Chapter 13

Question 1

what does medical expense coverage provide?

Answer 1

benefits to pay for the treament of an insured’s illness and injuries.

Question 2

who/what provides medical expense insurance coverage in the united states?

Answer 2

a private systems of commercial life and health insurance companies and other private health insurance providers offers individual and group coverage.

Question 3

government-sponsored medical expense insurance programs in the united states are designed to coer who?

Answer 3

specifed people such ad elderl or the poor

Question 4

how are countries like canada and the UK different?

Answer 4

almost every resident has medical expenses insurance coverage provided by government-sponsored programs.

Question 5

Medical expense insurance coverage in the US is available in what 3 basic forms?

Answer 5

1. traditional medical expense insurance policies
2. managed care plans
3. government-sponsored health care programs

Question 6

what are indemnity benefits provided by traditional medical expense insurance products?

Answer 6

contractual benefits that are provided based on the actual amount of the insured’s financial loss.

Question 7

how dose one typically receive reimbursment for their medical expenses?

Answer 7

after a person recieved medical service from a licensed provided of recognized services, the insured files a claim with the insurance company for the benefit.

Question 8

What are the 3 basic types of coverage provided by traditional medical expense insurance?

Answer 8

1. basic medical expense coverage
2. major medical expense coverage
3. other medical expense coverage

Question 9

basic medical expense coverage provides separate benefits for what 3 types of medical expenses?

Answer 9

1. hospital
2. surgical
3. physician expenses.

Question 10

basic medical expense coverage typically provides first-dollar coverage. What does that meanh?

Answer 10

the insurer begins to reimburse the insured for eligible medical expenses without first requiring an out-of-pocket contribution from the insured.
- however benefits provided from these plans are typically limited

Question 11

today, most health insurers offer major medical expense coverage. What does this provide?

Answer 11

substantial benefits for

1. basic hospital, surgical and physician expenses
2. addtional medical services related to illness or injury
3. preventative care.

Question 12

what are the two types of major medical coverages available (think policies) (name them dont define)

Answer 12

1. Supplemental major medical policy

2. comprehensive major medical policy?

Question 13

Define supplemental major medical polcy

Answer 13

policy issued in conjunction with underlying basic medical expense insurance policy.
-designed to provide benefit payments for expenses that exceep benefits of basic plan.

Question 14

Define a comprehensive major medical policy.

Answer 14

combines the coverage provided by both a supplemental major medical policy and an underlying basic medical expensive policy

• substantial medical coverage under one policy.
• most polcies are this one

Question 15

Name 9 basic covered services and treaments typically covered

Answer 15

1. hospital charges for room and board
2. miscellaneous inpatient hospital charges
3. surgical supplies and services
4. anesthesia and oxygen
5. physical, occupational and speech therapy
6. surgeons and physicians services
7. registered nurses’ services
8. specific outpatient expenses, (labs, xrays, px)
9. preventative services (immunizations, periodic screening, and dx tests)

Question 16

most maxium benefit amount payables for a particular service is based on the usual customary and reasonable (UCR) fee. What is this?

Answer 16

the amount that medical care providers within a particular geographic region commonly charge for a particular medical service.

Question 17

what are the two most common forms of expense participation requirements?

Answer 17

deductible (flat dollar amount of eligible medical expenses ie. 500$- that insurer myst pay before the insurer begins baying benefits)
 and coinsurance (specific percentage of all allowable expenses that remain after the insured has paid the deductable and must be paid by the insured)

Question 18

most major medical expense policies contain a calandar-year deductible, what is this?

Answer 18

a deductible that applied to the total of all allowable expenses an insured incurs during a given calendar year.

Question 19

The amount of money the insured must pay under the coinsurance provision is limited by the maximum out-of-pocket provision. Define this?

Answer 19

speficies that the policy will cover 100% of allowable medical expenses after the insured had paid a specified amount of out-of-pocket to satisfy deductable and coinsurance requirements.

Question 20

what are 5 typical medical expenses that are usually excluded from major medical expense policy coverage?

Answer 20

1. cosmetic surgery (other than corrective)
2. treatment of illness or injury that occurs in acts of war
3. treatment of intentionally self-inflicting injuries
4. treament that is provided free of charge in a government facility or is paid by organizations
5. routine dental treatments, routine eye exams, corrective lenses.

