Chapter 9 Vocab

Question 1

group health insurance

Answer 1

health insurance consisting of contracts written between a group, (employer, union, etc.) and the health care provider

Question 2

indemnity (fee-for-service) plan

Answer 2

health insurance plan in which the health care provider is separate from the insurer, who pays the provider or reimburses you for a specified percentage of expenses after a deductible amount has been met

Question 3

managed care plan

Answer 3

a health care plan in which subscribers/users contract with the provider organization, which uses a designated group of providers meeting specific selection standards to furnish health care services for a monthly fee

Question 4

health maintenance organization (HMO)

Answer 4

an organization of hospitals, physicians, and other health care providers who have joined to provide comprehensive health care services to its members, who pay a monthly fee

Question 5

group HMO

Answer 5

an HMO that provides health care services from a central facility; most prevalent in larger cities

Question 6

individual practice association (IPA)

Answer 6

a form of HMO in which subscribers receive services from physicians practicing from their own offices and from community hospitals affiliated with the IPA

Question 7

preferred provider organization (PPO)

Answer 7

a health provider that combines the characteristics of the IPA form of HMO with an indemnity plan to provide comprehensive health care services to its subscribers within a network of physicians and hospitals

Question 8

exclusive provider organization (EPO)

Answer 8

a managed care plan that is similar to a PPO but reimburses members only when affiliated providers are used

Question 9

point-of-service (POS) plan

Answer 9

a hybrid form of HMO that allows members to go outside the HMO network for care and reimburses them at a specified percentage of the cost

Question 10

Blue Cross/Blue Shield plans

Answer 10

prepaid hospital and medical expense plans under which health care services are provided to plan participants by member hospitals and physicians

Question 11

Medicare

Answer 11

a health insurance plan administered by the federal government to help persons age 65 and over, and others receiving monthly Social Security disability benefits, to meet their health care costs

Question 12

supplementary medical insurance (SMI)

Answer 12

a voluntary program under Medicare (commonly called Part B) that provides payments for services not covered under basic hospital insurance (Part A)

Question 13

Medicare Advantage plans

Answer 13

commonly called Plan C, these plans provide Medicare benefits to eligible people, but they differ in that they are administered by private providers rather than by the government. Common supplemental benefits include vision, hearing, dental, general checkups, and health and wellness programs

Question 14

prescription drug coverage

Answer 14

a voluntary program under Medicare (commonly called Part D), insurance that covers both brand-name and generic prescription drugs at participating pharmacies. Participants pay a monthly fee and a yearly deductible and must also pay part of the cost of prescriptions, including a co-payment or co-insurance

Question 15

Medicaid

Answer 15

a state-run, public assistance program that provides health insurance benefits only to those who are unable to pay for health care

Question 16

workers’ compensation insurance

Answer 16

health insurance required by state and federal governments and paid nearly in full by employers in most states; it compensates workers for job-related illness or injury

Question 17

health reimbursement account (HRA)

Answer 17

an account into which employers place contributions that employees can use to pay for medical expenses. Usually combined with a high-deductible health insurance policy

Question 18

health savings account (HSA)

Answer 18

a tax-free savings account—funded by employees, employer, or both—to spend on routine medical costs. Usually combined with a high-deductible policy to pay for catastrophic care

Question 19

community rating approach to health insurance premium pricing

Answer 19

policyholders in a community (area) pay the same premium without regard to their personal health, age, gender, or other factors

Question 20

major medical plan

Answer 20

an insurance plan designed to supplement the basic coverage of hospitalization, surgical, and physicians expenses; used to finance more catastrophic medical costs

Question 21

comprehensive major medical insurance

Answer 21

a health insurance plan that combines into a single policy the coverage for basic hospitalization, surgical, and physician expense along with major medical protection

Question 22

deductible

Answer 22

the initial amount not covered by an insurance policy and thus the insured’s responsibility; usually determined on a calendar-year basis or on a per-illness or per-accident basis

Question 23

participation, or co-insurance, clause

Answer 23

a provision in many health insurance policies stipulating that the insurer will pay some portion—say, 80 or 90 percent—of the amount of the covered loss in excess of the deductible

Question 24

internal limits

Answer 24

a feature commonly found in health insurance policies that limits the amounts that will be paid for certain specified expenses, even if the claim does not exceed overall policy limits

Question 25

coordination of benefits provision

Answer 25

a provision often included in health insurance policies to prevent the insured from collecting more than 100 percent of covered charges; it requires that benefit payments be coordinated if the insured is eligible for benefits under more than one policy

Question 26

pre-existing condition clause

Answer 26

a clause included in most individual health insurance policies permitting permanent or temporary exclusion of coverage for any physical or mental problems the insured had at the time the policy was purchased. The Patient Protection and Affordable Care Act of 2010 prohibits such exclusions

Question 27

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Answer 27

federal law that allows an employee who leaves the insured group to continue coverage for up to 18 months by paying premiums to his or her former employer on time; the employee retains all benefits previously available, except for disability income coverage

Question 28

long-term care

Answer 28

the delivery of medical and personal care, other than hospital care, to persons with chronic medical conditions resulting from either illness or frailty

Question 29

waiting, or elimination, period

Answer 29

the period, after an insured meets the policy’s eligibility requirements, during which he or she must pay expenses out-of-pocket; when the waiting period expires, the insured begins to receive benefits

Question 30

guaranteed renewability

Answer 30

policy provision ensuring continued insurance coverage for the insured’s lifetime as long as the premiums continue to be paid

Question 31

optional renewability

Answer 31

contractual clause allowing the insured to continue insurance only at the insurer’s option

Question 32

disability income insurance

Answer 32

insurance that provides families with weekly or monthly payments to replace income when the insured is unable to work because of a covered illness, injury, or disease