What Does It All Mean?

Do you know the difference between a deductible and a copayment? To get the most from your health benefits, it’s important to understand what’s alike and different about these, and other, terms.

Lean on this glossary of terms when you need a small (or large) refresher.



Allowed Amount

Maximum amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance” or “negotiated rate.” If your provider charges more than the allowed amount, you may have to pay the difference. (See Balance Billing.)


A request for your the plan administrator or plan to review a decision or a grievance again.

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Balance Billing

This is the amount you’ll pay when a provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. A preferred provider may not balance bill you for covered services.

Brand-name Drugs

Drugs that are manufactured and marketed under a product name by a pharmaceutical company.

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Complications of Pregnancy

Conditions due to pregnancy, labor and delivery that require medical care to prevent serious harm to the health of the mother or the fetus. Morning sickness and a non-emergency caesarean section aren’t complications of pregnancy.


The amount you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service and can be a percentage of the cost or a specific dollar amount.

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The amount you owe for health care services your plan covers before plan benefits begin. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services, such as for some preventive care.

Durable Medical Equipment (DME)

Equipment and supplies ordered by a health care provider for everyday or extended use. Coverage for DME may include oxygen equipment, wheelchairs, crutches or blood testing strips for diabetics.

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Emergency Medical Condition

An illness, injury, symptom or condition so serious that a reasonable person would seek care right away to avoid severe harm.

Emergency Medical Transportation

Ambulance services for an emergency medical condition.

Emergency Room Care

Emergency services you get in an emergency room.

Emergency Services

Evaluation of an emergency medical condition and treatment to keep the condition from getting worse.

Excluded Services

Health care services that your plan doesn’t pay for or cover.

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A formulary is a preferred list of FDA-approved prescription drugs and supplies developed by Express Scripts’ Pharmacy and Therapeutics Committee (an independent group of pharmacists and physicians from a broad range of medical specialties). Drugs and supplies are included in the formulary based on their clinical and cost effectiveness. Formulary drugs are used as a guide for determining the amount of your payment for each prescription, with drugs on the formulary typically available at a lower copayment.

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Generalists include family, general practice, internal medicine, OB/GYN or pediatric physicians; all other providers are considered specialists—including chiropractors and occupational/physical therapists.

Generic Drugs

Prescription drugs that have the same chemical components as brand-name drugs and meet the same quality and safety standards.


A complaint that you communicate to your plan administrator.

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Habilitation Services

Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.

Home Health Care

Health care services a person receives at home.

Hospice Services

Services to provide comfort and support for persons in the last stages of a terminal illness, and their families.


Care in a hospital that requires admission as an inpatient and usually requires an overnight stay. An overnight stay for observation could be outpatient care.

Hospital Outpatient Care

Care in a hospital that usually doesn’t require an overnight stay.

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In-Network Providers (see Network)

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Medically Necessary

Health care services or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.

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The facilities, providers and suppliers your plan has contracted with to provide health care services.

Non-Preferred Provider

A provider who doesn’t have a contract with your plan to provide services to you. You’ll pay more to see a non-preferred provider. Check your policy to see if you can go to all providers who have contracted with your plan, or if your plan has a “tiered” network and you must pay extra to see some providers.

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Out-of-Pocket Maximum (or Limit)

The most you pay during a policy period (usually a calendar year) in deductibles and copayments for covered services before your plan begins to pay 100% of the allowed amount. After you have paid this much in deductibles and copayments, the plan pays 100% for covered services for the remainder of the calendar year. This limit never includes your premium, balance-billed charges or health care your plan doesn’t cover.

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Physician Services

Health care services a licensed medical physician (M.D./Medical Doctor or D.O./Doctor of Osteopathic Medicine) provides or coordinates.


A benefit your employer, union or other group sponsor provides to you to pay for your health care services.


A decision by your plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization isn’t a promise your plan will cover the cost.

Preferred Provider

A provider who has a contract with your plan to provide services to you at a discount. Check your policy to see if you can see all preferred providers or if your plan has a “tiered” network and you must pay extra to see some providers. Your plan may have preferred providers who are also “participating” providers. Participating providers also contract with your plan, but the discount may not be as great, and you may have to pay more.


The amount that must be paid for your plan. You and/or your employer usually pay it monthly, quarterly or yearly.

Prescription Drug Coverage

Plan that helps pay for prescription drugs and medications.

Prescription Drugs

Drugs and medications that by law require a prescription.

Primary Care Physician

A physician (M.D./Medical Doctor or D.O./Doctor of Osteopathic Medicine) who directly provides or coordinates a range of health care services for a patient.

Primary Care Provider

A physician (M.D./Medical Doctor or D.O./Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist or physician assistant, as allowed under state law, who provides, coordinates or helps a patient access a range of health care services.


A physician (M.D./Medical Doctor or D.O./Doctor of Osteopathic Medicine), health care professional or health care facility licensed, certified or accredited as required by state law.

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Reconstructive Surgery

Surgery and follow-up treatment needed to correct or improve a part of the body because of birth defects, accidents, injuries or medical conditions.

Rehabilitation Services

Health care services that help a person keep, get back or improve skills and functioning for daily living that have been lost or impaired because the person was sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.

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Skilled Nursing Care

Services from licensed nurses in your own home or in a nursing home. Skilled care services are from technicians and therapists in your own home or in a nursing home.


A physician who focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions (including chiropractors and occupational/physical therapists). A non-physician specialist is a provider who has more training in a specific area of health care.

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UCR (Usual, Customary and Reasonable)

The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount.

Urgent Care

Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.

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About This Glossary

This glossary has many commonly used terms, but isn’t a full list. If any of these terms have a slightly different definition when used in your policy or plan, your policy or plan’s definition governs. Additionally, health care reform legislation requires that you have access to this Glossary of Health Coverage and Medical Terms in its entirety.