Health Reform Glossary of Common Terms

Need some help to understand the terms and language surrounding the health reform discussions happening in Washington and in communities all over the country? Following is a list of definitions to help you better participate in the discussion.

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Access: A person's ability to obtain needed medical care. Access to care is often affected by the availability of health insurance or coverage, the cost of the care, the geographic location or availability of health care clinicians, and the number of clinicians working under contract with a health plan.

Benefit package: Also called Benefits. The specific set of services, such as physician visits, hospitalizations, and prescription drugs that are covered by an insurance policy or health plan. The benefit package will specify any cost-sharing requirements for services, limits on particular services, and annual or lifetime spending limits.

Cost containment: Work being done locally and nationally to control the rising costs of health care including reducing overuse of health services, addressing provider reimbursement problems, eliminating waste, and increasing efficiency in the health-care system.

Cost-shifting: Essentially any practice that shifts costs between payers of health care. Two common forms are 1) those that shift costs between employers and employees (such as increasing copays and coinsurance for employees), and 2) those that shift costs between different lines of business (such as commercial plans and Medicare or Medicaid plans). In 2006, a study showed that this kind of cost shift contributed 15 percent to insurance premiums in the Washington state commercial market.

Delivery-system reform: Private and governmental activities aimed at making or influencing changes in the way that health care is organized and provided to patients. Expanding access to health care, improving quality, and improving patient and clinician satisfaction are the general goals of delivery-system reform. An additional intention is to begin and maintain a system of care that is patient-centered, uses evidence-based best practices, optimizes and efficiently uses technology to balance benefits and costs, and develops strategies that assure that ongoing improvements to the system continue.

Employer pay-or-play: An approach that would require employers to play (offer and pay for health benefits for employees) or pay a specified dollar amount as a fine for not offering health coverage. Currently, two states — Massachusetts and Vermont — and the City of San Francisco impose pay-or-play requirements on employers.

* Employer responsibility: Also referred to as health coverage participation requirements. This generally defines the employer's requirements under an employer mandate. This can include minimum requirements to provide coverage to employees and their dependents or payment of fees, and penalties or contributions to the government or other entity if the employer does not provide this coverage.

Employer mandate: Similar to the pay-or-play mandate. This approach requires all employers (or at least all employers that have a set number of employees or certain level of revenue) to offer health benefits that meet a defined standard. Fines may accompany those employers not offering coverage.

* Grandfathered plans: A provision that allows an individual or family to maintain their current health coverage. A grandfathered plan essentially locks in coverage indefinitely or for at least some period of time. In some reform proposals, grandfathered plans would eventually have to meet benefit and insurance reforms enacted along with health reform.

* Health information exchange: Also connector, gateway, or market facilitator. These generally refer to pooled-purchasing arrangements through which insurers offer insurance plans to individuals, small employers, and in some cases, all employers. These arrangements may be state, regional, or national in scope and will be run with a set of rules related to benefits, participation, and governance. A well-known example is the Commonwealth Connector, created in Massachusetts in 2006. For ease of use, in most cases the word "exchange" is used in the place of health information exchange, connector, gateway, or market facilitator.

Health-insurance reform: Congressional or state legislative activities aimed at fixing life-long inequities, ending unfair practices, and minimizing wasteful practices or uncontrolled cost increases in health insurance or coverage, which have led to an increase in the number of uninsured and under-insured people in our country. Health-insurance reform proposals are generally intended to regulate insurance practices, define benefits, influence or control premium costs, and create public or semi-public entities to sell insurance coverage with the goal of expanding coverage to more people and reducing costs.

Individual mandate: A requirement that all individuals obtain health insurance. A mandate could apply to the entire population or just to children and can make exceptions for some people (such as for hardship reasons). Individuals who do not get insurance may have to pay fines. Massachusetts was the first state to mandate that all adults have health insurance.

* Insurance market reforms: Reforms aimed at the insurance or coverage side of care, not the delivery of care. The most common reforms include guaranteed issue or renewability of plans (the ability get or renew a plan without needing to be prescreened), putting an end to the ability of insurers or health coverage providers to deny coverage to people due to pre-existing conditions, and other discriminatory practices involved in people gaining health benefits based on health status.

Premium subsidies: Subsidies that are provided to help people purchase health coverage, often on a sliding scale, depending on income level. These are usually directly provided by the state or federal government.

* Public plan or option: Also public health insurance option. A new insurance plan administered and funded by the federal or state government that would be offered along with private plans in a newly created health insurance exchange. For ease of use, in most cases we use the term "public option" to reference a public plan or option or public health insurance option.

Single-payer system: A health care system in which a single government entity or program pays for health care services. This entity collects health care fees and pays for all health care costs, but is not involved in the delivery of health care. Under a single-payer system, the delivery of care is not necessarily owned by the government and may be private or a mix of private and public.

Tax credit: A tax credit is an amount that a person or family can subtract from income tax in relation to the purchasing of health care insurance. If a tax credit is a refundable tax credit, the taxpayer can receive an actual payment from the government to the extent that the amount of the credit is greater than the amount of tax they would otherwise owe.

Tax preference for employer-sponsored health insurance: In the current federal tax code, the amount that employers contribute to health benefits are excluded from most workers' taxable income and any contributions made by employees toward the premium cost for health insurance are made on a tax-free basis.

Universal coverage: A system that provides health coverage to all. This can be achieved in a variety of ways. Two common examples are an individual mandate or a single-payer system. Both are intended to provide universal or near-universal coverage.

* Terms created in current reform bills.

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