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Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
Information about all aspects of health care from choosing a doctor and treatment, staying safe in a hospital, to end of life care. Includes how to obtain, choose and maximize health insurance policies.
Answers to your practical questions such as how to travel safely despite your health condition, how to avoid getting infected by a pet, and what to say or not say to an insurance company.

Adverse Determination

An Adverse Determination is a decision by an insurer not to pay for a particular drug or treatment. There can be a variety of reasons for the decision. 

Patients have the right to appeal an Adverse Determination by following the insurer's appeal process.  If that doesn't work, patients generally have a right to appeal to an independent reviewer who is not connected with the insurer.

Appealing an Adverse Determination inside the insurance company is known as appealing internally. Appealing outside the insurance company is known as appealing externally.

Annual Limits

An annual limit is the maximum amount an insurer is required to pay for health care during the policy year. 

Thanks to The Affordable Care Act (also known as "Health Reform 2010" and "Obamacare"), annual limits were eliminated as of January 1, 2014.

Case Manager

Generally speaking, a case manager is a person who works to promote quality outcomes that are also cost-effective.

A case manager who works at a health insurance company may also help educate patients about subjects such as the following:

  • What is covered and what is not covered by your health insurance.
  • How to maximize use of your policy.
  • How to get the medical care you need.

A case manager may also:

  • Help coordinate medical professionals when necessary
  • Work within the company to help bend rules when possible. For example, if your policy covers hospitalization, but not home care, a case manager can help argue on your behalf that the company should pay for much less expensive home care instead of insisting that you enter the much more expensive hospital for treatment.


Certificate of Creditable Coverage

When group health insurance ends, the insurance company is required to give you a statement that includes the date your coverage started and the date it ended. This statement is known as a Certificate of Creditable Coverage. 

If a health insurer does not send a certificate, you are allowed to request it any time up to 24 months after the date coverage ended. 

For more information about Certificates of Creditable Coverage, including what to expect to be in a statement and what to do if you do not receive one, click here

Coordination Of Benefits

Coordination of Benefits provisions eliminate the potential for insureds to obtain reimbursement for medical expenses from more than one insurer when there is more than one health insurance coverage. Without coordination of benefit provisions, an insured could obtain reimbursement for more than 100% of the cost of a medical service.

Industry practice with respect to Coordination of Benefits also helps determine which insurer pays first, and in what amount.

The specifics of how more than one coverage is handled between insurance companies is not generally relevant to the insured because the insured submits the claim to both companies. It is then up to the companies to figure out which one pays how much. However, to give you an idea of how Coordination of Benefits works, the sequence starts as follows:

  • The plan which covers the individual as an employee pays first.
  • The plan covering the individual as a dependent covers second.
  • If both plans cover the individual as a dependent, the plan of the employee whose birthday occurs soonest in the year pays first. This rule ("the birthday rule") applies only if both plans have adopted the birthday rule. If either plan has not adopted the birthday rule, the plan of the male parent will pay first. 

Some employers use an alternative Coordination of Benefits system called Maintenance Of Benefit.

To learn more about how Coordination of Benefits works, click here. Note that Medicare has its own rules with respect to coordination of benefits. To learn about the Medicare rules, click here. To learn how to file a claim when there is more than one coverage, click here.


Co-insurance is the percentage of a covered medical charge that insureds are required to pay. Co-insurance percentages vary from 10% to as high as 25%. . For example,  if there is a charge for a treatment in the amount of $2,000 and your co-insurance is 20%, the insurer will pay is $1,600. You will be required to pay $400.

The concept underlying co-insurance is to encourage insureds to use medical care only when necessary. 

Relationship between Co-Insurance and Deductible: If you also have a deductible which has not yet been paid, reimbursement for a medical expense is first reduced by the amount of the deductible before the co-insurance is calculated. For example: If you have a $250 deductible and an 80% co-pay, with medical expense of $2,000, the calculation would look like this: 

  • You pay: $250 deductible plus 20% of the remainder ($1,750 x 20% = $350) for a total of $600 ($250 deductible plus $350 co-insurance). 
  • The insurance company pays: 80% of the amount due after the deductible $1,750 x 80% or $1,400).

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A co-pay is the amount of money you pay for each visit to a health care provider. Co-pays are usually low dollar amounts, such as $10 or $25.

For a person with a serious medical condition, co-pays can add up very quickly.

