Chapter 6: Types Of Health Policies Flashcards
Accidental bodily injury
And unforeseen an unintended injury that resulted from an accident rather than a sickness.
Cafeteria plan
Type of employee benefit plan that allows insureds to choose between different types of benefits
Cancellation
Termination of an in force insurance policy, but either the insured or the insurer, prior to the expiration date shown in the policy.
Comprehensive coverage
Health insurance that provides coverage for most types of medical expenses.
Deductible
A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits.
Lump sum
A pay out method that pays the beneficiary the entire benefit in one payment.
Nonrenewal
Termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy.
Riders
Added to the basic insurance policy to add, modify or delete policy provisions.
Sickness
An illness, which first manifests itself while the policy is in force.
Tax exempt
Not subject to taxation.
Underwriting
Risk selection and classification process.
Medical expense insurance
This type of insurance pays benefits for medical, surgical, and hospital costs.
What type of coverages are often referred to as first-dollar coverage?
Basic expense: The three basic coverages [hospital, surgical and medical] because they usually don’t require the insured to pay a deductible.
Explain basic hospital expense coverage
Hospital expense policies cover hospital room and board, and miscellaneous hospital expenses, such as, lab and x-ray charges, medicines, use of operating room and supplies, while the insured is confined in a hospital.
Are there any deductibles on the limits on room and board for basic hospital expense coverage?
No. There is no deductible and the limits on remember where I set an express a five dollar amount per day up to a maximum number of days.
Explain miscellaneous hospital expenses
The miscellaneous hospital expenses normally have a separate limit. They can be expressed either as a multiple of the room and board charge or as a flat amount. The policy may specify a maximum limit for certain types of expenses, such as $100 for drugs or $150 for use of the operating room. The hospital miscellaneous expense limits may not pay for the full amount needed by the insured in the event of a lengthy hospital stay.
What is another name for basic medical expense coverage and what does it provide?
Basic medical expense coverage is often referred to as basic physicians’ nonsurgical expense coverage because it provides coverage for non-surgical services a physician provides. There is no deductible with benefits, but coverage is usually limited to the number of visits per day, limit per visit, or limit per hospital stay.
In addition to nonsurgical physicians expenses, what can basic medical expense coverage be purchased to cover?
Basic medical expense coverage can be purchased to cover emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses expenses.
Explain basic surgical expense coverage
Basic surgical expense coverage is commonly written in conjunction with hospital expense policies. These policies pay for the cost of surgeons services, whether the surgery is performed in or out of the hospital. Coverage includes surgeon’s fees, and anesthesiologist, and the operating room when it is not covered as a miscellaneous medical item.
In each Basic surgical expense contract, what does the surgical schedule list?
Each contract has a surgical schedule that list the type of operations cover and their assigned dollar amounts. If the operation is not listed, the contract may pay for a comparable operation. Special schedules may express the amount payable as a percentage of the maximum benefit, list a specified amount, or assign a relative value that when multiplied by its conversion factor gives the benefit payable.
What is relative value approach?
When the relative value approach is used, each surgical procedure would be assigned a number of points that are relative to the number of points assigned to the maximum benefit. The maximum points are usually assigned to major surgical procedures, such as open-heart surgery.
What is conversion factor?
Conversion factor represents the total amount payable per point value.
For example, if the conversion factor was 10, the policy would pay $2000 for the appendectomy (200x10) and $10,000, the maximum benefit, for the open heart surgery (1,000x10).
What additional coverages does the major medical expense policies offer as a broad range of coverage as opposed to the limited coverage available under a basic medical expense policies?
The broad range of coverage under The major medical expense policies offer:
Comprehensive coverage for hospital expenses [room and board and miscellaneous expenses, nursing services, physician services, etc.];
Catastrophic medical expense protection;
Benefits for prolonged illness or injury.
Does major medical expense policies carry deductibles?
Yes. There is also a lifetime benefit per person limit. These policies do carry deductibles, coinsurance requirements, and large benefit maximums.
Why are the two common types of major medical policies available?
- Supplemental major medical policies and;
2. Comprehensive major medical policies
Explain supplementary major medical policies.
Supplementary major medical policies are used to supplement the coverage payable under a basic medical expense policy. After the basic policy pays, the supplemental major medical will provide coverage for expenses that were not covered by the basic policy, and expenses that exceed the maximum.
After the limits of the basic medical expense policy are exhausted, what must the insured pay before the major medical coverage will pay benefits?
The insured must pay a Corridor deductible before the major medical coverage will pay benefits. The Corridor deductible derives its name from the fact that it is applied between the basic coverage and the major medical coverage.
What is health maintenance organizations (HMOs)?
By means of a health maintenance act of 1973, Congress strongly supported the growth of health maintenance organizations in this country. The act forced employers with more than 25 employees to offer the HMO as an alternative to their regular health plans.
What is the main goal of the HMO act?
The main goal of the HMO act was to reduce the cost of health care by utilizing preventative care.
What do the HMOs and preventative care services offer?
While most insurance plans offered no benefits for preventative care prior to 1973, HMOs offer free annual check ups for the entire family.
HMOs hope to catch diseases in the earliest stages, when treatment has the greatest chance for success. The HMOs also offer free or low-cost immunizations to members in an effort to prevent certain diseases.
What does the HMO limited service area mean?
The HMO limited service area means that if individuals live within the boundaries, they are eligible to belong to the HMO, but if they do not live within the boundaries they are in eligible.
Explain HMO limited choice of providers.
The HMO tries to limit costs by only providing care from physicians that meet their standards and are willing to provide care at a pre-negotiated price.
Copayments
A copayment is a specific part of the cost of care or a flat dollar amount that must be paid by the member.
Explain HMOs prepaid basis.
HMOs operate on a capitated basis: The HMO receives a flat amount each month attributed to each member, whether they see a physician or not. In essence, it is a pre-paid medical plan. As a member of the plan, you will receive all services necessary from the member physicians and hospitals.
Will a Primary care physician (PCP) be compensated for being responsible for care of a member if care is not provided?
Yes. A PCP will be compensated for being responsible for the care of a member, whether care is provided or not. It should be in the primary care physician’s best interest to keep this member healthy to prevent future time for treatment of disease.
What must happen for a member to get to see a specialist physician?
A primary care physician [PCP]/gate keeper must refer the member.
The referral system keeps the member away from high-priced specialist unless it is truly necessary.
_______________ must be provided for the member in or out of the HMOs service area.
“Emergency care” must be provided for the member in or out of the HMOs service area. If emergency care is being provided for member outside the service area, the HMO will be eager to get the member back into the service area so that can be provided by salaried member physicians.
