Ch. 3 health Flashcards
Hospital expense policies
cover hospital room and board, miscellaneous hospital expenses (such as lab and x- ray charges), medicines, use of operating room, and supplies. These expenses are covered while the insured is confined in a hospital. There is no deductible and the limits on room and board are set at a specified dollar amount per day up to a maximum number of days
Basic surgical expense
specifically covers the costs associated with surgical procedures
Basic physicians expense
covers the costs associated with physician services
Coinsurance
the principle under which the company insures only part of the potential loss, the policyowners paying the other part. For instance, in a major medical policy, the company may agree to pay % of the insured expenses, with the insured to pay the other %
Stop-loss
a safeguard that limits the amount an individual or employer has to pay out-of-pocket for covered expenses. It kicks in once a certain threshold of expenses is reached
Pre-existing conditions
an illness or medical condition that existed before a policy’s effective date; usually excluded from coverage, through the policy’s standard provisions or by waiver
Limited risk policies
provide a variety of benefits for a specific disease such as cancer or heart disease. Benefits are usually paid as a scheduled, fixed-dollar amount for specified perils or medical procedures such as hospital confinement or chemotherapy
Basic medical expense insurance
a health insurance policy that provides “first dollar” benefits for specified (and limited) health care, such as hospitalization, surgery, or physician services. Characterized by limited benefit periods and relatively low coverage limits
Major medical expense policy
a health insurance policy that provides broad coverage and high benefits for hospitalization, surgery, and physician services. Characterized by deductibles and coinsurance cost sharing
Deductible
an amount of expense or loss to be paid by the insured before a health insurance policy starts paying benefits
Flat deductible
a stated dollar amount that applies to a covered loss (e.g. $500). This deductible is applied per occurrence, per insured individual. Sometimes referred to as an “initial deductible”
Corridor deductible
when a major medical policy is supplementing basic coverage that contains no deductible, the corridor deductible is not applied until the basic coverage has been exhausted
For example, if the corridor deductible is $50,000, the insured pays the first $50,000 of expenses, and the insurance coverage begins after that amount is reached
Integrated deductible
a feature in health insurance plans where the deductible amounts for different types of coverage (like medical and prescription drugs) are combined into a single deductible
Per-cause deductible
the insured must satisfy a deductible for each accident or illness
All-cause deductible
the insured only has to meet the deductible amount once during the benefit period
Carryover provision
allows an insured to defer current health charges to the following year’s deductible instead of the current year’s deductible
Health savings accounts (HSA)
tax-advantaged medical savings accounts available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit
Health reimbursement arrangements
employer-funded and employer-established, tax-advantaged health benefit plans that reimburse employees for out-of-pocket medical expenses and individual health insurance premiums. Unused amounts may be carried forward for reimbursement in future years. Reimbursements may be tax-free if the employee paid for qualified medical expenses or a qualified medical plan
Medical savings accounts (MSA’s)
created to help employees of small employers, as well as self- employed individuals, pay for their medical care expenses. MSA’s are tax-free accounts set up with financial institution such as banks and insurance companies. Qualified medical savings accounts are available for employers with no more than 50 employees
Flexible savings accounts or flexible spending accounts
tax-advantaged accounts that can be set up through a cafeteria plan of an employer. An FSA allows an employee to set aside a portion of earnings to pay for qualified medical expenses (such as prescription medication) as established in the cafeteria plan
Hospital indemnity policies/ Fixed rate policy
forms of health insurance providing a stipulated daily, weekly, or monthly indemnity during hospital confinement; payable on an unallocated basis without regard to actual hospital expense
Limited benefit policies
restrict benefits to specified accidents or diseases, such as travel policies, dread disease policies, ticket policies, and so forth
Critical illness policies
an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed and survives a specific illness. Policy owners must survive the illness for a specific amount of time, usually 30 to 90 days
Hospital room and board benefits
cover expenses for occupancy of the room and bed, general nursing care, food and beverages, and personal hygiene items. These limits may not provide for the full amount of hospital room and board charges incurred by the insured. For example, if the hospital expense benefit was $200 per day and the hospital actually charged $400 per day, the insured would be responsible for the additional $200 per day
Surgical expense policies
commonly written in conjunction with hospital expense policies. These policies pay for the costs of surgeons’ services, whether the surgery is performed in or out of the hospital. Coverage includes surgeon’s fees, anesthesiologist, and the operating room
Under the surgical schedule approach…
every surgical procedure is assigned a dollar amount by the insurer.
Relative value approach
similar to the surgical schedule method. The difference is that instead of a flat dollar amount being assigned to every surgical procedure, a specified set of units is assigned
Under the usual, customary, and reasonable approach (UCR)
the surgical expense is compared to what is deemed reasonable and customary for the geographical part of the country where the surgery was performed
Comprehensive major medical
combines the features of basic expense coverage and major medical coverage, sold as one policy. Cover practically all medical expenses, hospital, physicians, surgical, nursing, drugs, laboratory tests, etc.
What are the 2 common types of medical policies
Supplemental major medical policies
Comprehensive major medical policies
Supplementary major medical policy
Used to supplement the coverage payable under a basic medical expense policy. Will provide coverage for expenses that were not covered by the basic policy
Comprehensive major medical policy
A combo of basic expense coverage and major medical coverage, sold as one policy. Covers practically all medical expenses
Dental expense insurance
Form of medical insurance that covers the treatment, care, and prevention of dental disease and injury to the insured’s teeth. Uniquely, this insurance also covers teeth cleaning and fluoride treatment
Common accident deductible
Family maximum deductible
Individual deductible
