Health Insurance Glossary: 40 Terms Explained in Plain English

Health insurance has its own vocabulary, and it shows up everywhere — on plan comparison pages, bills, EOBs and enrollment forms. Bookmark this page. Each term is explained in plain English, with links to our in-depth guides.

Costs

• Premium — what you pay every month to keep coverage, whether or not you use care.
• Deductible — what you pay for covered care each year before your plan starts sharing costs.
• Copay (copayment) — a flat fee for a service, like $30 for a doctor visit.
• Coinsurance — your percentage share of a bill after the deductible, like 20%.
• Out-of-pocket maximum — the most you’ll pay for covered in-network care in a year ($12,000 individual cap for 2027 Marketplace plans). Full guide.
• Cost-sharing — the umbrella term for deductibles, copays and coinsurance.
• Embedded deductible — on a family plan, each person has their own deductible inside the family total.
• Allowed amount — the price your plan agreed to pay for a service; your share is based on it.
• Balance billing — when an out-of-network provider bills you for the difference between their charge and the allowed amount. See surprise billing protections.

Plan types & coverage

• HMO — in-network only, usually requires a primary care doctor and referrals.
• PPO — flexible, some out-of-network coverage, no referrals.
• EPO — in-network only, usually no referrals.
• POS — hybrid with a PCP and some out-of-network coverage. Compare all four.
• Network — the doctors, hospitals and pharmacies contracted with your plan.
• Metal tiers — Bronze, Silver, Gold and Platinum, showing how costs are split. Explained here.
• HDHP — high-deductible health plan that can be paired with an HSA.
• Catastrophic plan — very high deductible plan for people under 30 or with an exemption. Details.
• Essential health benefits — ten categories of care that ACA plans must cover, including hospitalization, prescriptions, maternity and mental health.
• Formulary — a plan’s list of covered drugs, usually sorted into cost tiers.
• Preventive care — checkups, screenings and vaccines usually covered at no cost in network.
• Short-term plan — temporary coverage that doesn’t follow ACA rules. Pros and cons.

Enrollment

• Open enrollment — the yearly window to sign up or change plans (Nov 1, 2026 – Jan 15, 2027 on HealthCare.gov). Key dates.
• Special Enrollment Period (SEP) — a window, usually 60 days, after a qualifying life event. What qualifies.
• Qualifying life event — a change such as losing coverage, moving, marriage or a birth.
• COBRA — a law that lets you keep job-based coverage after leaving, at full cost. COBRA vs. Marketplace.
• Marketplace (exchange) — HealthCare.gov or your state’s website for buying individual coverage.
• Dependent — a child or other family member covered on your plan; children can stay on a parent’s plan until 26.

Claims & billing

• Claim — a request for payment sent to your insurer by you or your provider.
• Explanation of Benefits (EOB) — your insurer’s statement showing how a claim was processed. How to read it.
• Prior authorization — approval your plan requires before certain services or drugs.
• Appeal — asking your insurer to reconsider a denial. How to appeal.
• External review — an independent review of a denial that the insurer must follow.
• Good Faith Estimate — a cost estimate uninsured or self-pay patients can get before care.
• Summary of Benefits and Coverage (SBC) — a standardized document that makes plans easy to compare.

Accounts & subsidies

• HSA — Health Savings Account; tax-free savings for medical costs ($4,500 self-only limit in 2027). HSAs explained.
• FSA — Flexible Spending Account through an employer; mostly use-it-or-lose-it.
• HRA / ICHRA / QSEHRA — employer-funded accounts that reimburse medical costs or premiums. Explained here.
• Premium tax credit — a subsidy that lowers Marketplace premiums. 2027 limits.
• Cost-sharing reductions — extra savings on Silver plans for incomes up to 250% FPL.
• Federal poverty level (FPL) — the income measure used for subsidy and Medicaid eligibility.
• MAGI — modified adjusted gross income, the income figure the Marketplace uses.

Medicare & public programs

• Medicare Parts A, B, C, D — hospital, medical, Medicare Advantage and drug coverage. Medicare at 65.
• Medigap — supplemental insurance for Original Medicare. Advantage vs. Medigap.
• Medicaid — free or low-cost coverage for people with limited income. Medicaid in 2027.
• CHIP — low-cost coverage for children in working families. CHIP explained.

Frequently asked questions

What’s the difference between a deductible and an out-of-pocket maximum?

The deductible is what you pay before the plan starts sharing costs. The out-of-pocket maximum is the most you’ll pay in total for the year, including the deductible, copays and coinsurance.

Where can I find these terms for my own plan?

Your plan’s Summary of Benefits and Coverage lists your deductible, copays, coinsurance and out-of-pocket maximum in a standard format. You can find it in your online account or request it from your insurer or HR.

Sources: HealthCare.gov glossary; CMS; IRS. For education only — not insurance advice. Last reviewed October 2026.