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Health Journalism Glossary

Insurance Glossary

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  • Accountable Care Organization (ACO) – The federal Centers for Medicare & Medicaid Services (CMS) defines an ACO as a group of doctors, hospitals, and other…
  • ACO investment model – A Medicare initiative for provider organizations in accountable care organizations (ACOs) that is designed to test the use of pre-paid…
  • ACO participants – Organizations that participate in Medicare’s accountable care organization (ACO) investment model program (called AIM ACOs) can be physician practices, federally…
  • ACO Transformation Track – This track is one of two under Medicare’s Community Health Access and Rural Transformation (CHART) Model for rural hospitals. Under…
  • Actual acquisition cost (AAC) – When a drug manufacturer sells a medication to a pharmacy, the AAC is the net cost the pharmacy pays. The…
  • Administrative costs – In health care, the term “administrative costs” refers to the back-office functions that are separate from delivering care, including medical…
  • Administrative services only (ASO) – Administrative services only (ASO) is an arrangement an employer makes with a third party to administer the employer’s health insurance…
  • Admissions per 1,000 – To measure and compare the disease burden of certain populations, health insurers use the admissions per 1,000 metric to show…
  • Advance Beneficiary Notice of Noncoverage (ABN) – An ABN is a notice that a hospital, physician or other provider gives to a Medicare beneficiary before delivering the…
  • Advance premium tax credits (APTCs) – APTCs help consumers lower their monthly health insurance premium payments when buying health insurance on the Affordable Care Act (ACA)…
  • Advanced alternative payment models (Advanced APMs) – Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Congress allowed physicians to earn incentive payments by participating…
  • Affordable Care Act (ACA) – Also known as Patient Protection and Affordable Care Act or “Obamacare,” the ACA became law on March 23, 2010. The…
  • Allowed amount – The allowed amount is the maximum that a health insurer will pay for covered health care service, leaving the insured…
  • Alternative payment models (APMs) – The federal Centers for Medicare & Medicaid Services says physicians participating in alternative payment models would be eligible for financial…
  • Ambulatory care sensitive condition – ACSCs are those for which good outpatient or primary care could prevent the need for hospitalization, or for which early…
  • Arbitration or independent dispute resolution – Under the federal No Surprises Act of 2020, the first step in resolving disputes over surprise bills is negotiations between…
  • Automatic retention – A policy a health insurance exchange uses to prevent coverage interruptions among low-income enrollees. Rather than disenroll people who fail…
  • Average manufacturer price (AMP) – When a drug retailer or wholesaler buys a medication directly from a manufacturer, the AMP is the average price paid.…
  • Average sales price (ASP) – The average sales price is what all purchasers pay to drug manufacturers. ASP includes practically all discounts but is available…
  • Average wholesale price (AWP) – The AWP is what pharmacies pay to buy drugs from wholesalers.