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Covered Charges

"Covered charges" are the medical costs that are included in your health insurance policy and which will be paid for by the insurance company. Generally covered medical charges are stated broadly. For example, covered charges may be stated to be "visits to in-network doctors," "drugs and treatments which are medically necessary", or "hospitalization."  

Experimental treatments are generally not covered.  If a service is not a covered charge, the insurer will not pay. The amount of non-covered charges that you pay will not count toward your deductible.




Department Of Insurance

Health insurance is regulated on the state level by each state's Department of Insurance.

To locate the contact information for the regulatory agency in your state, see: offsite link


A deductible is the amount that you pay each year before the insurance company pays anything for your medical expenses or prescription drugs.  Until the deductible is met, you will not receive any reimbursement for your claims.

A deductible is generally payable on an annual, calendar year basis. Deductibles can range from $0 to $6,000 or more.

For example, if you receive a medical bill of $2,000, the bill is your first bill of the calendar year, and your deductible is $500: The insurance company will ignore the first $500 of the bill in calculating the payment and only pay a percentage of the remaining $1500.  You are required to pay the $500.

A deductible reflects the idea that the purpose of health insurance is to cover costs that are unacceptably high. A deductible also helps to keep premiums down because it also eliminates the costs of administering minor claims that an insurance company would have to cover if it paid for 100% of health costs..

For information about what happens if you have both a deductible and co-insurance, click here.

NOTE: Insurers take no interest in the deductible beyond the fact that the insurer doesn't have to pay any money until the deductible is used up. Sometimes doctors are willing to negotiate the amount you have to payand possibly even eliminate payment of the deductible.

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Eligibility refers to whether you are eligible to purchase a particular health insurance policy. It is important to learn whether you are eligible for a type of health insurance policy in which you are interested.

In the health insurance arena, eligibility refers to whether an individual is eligible to obtain a particular health insurance plan.

With the Affordable Care Act (sometimes referred to as ACA or “Obamacare”), insurance companies can no longer deny individuals from purchasing health insurance coverage, based on gender, age, or health status.  However, there are still groups of individuals who are ineligible to purchase health insurance.  For example, individuals who are not lawfully present in the United States and individuals who are incarcerated are not permitted to buy a health insurance plan in the Marketplace.

Eligibility also refers to eligibility for government or other programs that provide health coverage, such as Medicare and Medicaid.  Eligibility for Medicare, Medicaid and other government programs depends on the specifics of the particular program.


Experimental Treatment

The definition of "experimental treatment" varies from policy to policy.

In general, an experimental treatment is one which is not generally accepted in the medical community. For instance, the following tend to be considered experimental:

  • Treatments which are undergoing clinical trials.
  • Treaments for which there are no relevant articles in peer reviewed medical journals (journals in which articles are reviewed by other experts in the relevant field).
  • A treatment which does not have the support of the majority of medical practitioners in the relevant field.
  • A treatment which is being used in another way than has been approved by the FDA or is in general use for the particular medical situaiton.
  • A treatment which is being used in a different body area than the use generally accepted in peer reviewed medical journals.
  • A drug which is used "off label" - the intended use differs from the FDA approved use. 

If the wording of "experimental treatment" is not clear, courts tend to interpret the definition in favor of the insured.

NOTE: If you want to appeal an insurance company decision to deny coverage on the basis that what you want to do is "experimental", click here for a sample letter.

For information about clinical trials, click here.

Explanation Of Benefits

After an insurer processes a claim, it sends you an Explanation of Benefits ("EOB") -- even if the insurer decides not to pay the claim.

EOBs usually contain identifying information, processing details and information about the amount that was billed, the amount the insurer paid, and the amount left for you or another insurer to pay. Medicare and each private insurer have their own EOB form. 

An EOB should arrive within four to six weeks after a charge is incurred. The arrival time can vary depending on how quickly the provider bills the insurer and whether the information is complete in the first filing. 

