This article was originally written by the Sequence clinic team (now known as WeightWatchers Clinic).

Common insurance terms and what they mean

Published August 11, 2023

It’s important to understand key terms related to the insurance coverage and provider process, so that you can be a more informed patient. Our team has laid out some of the most common insurance-related phrases and acronyms below:


the percentage of eligible costs (e.g. for a procedure or medication) that insurance will pay towards services after your deductible has been met. For example, if your coinsurance is 15%, you will pay 15% while your insurance provider pays 85% of the cost of covered medical bills.

Commercial insurance:

Commercial health insurance is health insurance provided and administered by nongovernmental entities—usually an employer.

Primary insurance:

The primary insurance company that is responsible for paying the claim first.

Secondary insurance:

The secondary insurance payer that covers the bills not covered by the primary insurance payer. For example, you might have secondary insurance through your spouse’s employer. In some cases, secondary insurances are called “voluntary” or “supplemental” coverage options.


a list of prescription drugs that are covered by a prescription drug plan or insurance plan offering benefits for prescription drugs. Many insurance companies offer a formulary look-up tool, through which you can search to see if a potential prescription will be covered.


a fixed amount you pay for a medication or service that your insurance covers a portion of the cost for. For example, you might pay a $40 copay at each visit with your PCP.


the amount of money you pay out of pocket before coinsurance kicks in.


these are services or medications that are wholly not covered under your policy. Some insurances, for example, have exclusions for weight management medications.

Government insurance:

health insurance provided by the government. This includes Medicare, Medicaid and Tricare.

Out of pocket (OOP):

out-of-pocket costs include deductibles, coinsurance, and copayments for covered services. There is usually an out-of-pocket yearly maximum—if you meet the maximum, covered services are covered at 100% for the rest of your plan year.

Pharmacy Benefits Manager (PBM):

companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers. **Your PBM generally decides how much your medication will cost at the pharmacy.

Prior Authorization (PA):

a form your Care Team fills out requesting coverage for a medication.

Prior Authorization Appeal:

if insurance denies a prior authorization, meaning they say they won’t cover a prescription, you may be able to file an appeal asking them to make an exception and reconsider covering your medication.


the amount of money you pay for your insurance policy (either to your employer every month, or the government).

We hope these terms help you navigate the medical insurance and PBM landscape.

Related Weight Watchers Articles:

How to advocate for your health when visiting your healthcare provider

Are weight-management medications covered by insurance?