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  • Balance billing – This occurs when a hospital, physician or other health care provider sends a bill to a patient after the patient’s…
  • Behavioral hazard – When used in reference to health insurance, the concept of behavioral hazard defines the behavior that some insured individuals may…
  • Benchmark plan – The Affordable Care Act has two definitions for the benchmark plan. In one definition, a benchmark plan is the second-lowest-cost…
  • Bundled payment – Bundled payment is different from fee-for-service payment. Under bundled payment, physicians, hospitals, and other providers assume the financial risk for…
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  • Capitation or capitated payment – When a health care provider receives a fixed payment for each patient under care, such a payment is called capitation…
  • Case Mix Index (CMI) – Calculation that the federal Centers for Medicare and Medicaid Services uses to reflect the clinical complexity, diversity and resource needs…
  • Centers for Medicare & Medicaid Services (CMS) – Part of the Department of Health and Human Services, this federal agency runs Medicare, Medicaid and the Children’s Health Insurance…
  • Cesarean section (C-section) – Obstetricians and other physicians will perform a Cesarean section to deliver one or more babies when the providers fear that…
  • Children’s Health Insurance Program (CHIP) – The federal CHIP program provides health coverage to children in families with incomes too high to qualify for Medicaid, but…
  • Clinical decision support (CDS) systems – Health insurers use CDS systems to give clinicians and other providers patient- and condition-specific information about the treatment protocols insurers…
  • Co-Ops – Under the Affordable Care Act, Congress called for the Consumer Operated and Oriented Plan Program (co-ops), that would serve as…
  • Commercial determinants of health (CDoH) – The World Health Organization defines commercial determinants of health as “factors that influence health which stem from the profit motive.”…
  • Complexity of care charges – Emergency rooms often charge fees based on the complexity of care needed for each patient. These fees usually are ranked…
  • Comprehensive risk-based plans – Comprehensive risk-based plans or managed care organizations (MCOs) are the most common type of Medicaid managed care arrangement. States using…
  • Concierge medicine – Concierge medicine is a method of care in which an individual physician or group practice of physicians give patients longer…
  • Consumer-directed health plan (CDHP) – The National Health Insurance Survey defines a CDHP as a high-deductible health plan linked to a special tax-advantaged account that…
  • Copay, co-insurance – A copay is a fixed fee that an individual pays for each health care service, such as $15 for primary…
  • Cost burden of high-deductible health plans – In 2026, 200% of the federal poverty level for a one person was $31,920. For families, cost burden is defined as a family’s health care costs excluding premiums of more than 10% of annual family income.
  • Cost sharing – Most Americans who have health insurance have a cost-sharing arrangement with their health insurers because the insured individual pays a…
  • Cost shifting – This occurs when a hospital or other provider charges an insured patient more than it charges an uninsured or underinsured…
  • Critical access hospital – A critical access hospital has 25 or fewer acute inpatient beds, and is located in a rural area and is…
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  • Deductibles – An insurance deductible is an amount an insured individual or family owes for health care services before a health insurance…
  • Defined benefit vs. defined contribution – When a health plan promises specified guaranteed benefits, it’s called a defined benefit. A defined contribution plan pays only a…
  • Dependent coverage – One of the first provisions implemented after Congress passed the Affordable Care Act (ACA) in 2010 was the dependent coverage…
  • Direct and indirect remuneration (DIR) – Direct and indirect remuneration (DIR) fees allow health insurers or pharmacy benefit managers to claw back fees paid to pharmacies…
  • Direct contracting – Direct contracting is an arrangement between a purchaser and a provider to deliver health care services for a select group…
  • Direct primary care – Direct primary care (DPC) is a form of a bundled capitation payment model in which a primary care doctor or…
  • Double burden of disease – The double burden of disease is a term researchers and public health officials use to describe the coexistence of undernutrition…
  • Downside risk – Hospitals, physicians, or other health care professionals have downside risk if they incur costs that are greater than the payments…
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  • Effectuated enrollment – During open enrollment for Affordable Care Act health plans, the federal Centers for Medicare and Medicaid Services (CMS) will use…
  • Embedded deductible – Health insurers embed deductibles when providing family coverage so that each family member has an individual deductible that is lower…
  • Employee welfare benefit plan – The federal Department of Labor defines an employee welfare benefit plan as one that an employer or employee organization would…
  • Employer-group waiver plans (EGWPs) – EGWPs (pronounced egg-whips) are customized health plans under the Medicare Advantage program that are developed exclusively for employers and union…
  • Employment-based insurance – Many Americans who are employed full time get health insurance for themselves and their family members through their employers. The…
  • Enhanced premium tax credits – The enhanced credits are more robust than the original premium tax credits that were available to ACA plan enrollees when the law went into effect in 2014.