Question 21

Name 3 additional other medical expense coverages that are offered as a supplemental purchase.

Answer 21

1. dental expense coverages -typically provided under stand-alone dental expense policy
2. prescription drug coverage- usually requires the insured ot pay part of the cost of the px out-of-pocket at time of purchase. - can be covered under many major expense policies or as stand alone
3. vision care- coverage for one exam a year, - max benefit for eyeglass lenses/frames

Question 22

what is managed care?

Answer 22

a method of integrating the financing and delivert of health care services within a system that manages the access to health care5 services and the cost of those service

Question 23

what is the managed care plan?

Answer 23

the arrangement that integrates the financing and management of health care with the delivery of health care services to a group of individuals who have enrolled in the plan.

Question 24

managed care plans typically require plan member to choose providers from within the network, they also encourage plan member to use a PCP. What is this?

Answer 24

primary care physician- a network member who cordinates members’ medical care and treament.

• a pt will recieve basic medical care, preventative care, and wellness care directly through their PCP. without obtaining auth from the plan.
• to reciee specialized care a member must obtain a refer5ral.

Question 25

Whats are the 3 types of managed care plans available?

Answer 25

1. HMO- health maintenance organization
2. PPO- preferred provider organization
3. POS -point of service plan.

Question 26

In most managed care plans, how can a plan member receive comprehensive health care?

Answer 26

in exchange for payment of a fixed, periodic premium.

• covers the cost of most health care services no matter how often the member uses them
• also when a plan member receives service form a netowrk provided the plan member generally pays a specified, fixed amount, known as a copayment, to the provider.

Question 27

how do manged care plans achieve risk sharing?

Answer 27

by negotiating fee arrangements with medical care providers and making other contractual arragements that encourage cost-effect care.
- if cost of service exceed sthe providers’ negotiated fee the provider must absorb the loss. out of network providers are typically reimbured on a free-for-service basis.

Question 28

managed care plan also manage health care costs by providing a variety of additional services designed to reduce the amount of medical care that plan member requires. What do they typically offer?

Answer 28

1. extensive preventative care programs.
2. access to wellness programs,
3. patient education programs,

Question 29

what is the name of the publicly funded health care system available to nearly al residents in the UK?

Answer 29

NHS

national health service

Question 30

US provides medical expense insurance benefits thorugh several grovernment proram including medicare and medicaid. Define these two

Answer 30

1. medicare- provides medical expense benefits to persons >65 and eprsons with disabilities.- its minimal
2. medicaid - provides basic medical expense and nursing home coverage to low-income individuals and certain ages and disabled people.

Question 31

what does disability income coverage provide?

Answer 31

income replacement benefit to an insured who is unable to work because of sickness or injury.
-relieved financial stress created by disability expenses, by offering disability income coverage

Question 32

what is a benefit period?

Answer 32

the time during which the insurer agrees ot pay income benefits to the insured.

Question 33

what is short-term individual disability income coverage?

Answer 33

provides a maximum benefit period ranging from one to five years.

Question 34

what is long-term individual disability income coverage?

Answer 34

provides a maximum benefit period of > 5yrs. extends until about age 65.

Question 35

what is short-term group disability income coverage?

Answer 35

provides maximum benefit period of one year or less (usually has a max benefit period of 13- 26- 39 weeks)

Question 36

what is long-term group disability income coverage?

Answer 36

provides max benefit period of more5 than one year. max benefit to normal retirement are or 70.

Question 37

what is the current usual definition of total disability (both parts)

Answer 37

1. the disability prevent her from preforming the essential duties of her regular occupation. At the end of the specified period after the disability begins, (2-5 yrs) an insured is considered totally disabled if the disability prevents her from working any occupation for which she is reasonably fitted by education, training or experience.

Question 38

what is the other total disability definition which is included more often in individual policies than in gorup?

Answer 38

the inability to perform the essential duties of the insured’s own previous occupation.

• using this definition specify that benefits will be paid even while in insured is gainfully employed by another occupation.
• sold to those employed in certain professional occupations.

