The American health care system is one of the most complex and confusing health care systems in the world. Excellent medical care is available here, but to get the most out of your healthcare resources, you need to understand the terms and language used by not only your doctors and nurses, but also your insurance company, your health plan and other health providers. Knowing and understanding these terms will help you make the most of your insurance coverage and help you get the right care.
The difference between being health care literate and not can make an enormous difference in navigating the world of health care and health insurance. As your literacy increases, your options and your ability to understand and make the right choices for you and your family will also increase.
In addition to understanding basic medical terminology (your healthcare providers should always explain your diagnoses and treatments in language you can understand. And if they don’t, never hesitate to ask them to do so), you need to understand the terms used by your insurance company and by the government. Terms such as “advance premium tax credit,” “COBRA,” “copayment,” “medically necessary,” and “managed care” are common terms that are also commonly misunderstood.
To help you improve your health care literacy, and give you the basic terminology you should know and what they mean, you may download a PDF of some of the most common healthcare terms here.
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Advance Premium Tax Credit – A new tax credit provided by the Affordable Care Act to help you afford health coverage purchased through the Marketplace. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit to apply to your premiums each month, up to a maximum amount. If your advance payments for the year are less than the credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments are more than the amount of your credit, you must repay the excess with your tax return. Also called premium tax credit.
Consolidated Omnibus Budget Reconciliation Act (COBRA) – A federal law that may allow you to temporarily keep health coverage after your employment ends, you lose coverage as a dependent of the covered employee, or another qualifying event.
Copayment – An arrangement where an individual pays a specified amount for various health care services and the health plan or insurance company pays the remainder. The individual must usually pay his or her share when services are rendered. Copayments are usually a set dollar amount (such as $20 per office visit), rather than a percentage of the charges.
Managed Care – A system of health care delivery that is characterized by arrangements with selected providers, ongoing quality control and utilization review programs, and financial incentives for members to use providers and procedures covered by the plan.
Medically Necessary – A term used to describe the supplies and services needed to diagnose and treat a medical condition in accordance with the standards of good medical practice. Many health plans will only pay for treatment deemed medically necessary. For example, most plans will not cover elective cosmetic surgery.