1. Health and care products - PMI and related Flashcards
Benefits - in-hospital vs out-of-hospital
In-hospital
- types of admissions covered
- rand amount limits for hospitalisation
- co-payment, excess amounts
- exclusions
Out-of-hospital
- chronic medication (number of chronic conditions covered, overall rand amount for chronic cover) - no prospect further treatment will improve person’s health
- acute medication (rand amount for acute medication cover) - medical conditions expected to be cured as result of active treatment
GP visits
-(rand amount limit per GP visit, overall limit (number of visits or rand total))
Specialist visits
- rand amount limits per specialist visit
- overall limit (number of visits/ rand total)
Private Medical Insurance
indemnity-based seeking to provide compensation for cost of private medical treatment
Cover
- comprehensive products are expensive and more attractive in higher socio-economic groups
- policy may typically cover: emergency medical treatment, in-patient tests, surgery, hospital accomodation, nursing
may include
- out-patients tests and consultations
- overseas cover
- cash payment while in state-funded hospitalisation
General exclusions
- alcohol and drug abuse
- self-inflicted injury
- cosmetic injury
- infertility
- experimental treatment
- war risks
- wilful and material violation of law
- search and rescue
- costs for which third party responsible
Claims experience and risk rating
cost of cover reflected in incidence of various conditions and costs relating to treatment of the condition (frequency * cost)
- premiums usually increase at each renewal with increasing age and due to medical cost inflation
- some PMI insurers operate NCD systems to reflect claims experience in premiums
Community rating: all individuals who belong to the group are charged the same premium
Managing claim costs
robust policy design and clear policy terms and conditions are important to ensure that the policy is not misused
ways to prevent over-claiming
- limitations and exclusions on benefits
- co-payments and levies
- medical savings accounts
- approved provider networks
- preventative medicine and wellness programmes
- introducing managed care systems
Major Medical Expenses
- only provide fixed cash for major medical expense
- lump sum when policyholder undergoes surgery (acute treatment)
- size of lump sum varies with class/ severity of procedure
- disadvantage: does not cover out-of-hospital episodes
- advantage: simplicity of fixed benefit schedule
How relationship with network of healthcare services helps manage claim costs
- negotiating fees and service standards
- introducing treatment protocols
- requiring pre-authorisation from insurer for hospitalisation and more expensive treatment
- employing own health professionals to set rules and assess special cases
Health (cash) plans
- defined benefit, defined premium products
- subscriber and family entitled to range of specified payouts dependent on certain healthcare related events. These include
- hospitalisation
- gap cover
- dental
- optical
- physiotherapy
- recuperation
- maternity
- hearing aids
- consultations
- benefits may be limited to a certain percentage of the medical bill
Profitability dependent on
- long-term policyholder loyalty (renewal rates)
- large volumes
- low cost administration (due to small benefits and premiums)
Examples of health cash plans
- hospital cash plans
- gap cover
Hospital cash plans
- low premium, low benefit plans
- offer fixed amount per day in hospital
- usually long-term, offer cover until maximum age/ earlier death
- may be an option to escalate benefits (and premium) over term
(Medical) gap cover
- designed to cover difference between cost of treatment and amount covered by PMI
- benefits usually limited to an annual amount per health event
Dental and optical plans
- cane be part of PMI or cash plan policies, or stand-alone plans
- two principal methods of providing dental cover
- capitation basis (dentist paid agreed fixed sum per insured mouth)
- indemnity basis (insurer covers actual cost of treatment delivered)
Waiting list plans
- provide standard medical insurance benefits where public health service not in position to provide treatment within specified period
- meet customer need of desire to buy insurance to avoid waiting for treatment
Travel insurance policies
- often have a health insurance component that covers:
- emergency medical care overseas
- medical evacuation
- repatriation
- benefits are usually limited to a max amount per trip
- premiums are individually rated and dependent on age, gender, destination, length and type of trip
Personal Accident
- short-term reviewable - provide lump sum benefits to compensate bodily injury suffered as result of an accident
- rider benefit paying reduced benefits if insured’s children suffer accident
Accidental death and total permanent disability
- death/ TPD as result of accident usually included in personal accident product
- health-related events are excluded
definitions of disability
- occupation-based
- activities of daily living
- definitions using working activities or functional abilities
Occupation-based
could relate to inability to perform:
- own occupation
- all occupations suited to education, training and experience
- any occupation
Activities of Daily Living
- feeding
- dressing
- washing
- toileting
- mobility
- transferring
Advantages
- applied to wide range of lives
- simplicity of using one definition throughout policy term
- less subjective
Alternative definitions
- activities of daily work (ADWs)
- personal capability assessments (PCAs)
- functional assessment tests (FATs)
Accident benefits
- benefits usually specify fixed amount in event an insured party suffers an accident resulting in loss of one or more limbs
- not indemnity insurance as not possible to quantify value of limb loss