While Medicare and each private insurer have their own EOB form, EOBs usually contain the following:

identifying information included in an EOB: 

  • Your name
  • The patient's name if different.
  • The insurance ID number (frequently your Social Security number).
  • The group number if your coverage is part of a group plan.
  • A claim number.
  • The date the claim was processed

Processing details included in an EOB: 

Usually in a box or boxes across the page will be:

  • Name of the doctor or other health care provider.
  • Date of service: The date you incurred the charge.
  • Type of service: The type, in very general terms, of medical service that was provided, such as an office visit, laboratory test, or just "health service."
  • Total billed: The amount the doctor or other health care provider charged.
  • Amount covered: The amount upon which the provider will base reimbursement. This can be less that the amount billed if the amount billed is more than the "usual, customary, reasonable" charge the insurance company uses. If the claim is being denied, the amount will be zero. NOTE: Some companies will instead show the "Amount Not Allowed." If this happens, subtract this amount from the total billed to get the "covered charge."
  • Explanation code: If the entire bill is not covered, there will often be a code explaining why. The legend for theses codes will usually be on the bottom or back of the EOB. Explanation code: will often refer to the following explanations:
    • Amount billed exceeds Usual, Reasonable & Customary: Insurance companies generally do not pay a claim in excess of what they consider to be the Usual Customary and Reasonable charge for the service.
    • Duplicate charge: This happens frequently. The physician bills the carrier, then, not having received a payment, re-bills the carrier. Usually, it means the original bill is still being processed.
    • This exceeds the allowed charge for a participating provider. You are not responsible for the excess amount: This means that the physician was a PPO provider, but billed for more than permitted under the PPO contract. Here the insurance company is saying that it won't pay the bill because of the PPO contract. For the same reason, you don't have to pay the amount either.
    • Applied to Deductible: If your deductible hasn't been satisfied, the covered charges will be applied toward it until it is.
    • Co-Insurance: This is the amount you are obligated to pay under the insurance contract. For example, if your policy has 80% coinsurance, 20% of the covered charges will appear in this column.
    • Insurance Company Payment: The amount the insurance company has paid and to whom it has been paid.


If you have questions about or do not agree with the EOB, contact the insurance company.  There will usually be a toll-free number on the bill. For information about how to question an EOB, click here.

NOTE: If you do not agree with charges the insurer does not pay, you have a right to appeal the denial. To learn how, click here.

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With health insurance, an extension is a continuation of health insurance, for a set period of time beyond the termination of a policy, for claims relating to health conditions for which the insurer was paying claims before termination of the policy.  An extension does not cover medical conditions which appear after the termination of a health insurance policy.

Extensions do not generally receive a lot of publicity because insureds do not pay extra for them. In a sense, extensions are free to the insured because no additional premiums have to be paid during the period of the extension.

An extension is different from a continuation of a policy under COBRA. Under COBRA, a health insurance policy continues in force for a period of time beyond which it would otherwise have ended. A COBRA extension only stays in force as long as the premium continues to be paid. Unlike the extension discussed in this article, COBRA covers all health conditions covered by the plan, not just conditions which existed during the term of the original health insurance policy.

Extensions used to be more common than they are today.

Fee-For-Service (Indemnity)

A Fee-For-Service (also known as "indemnity") health insurance plan is traditional health insurance that has been around for over 50 years. The name comes from the original purpose: the idea was to reimburse (or indemnify) people for the portion of medical bills that involves an unacceptable or unbearable loss.

Underlying the concept behind this type of health insurance is that the insured has the choice about which health care professionals to see, when to see them, and in what setting, as well as what drugs and treatments to take.

To learn about  fee-for-service policies, click here


A Formulary is a list of medications an insurer will pay for. 

In order to encourage insureds to purchase less expensive drugs, formularies are often divided into sections with differing tiers. Each tier has a different co-pay you have to pay. For instance, a formulary could have three tiers:

  • Tier 1: New branded drugs which have a high co-pay
  • Tier 2: Branded drugs which have a less expensive co-pay
  • Tier 3: Generic older drugs which have the lowest co-pay.

Since no insurance policy is set in stone, exceptions can be made. If a plan has a formulary and a drug is not on the formulary, an insured can ask that the drug be added to the formulary as an exception in his particular case.

NOTE: If you want an exception:

  • Speak with your doctor or other health care provider. Find out:
    • Would a less expensive drug do the same thing for you?
    • If not, ask the doctor for evidence that will convince the insurance company that the drug is necessary for you. 
  • You can also ask your health care provider to apply for the exception for you.



Lifetime Limits

A lifetime maximum (also known as a "lifetime limit") is the maximum amount the insurance company will pay for health claims by any one insured during his or her lifetime. Once that cap has been reached, the insurer will not pay for any more health care - even if it for an illness which is already covered. 