  • Episode payment for a procedure – Under this form of bundled payment, an insurer makes a single payment for all services associated with delivering a procedure…
  • ERISA pre-emption – The Employee Retirement Income Security Act (ERISA) of 1974 is one of the most important laws governing employer-sponsored health insurance…
  • Essential health benefits – Essential health benefits are a set of benefits established under the Affordable Care Act to ensure that all plans cover…
  • Evidence-based medicine – Using evidence-based medicine, physicians and other providers make medical decisions according to the best available scientific research and practices.
  • Exchanges or health insurance exchanges – The exchanges are marketplaces under the Affordable Care Act in which individuals and small businesses can purchase health insurance. Some…
  • Excluded services – Excluded services are those that a health insurer deems not to cover under the terms of its contract with an…
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  • Family income level – Under the Affordable Care Act, the federal government uses family income levels to set subsidies for health insurance bought on…
  • Federal poverty level – The federal Department of Health and Human Services says the term federal poverty level (or FPL) is ambiguous and should…
  • Fiduciary responsibility – Since 2021, the fiduciary responsibilities that employers must meet have increased under the federal Employee Retirement Income Security Act (ERISA)…
  • Financial toxicity – The term “financial toxicity” describes the harmful effects that patients suffer when they cannot afford the costs of health care.
  • Flexible spending accounts (FSAs) – Some employers offer FSAs to allow employees to set aside pretax dollars of their own money for their use throughout…
  • Formulary – A formulary (also called a drug list) is a list of prescription drugs that a health insurer or pharmacy benefit…
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  • Global payment – Global payment is a form of capitated payment in which health insurers pay physicians, hospitals and other providers a set…
  • Group model HMO – A group model health maintenance organization (HMO) is one that contracts with a single multispecialty medical group to provide care…
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  • Health care common procedure coding (HCPC) – Is a five-digit numbering system that physicians, hospitals and other health care providers use to standardize professional and outpatient billing…
  • Health care tax deductions – The IRS allows taxpayers to deduct medical expenses, such as copayments, deductibles, coinsurance, hospital and physician bills and medical care-related…
  • Health economics and outcomes research (HEOR) – Health economics and outcomes research (HEOR) is used to measure the cost, effectiveness, and the effects of a treatment or procedure on a patient’s quality of life.
  • Health maintenance organizations (HMOs) – An entity that offers prepaid, comprehensive health coverage for both hospital and physician services. HMOs typically have a closed network…
  • Health savings accounts (HSAs) – An HSA has tax advantages because the funds contributed (usually by an employer) are not subject to federal income tax…
  • Hidden prices and fees – A 2025 report found that Americans using the health care system often do not know how much they will need to pay for care, despite laws requiring hospitals and health insurers to publish those prices in clear language and with accurate data.
  • High out-of-pocket costs – When evaluating employer-sponsored insurance coverage, a household’s spending on out-of-pocket costs includes expenditures for deductibles, copayments and coinsurance for prescription…
  • High premium contributions – When evaluating employer-sponsored coverage, a household’s contributions to the employer’s health insurance premium costs are defined as low or high…
  • High-risk pools – Before the Affordable Care Act (ACA) became effective in January 2014, states offered health insurance coverage to individuals through high-risk…
  • Horizontal integration – Occurs in health care when companies acquire or merge with other similar companies such as when a health system acquires…
  • Hospital referral regions (HRRs) – A hospital referral region is a regional health care market for specialized medical care. Each of the nation’s 305 HRRs…
  • Hospital service areas (HSAs) – A hospital service area is a local health care market where residents get most of their hospital care. In the…
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  • Inpatient Prospective Payment System – The federal Centers for Medicare & Medicaid Services uses the Inpatient Prospective Payment System (IPPS) to pay for health care…
  • Internal and external appeals – The right to appeal health insurers’ adverse decisions is critically important for all consumers, in part because denied claims are…
  • IRS Form 8962 – Some consumers buying health insurance on the Affordable Care Act marketplaces are offered advance premium tax credits (APTCs) to lower…
