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Finance 3300 > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

What are the healthcare costs per person?

A

$13,375

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2
Q

How much more are American healthcare costs per person in comparison to those of the 24 industrialized European and North American countries?

A

twice as much

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3
Q

What percent of the GDP was spent on medical expenditures in 2016? 2025?

A

18.1%; 20%

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4
Q

What percent of health care dollars goes towards administrative costs in the U.S.? In Canada?

A

11%; 1%

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5
Q

When was the Patient Protection and Affordable Care Act passed?

A

3/23/2010

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6
Q

When was the Health Care and Education Reconciliation Act passed?

A

3/30/2010

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7
Q

The Obama administration believed that the reforms outlined in the two acts it passed would (3)

A

reduce long-term growth of healthcare costs; expand coverage to 32 million people; set minimum coverage standards

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8
Q

Children can stay on their parent’s plan until the age of

A

26 under the ACA (previously was 25)

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9
Q

What were some of the tax changes made when the ACA was introduced? (4)

A

increased Medicare tax; new 3.8% investment income tax; excise tax on “Cadillac” plans; monetary penalty/tax if you don’t have coverage

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10
Q

Who pays the vast majority of healthcare costs?

A

3rd parties pay a vast majority as opposed to actual consumers of health care

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11
Q

What incentives are being established to reduce high healthcare costs?

A

incentives are being established for preventative and services provided out of the hospital where medically acceptable

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12
Q

How many Americans don’t have health insurance?

A

33 million Americans

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13
Q

How much does the U.S. spend on healthcare?

A

$3.4 trillion

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14
Q

What percent of Americans are older than age 25?

A

40%

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15
Q

Disability income protects

A

your ability to earn an income

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16
Q

Group plans comprise what percentage of all health insurance?

A

90%

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17
Q

Most group plans are sponsored by whom?

A

employers — they pay part or most of the cost

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18
Q

HIPAA stands for

A

Health Insurance Portability and Accountability Act

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19
Q

When was HIPAA passed?

A

1996

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20
Q

What does HIPAA do?

A

provides federal portability standards, nondiscrimination in health insurance, and guaranteed renewability

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21
Q

Can you supplement your group policy?

A

Yes

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22
Q

When should you supplement your group policy?

A

Recommended when your policy fails to provide all benefits needed

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23
Q

What is the coordination of benefits?

A

benefits received from all sources are limited to 100% of allowable medical expenses

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24
Q

Give an example of when the coordination of benefits applies.

A

when a husband and wife both have policies

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25
Q

COBRA requires

A

many employers to offer employees and dependents the option to continue their group coverage

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26
Q

COBRA applies for how many months following a divorce?

A

36 months

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27
Q

COBRA applies for how many months to private company employees?

A

18 months

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28
Q

COBRA applies for how many months to state and local government employees?

A

18 months

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29
Q

Does COBRA apply to federal government employees?

A

No

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30
Q

A good health insurance plan should cover at least how many days in a hospital room?

A

120 days

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31
Q

A good health insurance plan should provide what lifetime maximum for each family member?

A

$1 million

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32
Q

A good health insurance plan should pay at least what percent of out-of-hospital expenses?

A

80% of out-of-hospital expenses after yearly deductible of $1,000/person or $2,000 per family is met

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33
Q

A good health insurance plan should limit your out-of-pocket expenses to

A

no more than $4,000 to $6,000 per year

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34
Q

What are the three components of basic coverage?

A

hospital expense insurance; surgical expense insurance; physician expense insurance

35
Q

Define hospital expense insurance.

A

hospital room, board and other charges

36
Q

Define surgical expense insurance.

A

surgeon’s fee for an operation

37
Q

Define physician expense insurance.

A

physician’s care such as office visits, lab tests, and X-rays (excluding surgery)

38
Q

Define major medical expense insurance.

A

covers large expenses for a serious injury or long-term illness above basic coverage

39
Q

What are the two features of major medical expense insurance?

A

has a deductible, coinsurance and stop-loss provision; large maximum benefits

40
Q

Define comprehensive major medical insurance. (2)

A

very low deductible offered without a separate, basic plan; covers hospital, surgical and other bills

41
Q

Define dread disease and cancer insurance policies. (3)

A

focus on unrealistic fears and only pays out for very specific conditions; often sold by people working on commission; very poor value generally

42
Q

Define hospital indemnity. (2)

A

pays a fixed cash amount for each day you are in a hospital (AFLAC); best for people in high-risk groups

43
Q

Define dental expense insurance.

