US Healthcare Domain

Health Care or Health Insurance is similar to general insurance. As you know, in any insurance, insurer
(Insurance company) will provide the plans and customer (Subscriber or Policy holder) will buy policy of
his desired plan. Insurer will receive the premium amount from the policy holders and the policy
Holders will get reimbursements from insurer for the valid claims they have submitted. The same
happens in healthcare insurance but in addition to insurer and policy holder there are other major
contributors such as provider, TPA (Third Party Administrator), BROKER, etc.
1. Insurer: An entity which creates plan, sell policy and reimburses policy holder or provider for the
submitted valid claims.
2. Policy Holder: Healthcare policyholder - A person or an entity, who buys the policy from the insurer
or BROKER, pays premium to the insurer and sometimes submit claim.
3. Provider: A person or an entity, which provides the health care service to the policy holder and their
dependents, either receives payment for the service from the policy holder or from the insurer by
submitting a claim.
4. TPA: A person or an entity that manages the claims of policy holder or provider and receives
payment for the management from the respective contributor.
5. BROKER: As you have guessed, he is an agent who sells policy to the customers on behalf of insurer
and receives commission in return from the Insurer.
6. Subscriber – Person who pays the premium and under whom the family is covered
7. Member – Who receives medical coverage under a subscriber. Dependents of the family.
8. Claims – “An invoice from the provider to the doctor for the services rendered”.
9. Coinsurance – A form of medical cost sharing in a health insurance plan that requires an insured
person to pay a stated percentage of medical expenses after the deductible amount, if any, was paid.
10. Copayment – A form of medical cost sharing in a health insurance plan that requires an insured
person to pay a fixed dollar amount when a medical service is received. The insurer is responsible for
the rest of the reimbursement
11. Deductible – A fixed dollar amount during the benefit period – usually a year – that an insured
person pays before the insurer starts to make payments for covered medical services.
12. FSA (Flexible spending accounts or arrangements) – Accounts offered and administered by
employers that provide a way for employees to set aside, out of their paycheck, pretax dollars. Can pay
only medical expenses. Money lost if unused. FSA can cover childcare expenses, if setup separately.
13. MSA (Medical Savings Account) / HSA (Health Spending Account) – Savings accounts designated
for out-of-pocket medical expenses. Employers and employees can contribute to this and are pre-
taxed. Can carry unused funds into future year. Are normally combined with high-deductible or
catastrophic health insurance plans.
14. Fully Insured Plan – A plan where the employer contracts with another organization to assume
financial responsibility for the enrollees’ medical claims and for all incurred administrative costs.
Commercial Health Care Plans:

 Health Maintenance Organization: HMOs require you to choose a primary care physician (PCP) in
their network. You must see this PCP for any health issue apart from emergencies. The PCP can
refer you to a specialist in the HMO’s network if they cannot fully treat the issue. The exception is
obstetricians/gynecologists, with whom patients can make an appointment directly. HMOs often
have the lowest premiums and out-of-pocket costs, but they offer fewer choices. If you want to see
a doctor outside the network, it will not be covered. The amount you pay for a monthly premium,
deductible, and co-pay depends on your plan.
 Preferred Provider Organization: PPOs also have a network of physicians, but offer policyholders
more freedom and flexibility. If you see an in-network doctor, your co-pay is lower and a larger
portion of the services are covered. You still have some coverage if you see an out-of-network
doctor, but a smaller portion of the cost is covered and you pay more out of pocket. If you want to
see a specialist, you do not need a referral from your PCP. As with HMOs, PPOs charge monthly
premiums, deductibles, and co-pays. The amounts vary depending on your policy.
 Exclusive Provider Organizations: An EPO requires you to see in-network doctors, but you are not
required to see a PCP for a referral before seeing a specialist. You do not receive any out-of-
network coverage, so your choices are limited to in-network providers. EPO plans are less
expensive than most HMO or PPO plans. They may be best suited to young, healthy individuals who
do not expect to need much medical care in the coming year. You pay monthly premiums,
deductibles, and co-pays.
 Supplemental Insurance - An additional insurance plan that helps pay for healthcare costs that are
not covered by a person’s regular health insurance plan. These costs include copayments,
coinsurance, and deductibles. There are many different types of supplemental health insurance,
including vision, dental, hospital, accident, disability, long-term care, and Medicare supplemental
plans. There are also supplemental health insurance plans for specific conditions, such as cancer,
stroke, or kidney failure. Some types of supplemental health insurance may also be used to help pay
for food, medicine, transportation, and other expenses related to an illness or injury.
 MediGap - A Medigap policy is health insurance sold by private insurance companies to fill the
“gaps” in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs
that the Original Medicare Plan doesn't cover. If you are in the Original Medicare Plan and have a
Medigap policy, then Medicare and your Medigap policy will each pay its share of covered health
care costs. As long as you pay your premium, your Medigap policy is guaranteed renewable. This
means it is automatically renewed each year. Your coverage will continue year after year as long as
you pay your premium.
Government Health Care Plans:

Medicare is a national health insurance program that dates back to 1966. It provides health insurance
for US nationals older than 65 years old, but also for younger people with end stage renal disease, ALS,
and some other disabilities.

The Medicare program is divided into four parts:

 Part A – which covers hospitals, skilled nursing and hospice services.
 Part B – covers outpatient services, including some providers’ services while inpatient at a hospital,
outpatient hospital charges
 Part C – is an alternative called Managed Medicare, which permits patients to select health plans
with at least the same service coverage as Part A and B, often the benefits of Part D, and an annual
out of pocket spend limit which A and B lack. To sign in this part, one must sign in Part A and B fist.
 Part D – covers mostly self-administered prescription drugs.

Medicaid is a federal and state program that helps people with limited income and resources to cover
medical costs, while covering benefits normally not covered by Medicare, as nursing home care and
personal care services. It is the largest source of funding for medical and health-related services for
people with low income in the United States.

State Children’s Health Insurance Program (SCHIP), this is a program that covers with health insurance
children of families with modest income, that are not low enough to qualify for Medicaid.