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  • Lab-developed tests (LDTs) – The FDA defines a laboratory developed test as an in vitro diagnostic test (meaning a test of human blood or…
  • Limited benefit plans – These are a type of health insurance coverage that limits coverage to certain specified health care services or treatments or…
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  • MACPAC – The Medicaid and CHIP Payment and Access Commission (MACPAC) is an advisory committee established in 2009 to review state and…
  • Mandated benefits – These are benefits state or federal laws require of all health insurance policies to provide to insured individuals. The Marketplace…
  • Maternal mortality ratio – Maternal mortality ratio is reported as the number of maternal mortality deaths per 100,000 live births when such a death…
  • Medicaid best-price rule – Medicaid’s best-price rule requires that state Medicaid programs pay the lowest price at which a drug is sold, meaning the…
  • Medicare/Medicaid Disproportionate Share Hospitals (DSH) – The Medicare and Medicaid programs make payments under the DSH program to boost payment for hospitals serving a significantly disproportionate…
  • Medication therapy management – Health insurers and health systems use medication therapy management (MTM) to ensure that patients, particularly the elderly, take appropriate medications.…
  • Merit-based incentive payment system (MIPS) – Under MIPS, Medicare will give participating physicians, physician assistants, nurse practitioners, clinical nurse specialists, and other eligible clinicians a composite…
  • Minimal essential coverage – To meet the individual mandate requirement under the Affordable Care Act, a health insurance plan must meet the minimum of…
  • Moral hazard – When used in reference to health insurance, the term moral hazard describes how a person’s behavior changes once that person…
  • Mortality ratio – When assessing a hospital’s mortality rate, researchers will evaluate the number of patient deaths (mortality) as a ratio that compares…
  • Multiple-employer welfare arrangement (MEWA) – Also known as a multiple employer trust (MET), a MEWA allows a group of employers to combine their contributions to…
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  • National Drug Code – Prescription drugs sold in the United States are identified using a three-segment number called the National Drug Code (NDC) that…
  • Network adequacy – Insurers, consumer advocates and insurance regulators evaluate the adequacy of a physician or hospital network based on the ability of…
  • Networks – Health plans make a distinction between in-network coverage and out-of network coverage. When health plans contract with doctors, hospitals, clinical…
  • Non-claims costs – Non-claims costs are what health insurers pay for cost containment strategies, claims adjustment, sales department salaries and benefits, fees and…
  • Non-communicable diseases (NCDs) – NCDs are often called lifestyle diseases because their origins stem from behaviors humans may be able to control such as…
  • Non-embedded deductible – Health insurers offer non-embedded deductibles when providing family coverage. A non-embedded deductible means the total family deductible must be paid…
  • Non-participating provider – A non-participating provider is an out-of-network physician, hospital, or other health care provider that can charge whatever the market will…
  • Non-preferred drugs – Non-preferred drugs are usually brand-name medications (although in rare instances, there are non-preferred generic drugs). As a result of not…
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  • Participating provider – A participating provider is a physician, hospital, or other health care provider that a health insurer designates as in-network in…
  • Patient dumping – A statutorily imposed liability that occurs when a hospital capable of providing the necessary medical care transfers a patient to…
  • Pharmacy benefit rebates – To control the cost of prescription drugs, pharmacy benefit managers negotiate rebates with drug manufacturers and say they pass these…
  • Pharmacy gag orders – Under the contracts pharmacies have with pharmacy benefit managers, neither side can disclose the actual amounts pharmacies pay or how…
  • Physician Quality Reporting System (PQRS) – This is a reporting program from the federal Centers for Medicare & Medicaid Services (CMS) for physicians and other providers.
  • Political determinants of health – Some health policy experts say politics has such a strong influence on social conditions that affect health outcomes that the…
  • Polygenic risk score – Polygenic risk score is a mathematical formula based on genetic test results that reflect the cumulative effect of many different…
  • Pre-authorization or prior approval – Health insurers often require physicians or patients to get prior approval pre-authorization for expensive diagnostic tests or procedures. Failing to…
  • Preadmission certification – An authorization from a health insurer to a patient for a hospital admission before the patient is admitted. Failing to…
  • Preadmission testing – Health insurers often require patients to get any necessary diagnostic testing done before a non-emergency hospital admission.
