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Kids and Health Care: Key Health Insurance Terms & Definitions - A Through D

ACCIDENTAL

In a health insurance policy, accidental means unexpected or an undesigned cause of bodily injury. A related term -- accidental means -- means the mishap itself must be accidental...not just the resulting injury. An example: Your son Bo is chopping wood when the ax slips from his hand and cuts his foot; this is accidental means. However, if Bo's finger gets in the way of the ax, it may not count as accidental means.

ACCIDENTAL DEATH AND DISMEMBERMENT

AD&D coverage is a policy or a provision of a policy that pays either a specific amount or a multiple of a weekly disability benefit. The full coverage takes effect if your child loses his or her sight -- or two limbs -- in an accident. (A lower amount is payable if he or she loses one eye or one limb.)

ACUTE CARE

Acute care means skilled, medically necessary care provided by medical and nursing professionals in order to restore the person to health or the ability to function. For example, acute care would be rendered to persons recovering from major surgery.

ADDITIONAL INSURED

A person other than the named insured who is covered by the terms of a policy. Usually, additional insureds are added by endorsement or are described in the definition of insured in the policy. Your children would be additional insureds under your policy.

AGE CHANGE

The date on which a person's age -- for insurance purposes -- changes is an important coverage point. In most policies, health insurers use the age at the previous birthday for rate determinations. This can be of special importance as your children near adulthood; most standard health plans will require them to get their own coverage by the time they turn 25.

BASIC PREMIUM

This is a fixed cost charged in a retrospective rating plan. The basic plan is a kind of starting point -- a percentage of the standard premium, designed to give the insurance company enough money to cover administrative expenses and commissions.

BENEFIT PERIOD

The benefit period defines the period during which you are eligible for benefits. Usually, a 90-day benefit period starts with each illness and commences the day you are admitted to a hospital and ends when you haven't been hospitalized for a period of 60 consecutive days. There is no limit to the number of 90-day benefit periods you can have.

CAPITATION

Capitation (CAP) is the fixed amount of money paid on a monthly basis to an HMO or an individual health provider for the full medical care of an individual.

CASE MANAGEMENT

Case management means the assessment of a person's LTC needs and the appropriate recommendations for care, monitoring and follow-up as to the extent and quality of the services provided. Your case manager is the health professional (e.g. nurse, doctor, social worker) affiliated with a health plan who is responsible for coordinating and approving the medical care that you and your family receive.

CLOSED PANEL

This is a system in which insured people must select one primary care physician who will refer patients to other health care providers within the plan. This is also called a closed access or gatekeeper system.

CO-INSURANCE

Co-insurance is the percentage of your medical bills that you are expected to pay. Co-insurance payments usually constitute a fixed percentage of the total cost of a medical service covered by the plan.

If a health plan pays 80 percent of a physician's bill, the remaining 20 percent that the member pays is referred to as co-insurance.

COPAYMENT

A copayment is the fee paid by a plan member for medical services. A copayment would be the out-of-pocket expenses you are expected to pay, such as $10 for an office visit or $5 for a prescription.

COVERED SERVICES

Most policies list medical benefits such as tests, procedures, treatment services and drugs that they will pay for. These lists are usually based on industry-standard lists called taxonomies. In most cases, the covered services on the list are also coded according to how much and under what special limits the services are covered.

Most policies also list the services that the insurance company will not cover. You have to pay for these services. This is an easy concept to describe in the abstract -- but it can be complicated in a dispute.

DEDUCTIBLE

The sum of money that an individual must pay out of pocket for medical expenses before a health plan reimburses a percentage of additional covered medical expenses is called the deductible. Deductibles for family coverage are often $200 to $500 per year.

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