A

covers exams, cleaning, x-rays, fillings, root canals and oral surgery

44
Q

Define vision care.

A

exams, contact lenses and glasses

45
Q

(T/F) Long term care insurance is a new concept.

A

True, it was virtually unknown 50 years ago

46
Q

What percentage of people over the age of 65 need long term care insurance?

A

70%

47
Q

What are the long term care insurance premiums?

A

between $2,000 and $6,000 per year

48
Q

What is the national average cost for 1 year in a nursing home?

A

$88,000

49
Q

A long term care insurance plan pays for how many years?

A

2-6 years up to a dollar limit

50
Q

What is a guaranteed renewable? (2)

A

insurer must renew the policy, regardless of your personal health; premium increases only allowed for a “class” of insureds

51
Q

Reimbursement vs. indemnity

A

actual dollars vs. benefits, regardless of cost

52
Q

Inside limits vs. aggregate limits

A

dollar maximum per procedure vs. overall dollar maximum over one’s lifetime

53
Q

What are out-of-pocket limits a.k.a. stop-loss?

A

limit total deductibles and coinsurance per insured per year

54
Q

What is RCN?

A

reasonable, customary, and necessary

55
Q

Blue Cross offers

A

hospital care benefits

56
Q

Blue Shield offers

A

surgical and medical services benefits performed by physicians

57
Q

What is managed care? (2)

A

prepaid health plan; includes HMOs or PPOs

58
Q

What does HMO stand for?

A

health maintenance organization

59
Q

Describe the features of HMOs. (3)

A

contracts with selected care providers; fixed prepaid monthly premium; focus on prevention and wellness to reduce costs

60
Q

What does PPO stand for?

A

preferred provider organization

61
Q

Describe the features of PPOs.

A

several providers to choose from; costs more than an HMO but more choice and fewer restrictions

62
Q

What is an exclusive provider organization?

A

extreme type of PPO that offers no reimbursement if outside provider is used, except for emergency care

63
Q

What is a point-of-service plan (POS)?

A

insured selects PCP who controls referrals

64
Q

What is Medicare?

A

federal health program for 65+ and people with disabilitys

65
Q

What is Medicare Part A?

A

compulsory part that covers inpatient hospital + skilled nursing costs, home health care and hospice care, including doctor fees

66
Q

What is the 2018 Medicare deductible?

A

$1,340

67
Q

What is Medicare Part B?

A

voluntary (with proof of coverage) medical insurance that covers doctors’ visits and numerous services and prescriptions that aren’t included in Part A

68
Q

What is the 2018 Medicare Part B coverage?

A

After $183 deductible, pays 80% of costs

69
Q

What is Medicare Part C? (3)

A

Medicare advantage program (2003); replaces old Part A and B; offers more services by private health care providers

70
Q

What is Medicare Part D? (2)

A

Medicare prescription drug benefit; voluntary drug discounts offered by private health care providers with $0-360 deductible

71
Q

What is Medigap?

A

supplement what Medicare doesn’t cover

72
Q

What is Medicaid? (2)

A

medical assistance for low-income people of all ages; state-administered with federal guidelines

73
Q

In what circumstances can you win a $1,000 reward?

A

If you report suspected Medicare fraud and turn out to be right and leads to recovery of at least $100 of Medicare money

74
Q

Disability is how much more likely than death?

A

2-3 times more likely than death at any age

75
Q

For disability income insurance, aim for a benefit that

A

when added to your other income, will equal 60-70% of your gross pay

76
Q

What is the elimination period?

A

waiting period before benefits begin

77
Q

Is employer disability insurance good?

A

no, usually subpar because of many exclusions

78
Q

What does Social Security cover in terms of disability insurance?

A

covers total disability that lasts more than 12 months in any occupation

79
Q

What is integration?

A

private benefits reduced by an amount received from Social Security

80
Q

Benefits from private disability insurance policies are limited to

A

70-80% of your take home pay

81
Q

After-tax premiums for private disability insurance result in

A

tax-free benefits

82
Q

Before-tax premiums for private disability insurance result in

A

taxable benefits

83
Q

What is the elimination period for private disability insurance?

A

6-12 months

Finance 3300 (15 decks)

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