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Health Insurance Glossary

As you look at our plans or get a quote, you may see concepts and terms that are unfamiliar. To help you make smarter healthcare decisions, we've put together a list of common concepts and terms.

Once you have become a Blue Shield member, please refer to your Evidence of Coverage/Policy for the official definitions of these terms.



Allowable Amount – The total dollar amount Blue Shield has established for the benefits the member has received.

Benefits (covered services) – The medically necessary services and supplies covered by the health plan.

Coinsurance – The percentage amount a member pays for benefits after meeting any calendar year deductible.

Copayment (copay) – The dollar amount a member pays for benefits after meeting any applicable calendar year deductible.

Deductible – The amount a member pays each calendar year for most covered services before Blue Shield begins to pay. Specific covered services, such as preventive care, are covered before a member reaches the calendar year deductible.

Evidence of Coverage or Policy – The contract that describes the benefits (or covered services) of the health plan.

Formulary – The list of preferred medications maintained by Blue Shield for its prescription drug benefits. This list includes both generic and brand-name drugs approved by the federal Food and Drug Administration (FDA).

HMO (Health Maintenance Organization) – A HMO provides comprehensive health care by network physicians to enrolled individuals and families in a particular geographic area. It is financed by fixed periodic payments determined in advance. In an HMO, you need to access care through a designated Personal Physician to receive coverage.

Network (or Provider Network) – A group of providers, which includes doctors and hospitals, where each has agreed by contract with Blue Shield to provide covered services to members of a given health plan.

Non-Participating (Non-Participating Provider)
A provider, which includes doctors and hospitals, that has not agreed by contract with Blue Shield to provide covered services to members of a given health plan. A Non-Participating Provider can bill the member for the balance of any amount not covered by Blue Shield.

Participating providers / provider network – A provider, which includes doctors and hospitals, that has agreed to contract with Blue Shield to provide covered services to members of a given health plan. A Participating Provider has agreed to accept Blue Shield’s contracted rate as payment in full for covered services.

Personal Physician – In an HMO plan, a personal physician provides both primary care services to the member and refers, authorizes, supervises, and coordinates other covered services for the member. Each member must select his or her own personal physician.

PPO (Preferred Provider Organization) – Blue Shield PPO plan members receive full coverage by using doctors and hospitals within the PPO network ("preferred providers"), but can also pay more to have the freedom to go outside of the network for care ("non-preferred providers").

Premium – The amount you pay each month to Blue Shield for your health coverage plan.

Provider – A provider includes any health care or mental health professional or facility, such as a physician, hospital, skilled nursing facility, medical equipment supplier, laboratory, pharmacy, physical therapist, clinical psychologist, or licensed marriage and family therapist.

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