Health insurance companies often had lifetime maximums of $1,000,000 or higher. Under the Affordable Care Act (ACA or “Obamacare”) health plans issued or renewed on or after September 23, 2010, can no longer include a lifetime maximum.


HMO (Health Maintenance Organization) is a generic term for any type of insurance plan or administrative procedure that attempts to direct the patient's treatment. For instance, the traditional HMO requires that a patient get approval of the insurance comany before seeing a specialist or taking a treatment.

To learn about  HMOs, click here

Medical Necessity (Medically Necessary)

The concept of medical necessity is used by insurers to determine whether to pay for a particular medical treatment. If the treatment is not "medically necessary," the insurer doesn't pay. There  is no clear-cut, industry wide definition of "medical necessity." 

The definition of "Medical Necessity" depends on the context and who is making the decision. The basic concept is that medically necessary services are those services which are reasonable and necessary or appropriate based on current clinical standards of care.

If a drug or treatment is optional, it is not covered. For example, plastic surgery to get rid of lines around the eyes is not "medically necessary" so it is not covered by health insurance.

Out Of Network

A doctor, hospital or other medical provider or a test site that does not contract with a particular health insurance company. 

Out-of-Pocket Maximum (also known as "Stop Loss" or "Cap")

An out-of-pocket maximum is the maximum amount of money that you have to pay out-of-pocket for your medical expenses under a policy each calendar year. After you meet your out-of-pocket maximum, then the insurance company will pay 100% of your medical expenses for the rest of the calendar year.

The amounts you pay for each of the following count towards meeting your out-of-pocket maximum:

Your monthly premiums do not count towards meeting your out-of-pocket maximum. 

After you meet your out-of-pocket maximum, then the insurance company will pay 100% of your medical expenses for the rest of the calendar year. 

For example:

  • You have a plan with a $500 deductible, a 80% co-insurance, and an out of-pocket maximum of $4,000.
  • Then you incur a medical bill of $10,500.
  • First, you would pay your $500 deductible.  Then you would be responsible for 20% of the remaining $10,000, which equals $2,000.  So you have paid a total of $2,500 out-of-pocket.
  • Then you incur another medical bill of $10,000.
  • First, you would be responsible for 20% of the remaining $10,000, which equals $2,000.  However, you have an out-of-pocket maximum of $4,000.  And you have already paid $2,500 towards your out-of-pocket maximum and only have $1,500 to spend until you reach your maximum of $4,000.  So, even though you would normally owe $2,000, you only have to pay $1,500.

Then any additional medical expense that you have during the year will be paid 100% by your insurance company, because you have met your out-of-pocket maximum

As with a deductible, keep in mind that the out-of-pocket maximum only refers to covered charges. So:

  • An out-of-pocket maximum does not count charges for items that are not covered under the plan.
  • An out-of-pocket maximum will not consider any payments which exceed Usual, Customary & Reasonable
  • If your policy includes a limit on number of medical tests, or doctor visits, or other services, the excess are not part of the out-of-pocket maximum.

Palliative Care

Palliative Care is the use of medications and other methods to eliminate or at least minimize pain and other symptoms associated with a serious illness. (Palliative is pronounced pal-lee-uh-tiv)

The palliative care team does the following according to the American Academy of Hospice and Palliative Medicine:

  • Provides relief from pain and other uncomfortable symptoms.
  • Assists in making difficult medical decisions.
  • Coordinates care with doctors other than the specialist taking car eof the disease and helps navigate the often-complex healthcare system.
  • Guides in making a plan for living well, based on your needs, concerns and goals for care.
  • Provides emotional and spiritual support and guidance for the patient and loved ones.

When it first started, palliative care was only given to patients who stopped taking curative treatments. Today, palliative care can be given at any place on the journey - including the same time medical care is given to cure a health condition.

Palliative care can be given anywhere, including at home, in a hospital, in a nursing home or in an assisted living facility.

Palliative care should not be confused with hospice care which is only about care at end-of-life. 

Palliative care can be given by the doctor who treats the disease, by a doctor who specializes in palliative care (a palliative care specialist.) or by a team which includes a palliative care doctor, nurses and other professionals.


POS refers to "Point of Service."  POS is a t ype of insurance plan that depends on where you go for medical care, your "point of service", to determine how much it will pay for a doctor visit, test or treatment.

