Chapter 0 - Introduction to Health & Care Flashcards
1
Q
Distinguishing features of the healthcare market
A
- Public good characteristics and universal access
- Information asymmetry and over-supply and demand
- Supply of healthcare
- Rapidly increasing costs of healthcare services
- Importance of health insurance
2
Q
ACC
A
- General economic and commercial environment
- Professionalism
- Specifying the problem
- targeted outcome
- risks and how to handle them
- analysis of options for design of products - Developing the solution
- analysis of major actuarial models and how they can be adjusted
- select most appropriate model or create a new one
- set assumptions
- interpretation of modelling results
- implication of results on overall problem
- proposed solution
- alternative solutions
- formalising proposal - Monitoring experience
- identification of cause of departure from targeted outcome
- likely to recur
- identify source of surplus and update assumptions
3
Q
Product cycle
A
- Product design
- Pricing
- Marketing and sales
- Underwriting
- Claims management
- Monitoring experience (feeds back into pricing)
- Valuation
4
Q
Types of underwriting (for PMI)
A
- Full medical underwriting
- Moratorium underwriting
- Medical history disregarded
If cover continues with different insurer, usually more underwriting. Exceptions:
- No worse terms
- Continued personal medical exclusion
5
Q
Full medical underwriting
A
- Medically underwritten at time of application and info on medical history is gathered
- Applicant usually accepted at standard premium terms
- Policy is endorsed so that any pre-existing conditions are excluded
6
Q
Moratorium underwriting
A
- No medical underwriting
- Will not cover any medical conditions that existed during a pre-specified period prior to the policy commencing (usually 2-5 years)
- Will later cover conditions if no treatment, symptoms or advice takes place on those conditions for a period of generally 2 consecutive years after cover commences
7
Q
Medical history disregarded
A
- Underwritten without regard to that individual’s past medical history
- More likely to apply on group PMI schemes
8
Q
No worse terms
A
- Offer cover at least as comprehensive as policyholder’s current policy with no additional underwriting conditions
9
Q
Continued personal medical exclusion
A
- NWT acceptance
- Insurer promises to only carry forward such cover for medical conditions as existed under the previous insurance policy
10
Q
Mutuality
A
- Premiums are paid into a pooled fund
- Premium paid depends on risk
- Claims are paid out in accordance with agreement
11
Q
Disadvantages of mutuality
A
- May exclude some people from taking out insurance e.g. if risk is too high for insurers to accept or premiums too high for individual to afford
- Benefits covered also limited by the terms in the policy contract
12
Q
Solidarity and community rating
A
- Similar to mutuality in the sense that they both involve the concept of sharing losses
- Premiums not based on risk - based on ability to pay or set equally
- Losses are paid according to need
- E.g. in SA, open enrolment policy for unrestricted funds where funds are obliged to accept anyone who wants to become a member at standard premium rates and minimum benefit package is prescribed under current legislation
13
Q
Disadvantages of solidarity
A
- Adverse selection
14
Q
Need for reinsurance for long-term insurance
A
- Cope with claim payout fluctuations
- Finance new business strain
- Technical assistance
15
Q
Need for reinsurance for short-term insurance
A
- Protect against large claims
- Take on larger risks that could otherwise be taken on
- Reduce the impact of accumulations of risk and catastrophes
