Glossary of Key Terms in Health Care Reform


Health care reform is complex and some of the terms and concepts may be unfamiliar. Here are some of the more frequently used terms and their definitions.

Consumerism or consumer-driven health plan
Consumerism describes a relatively new way of thinking about health care that is gaining momentum. It is founded largely on the belief that consumers want more control over their health care decisions and how their health care dollars are spent. It also is based on the belief that with increased tools, information, support, and incentives, consumers will be more engaged in their own health matters and live healthier lives. Studies show that more than 50 percent of health care costs result from an individual’s behavior.

In addition, consumerism has gained acceptance with the public through the growing availability of a new type of health plan, often called a consumer-driven health plan or CDHP. This plan pairs high deductibles with low premiums and a pretax savings account that can be used for health services or saved for future health expenditures.

Cooperatives
Cooperatives are an idea introduced by Senator Kent Conrad (D-ND) that is modeled after rural electricity, farming, and telephone cooperatives that are owned and organized by members. These nonprofit state or regional health care entities would negotiate rates with health care providers, and have the same benefit plans and licensing and regulatory requirements as private insurance companies. Supporters of cooperatives believe they would offer a competitive way to deliver health care without being run by the government.

Employer-based health care
Employer-based health care refers to health plans that are offered at the workplace for employees. Currently, 170 million Americans receive their health insurance coverage through an employer-based plan. In most cases, employees share some of the costs of the plan with their employer through a payroll deduction. The total cost of these plans is generally a lot less expensive for the employee than if he or she were to purchase the coverage individually.

Evidence-based medicine
Evidence-based medicine is a method of improving and evaluating patient care. It involves combining the best research evidence with the patient's values to make decisions about medical care. Looking at all available medical studies and literature that pertain to an individual patient or a group of patients helps doctors properly diagnose illnesses, choose the best testing plan, and select the best treatments and methods of disease prevention. Using evidence-based medicine techniques for large groups of patients with the same illness, doctors can develop practice guidelines for evaluation and treatment of particular conditions. In addition to improving treatment, such guidelines can help individual physicians and institutions measure their performance and identify areas for further study and improvement.

Exchanges
An exchange is a national or state-by-state marketplace where consumers and small businesses can simply and quickly shop for health insurance and compare products and prices. Exchanges would work with state insurance departments to set and enforce insurance reforms and protections. If a public plan is offered, it would be included in the health exchange, along with private insurance plans.

Government-run plan
A government-run health plan, also known as a public or single-payer plan, is modeled after Medicare, which provides individuals health care through the federal government, rather than from a private insurance company. Individuals pay premiums for this coverage, and people who can’t afford coverage have some type of government subsidy. Some proposals under debate in Congress include national or state “exchanges” that allow consumers to choose the government plan or private insurance.

Health Information Technology
Also referred to as electronic medical records, health information technology is a system that allows medical professionals to store patient information electronically rather than on paper. Reform advocates point to this system’s great potential to achieve savings while improving the quality and efficiency of health care services.  

Individual mandate
In the context of health care reform, a much-discussed idea is an individual mandate, which would require all Americans to have health insurance coverage. In turn, everyone would be guaranteed coverage, regardless of age or preexisting conditions.

Markup
Markup refers to the meeting of a legislative committee that reviews the text of a bill before reporting it out. Committee members offer and vote on proposed changes, which are referred to as amendments, to the bill's language. Most markups end with a vote to send the new version of the bill to the floor for final approval.

Medicaid
Medicaid provides health coverage to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law. The eligibility rules vary from state to state. Medicaid sends payments directly to providers for individuals and/or families who qualify. However, depending on state rules, beneficiaries may pay a copayment for some medical services.

Medicare
Medicare is a government program that provides medical care to seniors (individuals aged 65 and older). People of all ages with certain diseases also qualify for Medicare (e.g., end-stage renal disease). Today, approximately 45 million seniors are covered by Medicare. Medicare is broken down into four parts: hospital insurance (Part A), medical insurance (Part B), the Medical Advantage Plan (Part C), and the newer Prescription Drug Coverage (Part D). The Medicare Advantage Plan is a health plan option offered through private insurance companies. In most cases, there are extra benefits and lower copayments than in the Original Medicare Plan.

Medicare Advantage
Medicare Advantage plans are part of traditional Medicare but are offered through private insurance companies. They can include a variety of health plans such as HMO or PPO, prescription drug plans, as well as wellness and prevention benefits. Approximately 10 million, or 25 percent of Medicare-eligible seniors are enrolled in Medicare Advantage plans.

Preexisting condition
A preexisting condition is defined as any condition, illness, or injury for which medical advice or treatment was recommended or received before a person obtains health insurance. Most individual health policies exclude coverage for these conditions for a period of time, often a year or more. Examples of preexisting conditions include diabetes, heart disease, and cancer.

S-CHIP — State-Children’s Health Insurance Program
S-CHIPs are state-run programs that provide health insurance to uninsured children and teens who are not eligible for or enrolled in Medical Assistance, and whose families cannot afford private insurance. S-CHIP is administered by licensed private health insurance and regulated by state insurance departments.

Senate HELP Committee
The Senate HELP (Health, Education, Labor, and Pensions) Committee is one of two committees in the Senate, along with three in the House, drafting health care reform legislation this summer. This committee has broad jurisdiction over the operation of our nation’s health care, schools, employment, and retirement programs. Before his passing, Sen. Edward Kennedy (D-MA) chaired the committee. Sen. Tom Harkin (D-IA) has taken over this role.

Single-payer health care
In a single-payer health care system, the government collects money, primarily through tax revenue, and pays all the health care bills for its citizens. Countries with a single-payer system include Canada, the United Kingdom, and Sweden.

Uninsured
There are currently 46 million Americans who do not have health insurance. In addition to those who can’t afford health care, millions more are “underinsured” and struggle to pay medical bills or go without needed care because of cost. Covering the uninsured is one of the key objectives of health care reform.

The information on this web site is not intended to provide either legal or tax advice. Readers should consult with their legal counsel or professional advisors to determine the effects of all statutes and regulations on their plans.