Acronym Exasperation: An Explanation of Common Health Insurance Acronyms

The health insurance industry is permeated with acronyms. These simple three-letter abbreviations may leave you wanting to say four-letter words. A health insurance insider may casually say such nonsense as, "You can use your HSA to pay part of the OOP expenses on your HDHP plan." This stream of three-letter abbreviations sounds like gibberish and might as well be written in hieroglyphics (I'd like to sign up for the flax-owl-lasso plan, please).

If you don't speak "health insurance," you may often feel in the dark. Even worse, you may not fully understand your plan or coverage. Below you will find some common acronyms to help you navigate this foreign tongue. Consider this your Rosetta Stone.

Acronyms for Types of Health Insurance Plans

PPO: Preferred Provider Organization

Preferred Provider Organization plans allow customers to receive care from doctors and hospitals both inside and outside of their network. This type of plan usually provides customers with a list of in-network facilities and physicians who have agreed to a discounted rate. Customers can choose from a list of doctors within their network. Visits to providers outside of the network require additional costs. PPOs are the most prevalent type of health insurance plan enrolling 48% of covered workers.

HDHP: High-Deductible Health Plans

High-Deductible Health Plans (also known by another acronym: CDHP, or Consumer Driven Health Plan) have significantly higher deductibles than other plans. These plans usually cover free preventative services; however, any other costs are first covered by the customer. Once the deductible is met, the insurance company will cover additional charges. Though customers pay for services until they meet their deductible, they receive negotiated rates when going to in-network providers. Visiting out-of-network providers leads to extremely high costs. HDHP plans are become increasing popular, with 29% of covered workers enrolled in 2016.

In addition, these plans may include a (HSA) Health Savings Account. Customers may use this savings account to pay for medical expenses. They may put aside pre-tax money for health expenses. Sometimes employers will also contribute to this account.

HMO: Health Maintenance Organization

Health Maintenance Organization plans allow members to choose from a list of in-network primary care physicians. They do not cover services outside of their network (except in an emergency). Typically customers will need a referral to see a specialist. These plans typically have lower premiums than PPOs. Approximately 15% of health plans are HMOs.

POS: Point of Service

Point of Service plans are similar to HMOs with a notable exception: customers must choose a primary care physician within the plan's network. However, customers may visit doctors out of their network, but they will pay most of the cost. However, if customers are referred to an out-of-network specialist by their primary care physician, their insurance will typical pay more of the cost than with no referral.

EPO: Exclusive Provider Organization

Exclusive Provider Organization plans only cover visits to providers within the plan's network (except in an emergency). Customers do not need a referral to see an in-network specialist with this type of plan. Out-of-network services are not covered.

Other Acronyms

PCP: Primary Care Physician

A primary care physician is your main doctor, often a general practitioner. This doctor typically performs preventative exams and assists with general medical needs.

HSA: Health Savings Account

Health Savings Accounts often accompany HDHPs (see above). You may put pre-tax earnings into this account and use it for qualified medical expenses.

ACA: Affordable Care Act

The Affordable Care Act is the 2010 health care reform law. You can read more about the law here.

CS: Cost Sharing

Cost sharing refers to deductibles, co-payments, and other similar payments. It is the share of costs the customer must pay for covered benefits.

OOP: Out of Pocket

Out of pocket refers to the amount that customers pay, up to a certain maximum, in a year. Once the out-of-pocket maximum is reached the insurance covers all other expenses. Deductibles, co-payments, etc. contribute to this amount. It does not include premiums.

EOB: Explanation of Benefits

An explanation of benefits is a document that describes services received. It helps customers understand their coverage and the amount owed for a given service.

OV: Office Visit

An office visit is when a patient goes to the doctor for a specific medial problem, rather than a general check-up.

CHIP: Children's Health Insurance Program

The Children's Health Insurance Program provides inexpensive insurance for children in low income households who do not qualify for Medicaid. Read more information about CHIP here.

QHP: Qualified Health Plan

Qualified Health Plans meet the requirements described in the Affordable Care Act with specified price limits and covered benefits.

In addition to this list, there are a plethora of other health insurance acronyms. Take time to learn this complex language so you can understand your insurance coverage and benefits. When choosing a health insurance company, you need the most helpful and accurate information. Check out our top rated companies and find the one that best meets your needs here.