insurance Terms & Definitions - E Through M

ELIMINATION PERIOD

Elimination period (EP) means the period of time, usually expressed in days or months, at the beginning of a confinement in a long-term care facility, during which no benefits are payable. The EP could be defined as a "time deductible."

FEE-FOR-SERVICE

Health insurance plans that reimburse physicians and hospitals for each individual service they provide are called fee-for-service plans. These plans allow insureds to chose any physician or hospital.

FORMULARY

This is a health plan's list of approved prescription medications for which it will reimburse members or pay for directly. Additional medications are usually not available to plan members.

GATEKEEPER PHYSICIAN

The primary care physician who directs the medical care of HMO members is the gatekeeper physician. The primary care physician determines if patients should be referred for specialty care.

THE HCFA

The Health Care Financing Administration (HCFA), part of the Department of Health and Human Services, administers Medicare and Medicaid with the assistance of Social Security Administration offices throughout the country. The HCFA establishes standards for medical providers and organizations if they are to satisfy the requirements to be certified as a qualified Medicare provider.

HEALTH MAINTENANCE ORGANIZATIONS (HMOs)

These are health plans that contract with medical groups to provide a full range of health services for their enrollees for a fixed pre-paid, per-member fee. There are three different kinds of HMOs: open or group model HMOs; closed or staff model HMOs; and individual practice associations (IPA).

• Open or group model HMOs contract with independent groups of physicians that provide coordinated care for large numbers of HMO patients for a fixed, per-member fee. These groups will often care for the members of several HMOs.
• Closed or staff model HMOs employ salaried physicians and other health professionals who provide care solely for members of one HMO.
• Individual practice associations (IPA) contract with groups of independent physicians who work in their own offices. These independent practitioners receive a per-member payment or capitation from the HMO to provide a full range of health services for HMO members. These providers often care for members of many HMOs.

A growing number of HMOs now offer a point-ofservice (POS) option. These "escape hatch" plans allow HMO members to seek care from non-HMO physicians, but the premiums for POS plans are more costly than those for traditional HMOs. For more on these and other types of HMOs, see Chapter 4.

HOSPICE CARE

Hospice care refers to nursing services provided to the terminally ill. It's offered in a hospice, a nursing home or in the patient's home -- where nurses and social workers can visit on a regular basis. The purpose of the care is to keep the patient comfortable and to enable the patient to die with dignity.

INDEMNITY CONTRACTS

Indemnity contracts are policies that provide a daily benefit -- $50, $60 or $70 per day -- for each day of confinement in a hospital or LTC facility. This method of payment can be contrasted with an expense incurred contract that reimburses for actual expenses incurred while confined. (See Chapter 3.)

INTERMEDIARY

A private insurance company contracted by the Department of Health and Human Services for the purpose of processing payments to patients and health care providers.

LIMITED HEALTH INSURANCE

These special health insurance policies provide limited coverage for specific injuries or illnesses -- such as travel accidents, particular diseases and hospital income.

LONG-TERM CARE

Long-term care (LTC) is care that is provided for persons with chronic disease or disabilities. The term includes a wide range of health and social services, which may involve adult day care, custodial care, home health care, hospice care, intermediate care, respite care and skilled nursing care. LTC does not include hospital care.

MANAGED CARE

Managed care refers to a broad and constantly changing array of health plans that attempt to control the cost and quality of care by coordinating medical and other health-related services. The vast majority of Americans with private health insurance are currently enrolled in managed care plans.

Proposals currently being considered by the U.S. Congress would, if enacted, guarantee that millions of Americans who are covered by Medicare and Medicaid will soon join managed health care plans.

MEDICAID

Medicaid is the federal-state health insurance program for low income Americans. (Medicaid also foots the bill for nursing-home care for the indigent elderly and mentally disabled.)

MEDICAL NECESSITY

A medical necessity is something that your doctor has decided is necessary. But a medical necessity is not always the same as a medical benefit -- something that your insurance policy has agreed to cover. In some cases, your doctor might decide that you need care that is not covered by your insurance policy.

Your insurance company may have some discretion over whether or not it will pay for medical necessities. The company's decisions are supposed to be based on its understanding of the medical care that most patients need and state-of-the-art practices at the time; but political and regulatory pressure weighs heavily in favor of coverage, in disputed cases.

MEDICARE

Medicare is a federal health insurance program for persons age 65 or older, individuals with permanent kidney failure and certain persons who are totally disabled. The program was implemented in 1965 as part of the amendments to the Social Security Act of 1935.