  • Preferred drugs – A preferred drug is usually a brand-name medication that a health insurer has clinically reviewed and approved for use based…
  • Pregnancy-associated mortality – Pregnancy-associated mortality is a death while pregnant or within one year of the end of pregnancy, regardless of cause.The pregnancy-related…
  • Pregnancy-related mortality – Pregnancy-related mortality is a death during pregnancy or within a year of the end of pregnancy from a pregnancy complication,…
  • Premium deficiency reserve (PDR) – This is the amount an insurer would need if the expected premiums to be collected would not cover future claims…
  • Premium rate review – State insurance departments use the premium rate review to review and accept, revise or reject health insurers’ rate requests.
  • Premium surplus – Premium surplus is the amount insurers report as profit or reserved capital and calculated by subtracting costs for paying medical…
  • Premium tax credits – Premium tax credits have been available to consumers enrolled in Affordable Care Act (ACA) health insurance plans since the ACA went into effect in 2014.
  • Price transparency – Price transparency refers to a movement to provide consumers with the cost of the individual services of health care, such…
  • Private equity – Private equity companies invest in businesses that turn a profit or have strong cash flow or both. Often, these investors…
  • Private health insurance – Private health insurance refers to coverage bought through a commercial health insurance company or the Affordable Care Act marketplaces.
  • Prospective payment – Used in some payment models when an insurer pays a provider before care is delivered. The amount of payment does…
  • Public option – Early versions of the Affordable Care Act included a public option, in which a government-run health insurer would serve to…
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  • Readmission rates – Beginning in 2012, the federal Medicare program reduced what it pays hospitals with high readmission rates for patients discharged (and…
  • Redetermination – Redetermination is a process each state has used since April 2023 when the Covid-19 Public Health Emergency ended to assess…
  • Reference pricing – Employers and health plans sometimes set a certain price limit (the reference price) when reimbursing employees or plan members for…
  • Reinsurance – During the first three years under the Affordable Care Act (2014 through 2016), the law called for a temporary reinsurance…
  • Relative value units (RVUs) – The federal Medicare program makes payments to physicians based on their relative value units (RVUs), which reflect a relative level…
  • Resource based relative value scale (RBRVS) – In 1992, the federal Medicare program introduced the Resource-based Relative Value Scale (RBRVS) system to quantify physicians’ work and to…
  • Retroactive coverage under Medicaid – Retroactive coverage ensures that someone who is eligible for Medicaid but unenrolled at the time of incurring a health care expense (such as a hospital bill) and is subsequently enrolled can have those expenses covered for 90 days before the official start of enrollment.
  • Retrospective payment – A common form of payment used for fee-for-service payment is retrospective, meaning a provider delivers care, totals the costs for…
  • Risk adjustment – The risk adjustment program under the ACA is permanent and designed to reinforce rules that prohibit risk selection. Under the…
  • Risk pool – The risk pool is a group of individuals who get health insurance from one source, for example those who get…
  • Risk score – Health insurers assign a numeric value to patients when adjusting payment to providers based on the level of illness in…
  • Risk stratification – Health insurers use risk stratification to adjust payments based on differences in patient characteristics. Health plans assign patients to two…
  • Ryan White HIV/AIDS Program – Enacted in 1990, this program is the largest federal program specifically for people with HIV/AIDS and serves more than half…
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  • Second surgical opinion – Health insurers often require patients to get the opinion of a second doctor after one physician has recommended a non-emergency…
  • Section 1115A – Section 1115A of the Social Security Act was added to the Affordable Care Act to establish the Center for Medicare…
  • Self-insured employer – A self-insured employer or purchaser (also called a self-funded employer or purchaser) sets funds aside to pay claims for health…
  • Self-pay patients – A self-pay patient pays a provider for his or her entire charge for a service from the patient’s own funds,…
  • Shared decision making (SDM) – SDM is a process some health plans and provider groups use to help patients and physicians make health care decisions…
  • Shared risk – Under a shared-risk program, the providers would have some loss of funds when spending exceeds an established target. Capitated payment,…
  • Shared savings – In a shared savings program, an insurer will share the savings with a provider or a group of providers if…
  • Shared-savings ACO – A shared-savings accountable care organization (ACO) is a Medicare initiative for physicians, hospitals, and other health care providers seeking to…
  • SHOP Exchanges – The Small Business Health Options Program (SHOP) is designed to help small businesses in every state provide health insurance coverage…
  • Single-payer health care – Single-payer national health insurance is a system in which a single public agency would organize health care financing and replace…
  • Social determinants of health (SDoH) – The federal Office of Disease Prevention and Health Promotion defines SDoH as conditions in the environment where people are born,…
  • Specialty drugs – Specialty pharmaceuticals include bioengineered proteins, complex molecules and can be derived from blood.