POS plans are a hybrid of an HMO type plan and a Fee-For-Service (Indemnity) plan. You can receive care within the company's network as if it is an HMO. If you want to go outside the network, you can choose any provider you want. However, you pay a portion of the cost of the service.

To learn more, click here.


A PPO (Preferred Provider Organization) health insurance plan is similar to a traditional Fee-For-Service (Indemnity) plan in that you have unrestricted choice about what health care provider and facility to use, when to see or use them, and what kind of treatment you want. The only requirements are that the care you want has to be a covered benefit, and it must be "medically necessary."  

To learn about PPOs, click here.


"Renewability" refers to whether an insurance policy is guaranteed to be renewable at the insured's option.

If a policy is guaranteed to be renewable, you are guaranteed the right to renew it so long as you pay premiums when due.  Changes in your health do not matter.


Pre-Existing Health Condition

A pre-existing health condition is a health condition which exists at the time an insurance policy is issued. 

The definition of what is considered to be a pre-existing health condition varies from situation to situation.  

Because of the Patient Protection and Affordable Care Act ("Obamacare"), insurance companies can no longer deny individuals from purchasing health insurance coverage because of a pre-existing health condition.





Stop Clause (also known as "Stop Loss Clause")

A "stop clause" in health insurance policies is a contractual limit on the amount you pay out-of-pocket each year. 

Underwriting (What It Is And How It Works)

"Underwriting" is the process by which an insurance company decides whether to “write” (or offer you) an insurance policy, and, if so, at what price (premium). The amount of the premium varies in large part by the amount of risk being insured. (Other factors included in determining the amount of premium include administrative costs, such as the cost of underwriting, and gains/losses from investments).

Health Insurance Underwriting

With the Patient Protection and Affordable Care Act (sometimes referred to as ACA or “Obamacare”), health insurance companies can no longer deny individuals from purchasing health insurance coverage based on gender, age, or health status, so it has changed the underwriting process in the health insurance industry significantly.  

However, the underwriting process still exists in other areas of insurance.  

Life Insurance and Disability Income Insurance Underwriting

Underwriting for a life or disability income insurance policy often involves looking at your medical history and the risks involved in your life.

  • With respect to medical history: The history a company looks at varies from company to company. Most companies look for specific information, such as have you ever had a heart attack. They also ask look to more general information for the recent past. For example, an insurer is likely to ask questions such as: "Have you been to a doctor during the past 24 months? If so, please describe the reason."
  • With respect to risk: Insurers ask about risks that put your life (for life insurance) or health (for health insurance) at risk. For instance, expect that a life insurance application will ask whether your activities involve risk, such as: "Do you sky dive? With health insurance policies, you're likely to be asked whether you smoke or drink alcohol excessively. 
  • There are some restrictions related to the use of genetic information.  For more information, see: Genetic Information Nondiscrimination Act (GINA).

As part of the underwriting process, member insurance companies contact the MIB to learn what other member companies have previously learned about your medical history or risks. 

If you are interested in the history of the word "Underwrite:" Common wisdom says the word goes back to the days when Lloyds of London first started insuring ships. Then, as now, insurance would be provided by a syndicate of insurers made up of individuals willing to take the risk of providing insurance against loss. The person authorizing the assumption of that financial risk would write his name under the description of the risk. The process became known as "Underwriting."

U.S. Department Of Labor

The U.S. Department of Labor is charged with, among other functions:

To contact the Department of Labor:

  • Web site: offsite link
  • Telephone:  866.487.2365. TTY: 877.889.5627
  • Mail: U.S. Department of Labor, Frances Perkins Building, 200 Constitution Avenue, NW, Washington, D.C. 20210

Usual, Customary and Reasonable "(UCR")

"Usual, Customary and Reasonable" ("UCR") is a term used in the context of determining how much an insurer will pay for a particular health care service. The idea behind the term is to provide a standard by which an insurer decides how much to pay for the service provided in a particular geographic area.  The fee is based on what most other local hospitals, physicians or laboratories charge for a similar procedure or service.

Each insurer has its own list of what is Usual, Customary and Reasonable. Companies generally start with statistics compiled by a national organization and then apply their own formulae.

Utilization Management

Utilization Management is the system insurers use to evaluate the necessity, appropriateness and cost of health care provided.

Utilization management occurs through the utilization review process