Health Insurance Glossary 

This page provides clear definitions for many commonly used terms in health insurance—perfect for demystifying the jargon when you're navigating coverage, appeals, or accessing treatment. Here are some key entries:

• Affordable Care Act (ACA): The 2010 healthcare reform law enabling individuals to buy insurance regardless of pre-existing conditions.
  
  

• Allowed Amount: The highest payment negotiated between your insurer and provider for a covered service; your out-of-pocket costs (copays or coinsurance) are based on this rate.
  
  

• Annual Limit: The maximum amount an insurer will pay in benefits per year. The ACA prohibits these limits for essential health benefits—unless a plan is "grandfathered." 

• Balance Billing: Occurs when an out-of-network provider bills you for the difference between their charge and the plan’s allowed amount. In-network providers typically can’t do this for covered services.
  
  

• Co-Payment (Copay): A fixed amount you pay for a service—like $30 for a doctor’s visit—with the insurer covering the rest.
  
  

• Co-Insurance: The portion (e.g., 20%) you pay after meeting your deductible, while insurance pays the remainder.
  
  

• Deductible: The amount you must pay out-of-pocket before your insurance plan starts covering costs. Premiums usually don’t count toward this.
  
  

• Explanation of Benefits (EOB): A document from your insurer detailing how a claim was processed, including amounts paid, denied, and how to appeal.

• Preauthorization (Prior Authorization): Advance approval from your insurer required before certain services (like IOP, PHP, or residential eating disorder treatment) will be covered—not a guarantee, but a necessary step.
  
  

• Superbill: An itemized receipt for services often used when paying out-of-network or self-paying, which may help you seek reimbursement or use an HSA/FSA. Medicare covers superbills for nutrition therapy only in limited cases (e.g., diabetes, kidney disease).
  
  

• Out-of-Pocket Maximum: The cap on how much you pay in a plan year for covered services. After hitting this, your insurer covers 100% of allowable costs. Note: Some plans separate medical and medication expenses.

• Medical Necessity Criteria: Standards used by insurers to decide if a recommended treatment is reasonable and necessary. If approved, services like higher levels of care may be covered.
  
  

• Network Types (HMO, POS, PPO, EPO):
  
  

  • HMO: Restricted to in-network providers, usually needing a PCP and referrals.
    
    

  • EPO: In-network only (except emergencies), but you don’t need a PCP or referrals.
    
    

  • POS: Lower costs for in-network care but allows out-of-network options with higher cost and required referrals.
    
    

PPO: Most flexible—covers in- and out-of-network providers (without referrals) but at higher cost.

For more information, go to  Project HEAL's website.