  • Specialty pharmacies – These state-licensed pharmacies focus on providing medications for patients with serious health conditions such as bleeding disorders, cancer, cystic fibrosis,…
  • Spontaneous vaginal delivery – A spontaneous vaginal delivery is a natural process that usually does not require significant medical intervention. Such a delivery at…
  • Staff model HMO – A staff model health maintenance organization (HMO) is a type of closed-panel HMO, meaning patients can receive services only through…
  • State-based marketplaces (SBMs) – Outside of the 33 states that use the federal marketplace at www.healthcare.gov, consumers in 17 states and the District of…
  • Surprise medical bills – Surprise medical bills are those that arise when a patient who has health insurance receives care from an out-of-network provider…
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  • The corporatization of health care – In a series of books published in the 1980s, Paul Starr, a professor of sociology and public affairs and the Stuart Professor of Communications and Public Affairs at Princeton University, predicted a future in which corporations would consolidate ownership and control until the U.S. health care system became “an industry dominated by huge health care conglomerates.” 
  • The primary care triple double – To establish a strong foundation for primary care in the United States, researchers borrowed a basketball term, “triple double.” In…
  • Third-party administrator – A third-party administrator (TPA) is an organization that pays claims for a self-insured (or self-funded) employer or other purchaser, but…
  • Tiered network – In a tiered network, health insurers offer financial incentives to encourage health plan members to choose providers in the lowest-cost…
  • Traditional health plan – A traditional health plan is defined as a private health plan that has an annual deductible that is less than…
  • Two-Midnight rule – The Two-Midnight rule is a federal guidance that helps determine how much a Medicare beneficiary owes upon admittance to a hospital.
  • Two-sided risk – The term “two-sided risk” refers to arrangements that physicians, hospitals and other providers have with health insurers in which the…
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  • Universal coverage – Universal health insurance coverage is a goal of the most ambitious health insurance reform plans, particularly single-payer initiatives.
  • Upside risk – Hospitals, physicians or other health care providers have upside risk if they are paid more for services they deliver than…
  • Usual, customary and reasonable (UCR) – This rate is the amount an insurer pays for a certain medical service, and it often varies geographically. It is…
  • Utilization review – Health insurers conduct utilization review (UR) to evaluate the appropriateness of care that physicians or other providers recommend for patients.…
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  • Value-based insurance or value-based insurance design (V-BID) – VBID is a methodology for identifying clinically beneficial screenings, lifestyle interventions, medications, immunizations, diagnostic tests and procedures, and treatments for…
  • Value-based purchasing – Value-based purchasing (VBP) is distinct from value-based insurance design (V-BID) in that VBP is designed to reward health care providers…
  • Vertical integration – Occurs in health care when one company in the supply chain acquires or merges with another company along the chain.…
  • Virtual primary care – Virtual primary care is a term used to describe telemedicine-enabled visits with primary care physicians.

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