Chapter 11 Flashcards
What are the healthcare costs per person?
$13,375
How much more are American healthcare costs per person in comparison to those of the 24 industrialized European and North American countries?
twice as much
What percent of the GDP was spent on medical expenditures in 2016? 2025?
18.1%; 20%
What percent of health care dollars goes towards administrative costs in the U.S.? In Canada?
11%; 1%
When was the Patient Protection and Affordable Care Act passed?
3/23/2010
When was the Health Care and Education Reconciliation Act passed?
3/30/2010
The Obama administration believed that the reforms outlined in the two acts it passed would (3)
reduce long-term growth of healthcare costs; expand coverage to 32 million people; set minimum coverage standards
Children can stay on their parent’s plan until the age of
26 under the ACA (previously was 25)
What were some of the tax changes made when the ACA was introduced? (4)
increased Medicare tax; new 3.8% investment income tax; excise tax on “Cadillac” plans; monetary penalty/tax if you don’t have coverage
Who pays the vast majority of healthcare costs?
3rd parties pay a vast majority as opposed to actual consumers of health care
What incentives are being established to reduce high healthcare costs?
incentives are being established for preventative and services provided out of the hospital where medically acceptable
How many Americans don’t have health insurance?
33 million Americans
How much does the U.S. spend on healthcare?
$3.4 trillion
What percent of Americans are older than age 25?
40%
Disability income protects
your ability to earn an income
Group plans comprise what percentage of all health insurance?
90%
Most group plans are sponsored by whom?
employers — they pay part or most of the cost
HIPAA stands for
Health Insurance Portability and Accountability Act
When was HIPAA passed?
1996
What does HIPAA do?
provides federal portability standards, nondiscrimination in health insurance, and guaranteed renewability
Can you supplement your group policy?
Yes
When should you supplement your group policy?
Recommended when your policy fails to provide all benefits needed
What is the coordination of benefits?
benefits received from all sources are limited to 100% of allowable medical expenses
Give an example of when the coordination of benefits applies.
when a husband and wife both have policies
COBRA requires
many employers to offer employees and dependents the option to continue their group coverage
COBRA applies for how many months following a divorce?
36 months
COBRA applies for how many months to private company employees?
18 months
COBRA applies for how many months to state and local government employees?
18 months
Does COBRA apply to federal government employees?
No
A good health insurance plan should cover at least how many days in a hospital room?
120 days
A good health insurance plan should provide what lifetime maximum for each family member?
$1 million
A good health insurance plan should pay at least what percent of out-of-hospital expenses?
80% of out-of-hospital expenses after yearly deductible of $1,000/person or $2,000 per family is met
A good health insurance plan should limit your out-of-pocket expenses to
no more than $4,000 to $6,000 per year
What are the three components of basic coverage?
hospital expense insurance; surgical expense insurance; physician expense insurance
Define hospital expense insurance.
hospital room, board and other charges
Define surgical expense insurance.
surgeon’s fee for an operation
Define physician expense insurance.
physician’s care such as office visits, lab tests, and X-rays (excluding surgery)
Define major medical expense insurance.
covers large expenses for a serious injury or long-term illness above basic coverage
What are the two features of major medical expense insurance?
has a deductible, coinsurance and stop-loss provision; large maximum benefits
Define comprehensive major medical insurance. (2)
very low deductible offered without a separate, basic plan; covers hospital, surgical and other bills
Define dread disease and cancer insurance policies. (3)
focus on unrealistic fears and only pays out for very specific conditions; often sold by people working on commission; very poor value generally
Define hospital indemnity. (2)
pays a fixed cash amount for each day you are in a hospital (AFLAC); best for people in high-risk groups
Define dental expense insurance.
covers exams, cleaning, x-rays, fillings, root canals and oral surgery
Define vision care.
exams, contact lenses and glasses
(T/F) Long term care insurance is a new concept.
True, it was virtually unknown 50 years ago
What percentage of people over the age of 65 need long term care insurance?
70%
What are the long term care insurance premiums?
between $2,000 and $6,000 per year
What is the national average cost for 1 year in a nursing home?
$88,000
A long term care insurance plan pays for how many years?
2-6 years up to a dollar limit
What is a guaranteed renewable? (2)
insurer must renew the policy, regardless of your personal health; premium increases only allowed for a “class” of insureds
Reimbursement vs. indemnity
actual dollars vs. benefits, regardless of cost
Inside limits vs. aggregate limits
dollar maximum per procedure vs. overall dollar maximum over one’s lifetime
What are out-of-pocket limits a.k.a. stop-loss?
limit total deductibles and coinsurance per insured per year
What is RCN?
reasonable, customary, and necessary
Blue Cross offers
hospital care benefits
Blue Shield offers
surgical and medical services benefits performed by physicians
What is managed care? (2)
prepaid health plan; includes HMOs or PPOs
What does HMO stand for?
health maintenance organization
Describe the features of HMOs. (3)
contracts with selected care providers; fixed prepaid monthly premium; focus on prevention and wellness to reduce costs
What does PPO stand for?
preferred provider organization
Describe the features of PPOs.
several providers to choose from; costs more than an HMO but more choice and fewer restrictions
What is an exclusive provider organization?
extreme type of PPO that offers no reimbursement if outside provider is used, except for emergency care
What is a point-of-service plan (POS)?
insured selects PCP who controls referrals
What is Medicare?
federal health program for 65+ and people with disabilitys
What is Medicare Part A?
compulsory part that covers inpatient hospital + skilled nursing costs, home health care and hospice care, including doctor fees
What is the 2018 Medicare deductible?
$1,340
What is Medicare Part B?
voluntary (with proof of coverage) medical insurance that covers doctors’ visits and numerous services and prescriptions that aren’t included in Part A
What is the 2018 Medicare Part B coverage?
After $183 deductible, pays 80% of costs
What is Medicare Part C? (3)
Medicare advantage program (2003); replaces old Part A and B; offers more services by private health care providers
What is Medicare Part D? (2)
Medicare prescription drug benefit; voluntary drug discounts offered by private health care providers with $0-360 deductible
What is Medigap?
supplement what Medicare doesn’t cover
What is Medicaid? (2)
medical assistance for low-income people of all ages; state-administered with federal guidelines
In what circumstances can you win a $1,000 reward?
If you report suspected Medicare fraud and turn out to be right and leads to recovery of at least $100 of Medicare money
Disability is how much more likely than death?
2-3 times more likely than death at any age
For disability income insurance, aim for a benefit that
when added to your other income, will equal 60-70% of your gross pay
What is the elimination period?
waiting period before benefits begin
Is employer disability insurance good?
no, usually subpar because of many exclusions
What does Social Security cover in terms of disability insurance?
covers total disability that lasts more than 12 months in any occupation
What is integration?
private benefits reduced by an amount received from Social Security
Benefits from private disability insurance policies are limited to
70-80% of your take home pay
After-tax premiums for private disability insurance result in
tax-free benefits
Before-tax premiums for private disability insurance result in
taxable benefits
What is the elimination period for private disability insurance?
6-12 months
