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Glossary of Health Insurance Terms

Quick, plain-language definitions — from Agent/Broker to Star Rating.

Agent / Broker
A person licensed to sell health insurance and help consumers apply for coverage. An independent agent, like Cesar, isn't tied to one insurance company and can compare plans across carriers.
Annual Enrollment Period (AEP)
Medicare's yearly window (in the fall) when anyone with Medicare can switch Medicare Advantage or Part D plans for the coming year.
Coinsurance
Your share of a covered service's cost, expressed as a percentage, that applies after you've met your deductible.
Copay (Copayment)
A fixed dollar amount you pay for a specific covered service, regardless of the total cost of that service.
Deductible
The amount you pay for covered services before your insurance starts sharing the cost (preventive care is often an exception).
Effective Date
The date your coverage actually starts — it's often not the same day you enroll.
Essential Health Benefits
The set of categories every ACA-compliant plan must cover, including hospitalization, prescription drugs, maternity care, mental health services, and preventive care.
Explanation of Benefits (EOB)
A statement your insurance company sends after a claim is processed, showing what was billed, what the plan paid, and what you may owe. It is not a bill itself.
Federal Poverty Level (FPL)
A federal income measure, updated annually, used to determine eligibility for subsidies and certain programs. The specific dollar thresholds change every year.
Formulary
The list of prescription drugs a health or drug plan covers, usually organized into cost tiers.
Generic Drug
A medication with the same active ingredient as its brand-name equivalent, typically sold at a lower cost.
Grace Period
A window of time after a missed premium payment during which your coverage can generally continue before it's terminated for non-payment.
Guaranteed Issue
A rule requiring an insurer to offer coverage regardless of health status, during specific windows or circumstances defined by law.
HMO (Health Maintenance Organization)
A plan type that generally requires a primary care physician and referrals to see specialists, with little to no out-of-network coverage.
In-Network / Out-of-Network
Whether a provider has a contract with your plan (in-network, lower cost to you) or not (out-of-network, higher cost or not covered).
Marketplace / Exchange
The system created by the ACA where individuals shop for and enroll in private health plans, often with a subsidy.
Medicare Part A
The part of Original Medicare that covers inpatient hospital care, skilled nursing facility care, hospice, and some home health care.
Medicare Part B
The part of Original Medicare that covers outpatient care, doctor visits, preventive services, and durable medical equipment.
Medicare Part C (Medicare Advantage)
Medicare benefits delivered through a private insurance company instead of directly through the government — see our full explainer.
Medicare Part D
Medicare's prescription drug coverage, available as a stand-alone plan (with Original Medicare) or bundled into many Medicare Advantage plans.
Medigap (Medicare Supplement)
A private policy that pairs with Original Medicare to help cover some of the costs Medicare doesn't pay, like coinsurance and copays.
Network
The specific group of doctors, hospitals, and pharmacies a plan has contracted with — see our full explainer.
Open Enrollment Period
The annual window when anyone can enroll in or change a plan without needing a qualifying life event. Dates vary by year and by program (Marketplace vs. Medicare).
Out-of-Pocket Maximum
The most you'll pay for covered services in a plan year before your insurance covers 100% of further covered costs.
PCP (Primary Care Physician)
Your main doctor for routine care, who — on many plans — also coordinates referrals to specialists.
PPO (Preferred Provider Organization)
A plan type that generally allows seeing specialists without a referral and offers some out-of-network coverage, usually for a higher premium.
Pre-Existing Condition
A health condition that existed before your coverage started. Under the ACA, plans cannot deny coverage or charge more because of one.
Premium
The amount you pay, usually monthly, to keep your health insurance active — separate from what you pay when you actually use care.
Premium Tax Credit (APTC)
The official name for an ACA subsidy — a tax credit, based on income and household size, that lowers your monthly Marketplace premium.
Preventive Care
A defined list of services — like annual checkups and standard screenings — that most ACA-compliant plans cover with no cost-sharing when done in-network.
Prior Authorization
A requirement that your plan approve certain services or medications before you receive them, or before the plan will cover them.
Qualifying Life Event
A specific life change — like losing other coverage, marriage, or having a child — that can trigger a Special Enrollment Period.
Referral
Authorization from your primary care physician to see a specialist, generally required on HMO plans.
Special Enrollment Period (SEP)
A limited-time window to enroll in or change coverage outside of Open Enrollment, triggered by a qualifying life event.
Star Rating
CMS's annual 1-to-5 star quality rating for Medicare Advantage and Part D plans, based on member experience, outcomes, and service quality.