News You Can Use: Health Care Glossary

It takes almost a new vocabulary to understand what health care is and how it works. But the definitions below might make the system easier to navigate:

Acute Care: A pattern of health care in which a patient is treated for an episode of immediate and severe illness or disability, such as the treatment of injuries after an accident or other trauma, or during recovery from surgery. Unlike chronic care, acute care is often short-term.

Brand-name drug: When a new drug is developed, the makers get a patent for the drug giving them the right to make that drug without any competition. A brand-name drug is this drug marketed by the original drug maker or manufacturer. A brand-name drug is usually known by its trade name (Advil, for example) rather than for its chemical or generic name (ibuprofen, for example).

Chronic Care: Long-term care of individuals with long-standing, persistent diseases or conditions. It includes care specific to a problem as well as other measures to encourage self-care, promote health and prevent loss of function.

Co-insurance: A method of cost-sharing that requires members to pay a certain percentage of all remaining eligible medical expenses after the deductible amount has been paid.

Co-payment: A method of cost-sharing that requires members to pay a set amount for a specific service, such as $15 for any prescription.

Deductible: A flat amount a member must pay before the insurer, employer or plan administrator will make any benefit payments.

Drug formulary: Each health plan develops its own preferred list of Food and Drug Administration-approved generic and brand-name drugs, called a drug formulary. These drugs generally have the lowest out-of-pocket cost to members. The formulary is chosen by a committee of doctors, pharmacists and other medical experts who consider many cost and quality issues as they make their decisions.

Generic drug (also called generic equivalent or generic substitute): A drug that is the generic, biological equivalent of a brand-name drug. Generic drugs must contain the same active ingredients as the brand name, and must deliver the same amount of medicine into the body in the same way. In most cases, generic drugs can be substituted for brand names without physician approval.

Health Insurance Portability and Accountability Act of 1996 (HIPAA): A federal law passed in 1996 that allows people to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; specify what medical and administrative code sets should be used within those standards; require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and specify the types of measures required to protect the security and privacy of personally identifiable health care.

Health maintenance organization (HMO): A health care system that assumes or shares both the financial risks and the delivery risks associated with providing access to in-network medical services to members in a particular geographic area, usually in return for a fixed, prepaid fee.

Long-term care: Refers to the broad range of medical and personal services for individuals who need assistance with daily activities for an extended period of time.

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