Chapter 12

Question 1

Health Insurance

Answer 1

Protection against the financial consequences of poor health

Question 2

Medical Expense Insurance

Answer 2

Protection against financial losses that result from medical bills because of an accident or illness

Question 3

Major Medical Insurance

Answer 3

A medical insurance plan designed to provide substantial protection against catastrophic medical expenses. There are few exclusions and limitation, but deductibles and coinsurance are common

Question 4

Preexisting-Conditions Provision

Answer 4

A provision that excludes coverage for a limited period of time for a physical or metal condition for which a covered person in a benefit plan received treatment or medical advice within a specified time period before becoming eligible for coverage

Question 5

Dedecutible

Answer 5

The initial amount of portion of covered losses that is borne by the insured, rather that by the insurance company

Question 6

Common Accident Provision

Answer 6

A provision in a major medical expense contract whereby if two or more members of the same family are injured in the same accident

Question 7

Coinsurance (Medical Expense Insurance)

Answer 7

The percentage of covered expenses under a medical insurance plan that is paid by the insurance company once a deductible is satisfied. Eighty percent is common.

Question 8

Stop-Loss Limit

Answer 8

The maximum amount of out-of-pocket medical expenses that a covered person must pay in a given period (usually 1 year). After this limit is reached, future co payments and deductibles are waived for the remainder of the period.

Question 9

Preadmission Certification

Answer 9

A requirement under many medical expense plans that a covered person or his or her physician obtain prior authorization for any non emergency hospitalization

Question 10

Second Surgical Opinion

Answer 10

A cost-containment strategy under which covered person are encourages or required to obtain the opinion of another physician after certain categories of surgery have been recommended. If a second opinion is mandatory, benefits are reduced if the second opinion is not obtained. Benefits are usually provided for the cost of a third opinion if the opinions of the first two physicians are in disagreement

Question 11

Extended Care Facility

Answer 11

A health care facility for a person who no longer requires the full level of medical care provided by a hospital but does need a period of convalescence under supervised medical care. Also known as a skilled-nursing facility.

Question 12

Home Health Care

Answer 12

Medical Care that is received at home. Care is usually part-time and performed under a plan prescribed by a physician

Question 13

Hospice Care

Answer 13

A health Care facility or service that provides benefits to terminally ill persons. The emphasis is on easing the physical and psychological pain associated with dying rather than on curing a medical condition

Question 14

Birthing Center

Answer 14

A facility, separate from a hospital, designed to provide a homelife atmosphere for the delivery of babies. Deliveries are performed by nurse-midwives, and mothers and babies are released shortly after birth.

Question 15

Managed Care

Answer 15

A process to deliver cost-effective health care without sacrificing quality or access. Common characteristics include controlled access to providers, comprehensive case management, preventive care, risk sharing, and high-quality care.

Question 16

Health Maintenance Organization (HMO)

Answer 16

A managed system of health care that provides a comprehensive array of medical services on a prepaid basis to voluntarily enrolled persons living within a specific geographic region. HMOs both finance health care and deliver health services. There is an emphasis on preventive care as well as cost control

Question 17

Preferred-Provider Organization (PPOs)

Answer 17

Benefit Plan that contracts with preferred providers to obtain lower-cost care for plan members. Also refers to health care providers that contract with employers or others to provide medical care services at a reduced fee.

Question 18

Exclusive-Provider Organization (EPO)

Answer 18

A variation of a PPO in which coverage is not provided outside the preferred-provider network except in those infrequent cases where the network does not have an appropriate specialist

Question 19

Point-of-Service (POS) Plan

Answer 19

A hybrid arrangement that combines aspects of a traditional medical expense plan with an HMO or a PPO. At the time of medical treatment, a participant can elect whether to receive treatment within the plan’s network or outside the network.

Question 20

Consumer-Directed medical Expense Care

Answer 20

An approach to medical expense insurance that gives employees increased choices and responsibilities involving their health care

Question 21

High-Deductible Health Plan

Answer 21

Medical Expense plan with a deductible as high as $5K or more. The employer contributes a lower or equal amount to a savings account from which employees can pay medical expenses not covered because of the deductible.

Question 22

Defined-Contribution Medical Expense Plan

Answer 22

A plan under which the employer makes a fixed-dollar contribution that an employee can use toward paying the cost of medical expense coverage, regardless of premium

Question 23

Health Reimbursement Arrangement (HRA)

Answer 23

An account funded with employer dollars from which an employee can withdraw amounts to pay medical expenses that are not covered under a high-deductible medical expense plan

Question 24

Carve-Out (Medical Expense Insurance)

Answer 24

Coverage under a medical expense plan that has been singled out for individual management by a party other than the employer or the employee’s primary health plan provider

Question 25

Coordination-of-Benefits (COB) Provision

Answer 25

A provision in most group medical expense plans under which priorities are established for the payment of benefits if an individual is covered under more than one plan. Coverage as an employee is generally primary to coverage as a dependent. When parents are divorces, the plan of the parent with custody is primary, the plan of the current spouse of the parent with custody is secondary, and the plan of the parent without custody pays last. Other rules apply to other situations.

Question 26

Medicare Carve-Out

Answer 26

An employer-provided medical expense plan for persons over age 65 under which benefits are reduced to the extent that they are payable under Medicare for the same expense

Question 27

Medicare Supplement

Answer 27

An individual or employer-provided medical expense plan for persons aged 65 or older under which benefits are provided for certain specific expenses not covered under Medicare. These can include a portion of expenses not paid by Medicare because of deductibles, coinsurance, or co payments, and certain expenses excluded by Medicare. In individual insurance, also referred to as a medigap policy.