Question 39

what is a presumptive disability?

Answer 39

stated condition that, if present, automatically causes the insured to be considered totally disabled.
- ie blindess, loss of any two limbs, and loss of speech or hearing.

Question 40

what is an elimination period, which is often referred to as a waiting period?

Answer 40

specified amount of time that the insured myst be disabled before becoming eligible to receive policy benefits.

Question 41

how long are typical elimination periods?

Answer 41

30 days to 6 months. its usually related to the length of the max benefit period.

Question 42

are they elimination periods on group short term disability income policies”?

Answer 42

none on accidents

one week on sickness

Question 43

are they elimination periods on group long term disability income policies?

Answer 43

30d-6 mo.

Question 44

are disability income benefits amounts equivalent to salary?

Answer 44

no, or else people would never have the incentive to return to work

Question 45

what two methods are used to establish the amount of disability income benefit that will be paid to a disabled person?

Answer 45

1. income benefit formula
2. flat benefit amount
   - method depends on weather coverage is group or individual, and short vs. long term

Question 46

what is expressed in the disability income formula?

Answer 46

expresses amount as a stated % of the insured’s pre-disability earning and considered all sources of disability income that the disabled receives.
- 60-75%

Question 47

does short or long term disability policies offer a higher percentage of income?

Answer 47

short (90-100%)

Question 48

what are included in supplemental disability benefits ( which are available in connection with disability income policies)

Answer 48

1. partial disability benefits
2. future purchase option benefits
3. COLA

Question 49

what is partial disability

Answer 49

a disability that prevents the insured either from performing some of the duties of his usual occupation or from engaging in that occupation on a full-time basis.

Question 50

what is a future purchase option benefit?

Answer 50

grants the insured the right to increase the benefit amount in accordance with increases in the insured’s earnings.
- insured usually myst prove a commensurate ^ in income, and usually is capped at a max

Question 51

what is the COLA benefit (cost of living adjustment)

Answer 51

provides for periodic increases in the disability income benefit amount that the insured will pay to a disabled. Usually corresponds to the ^ in COL

Question 52

what are 4 exclusions one will typically see with disability income policies?

Answer 52

1. injuries or sickness d/t war
2. intentionally self-inflicting
3. injuries received as a results of participation in a riot or the commission of a crime
4. occupation related disabilities, or illness where the insured is able to receive compensation from government program.

Question 53

what is key person disability coverage ?

Answer 53

provides benefit payments to the business if an isnured key person becomes disabled.

Question 54

what is disability buyout coverage?

Answer 54

provides benefits desgined to fun the buyout of a partners’ or owners’ interest in a business should he beome disabled.

Question 55

what is the purpose of LTC coverage?

Answer 55

provides benefits for medical and other services to insureds who care for an extended pe5riod in their own homes or in a qualified facility.

Question 56

LTC insurance policies typically contain benefit triggers. What are these?

Answer 56

requirements specifyin g the conditions that establish an insured’s eligibility to receive long-term care benefits.

Question 57

when are LTC benefits usually payable?

Answer 57

if the insured either loses his physical function capacity to perform at least a specific number of activities of daily living without assistance or has sever cognitive impairment.

Question 58

what are ADLS (activities of daily living)?

Answer 58

the activities of eating, bathing, dressing, continence, toiletting and transferring in and out of bed, chair or wheel chair.

Question 59

what is cognitive impairment?

Answer 59

reduction in persons ability to think, reason or remember.

- ie. AZ and dementia.

Question 60

what kind of care may be paid by the LTC coverage?

Answer 60

diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services.

Question 61

LTC insurance policies generally state a daily benefit amount. What is this?

Answer 61

the maximum amount of benefit payable for each day of an insured’s long term care at a care facility of in the patients home.
- range from 50-500$

Question 62

long term care policies generally determine the amount of benefit payable according to either the indemnity method or the reimbursement method. define these two.

Answer 62

1. idemnity- insurer pay the insured the daily benefit regardless of the actual expenses.
2. reimbursement- the insure5r pay the insure5d the amount of covered LTC expenses per5 day up; the the daily max.

Question 63

some LTC insurance policies contain an inflation protection provision. How does it work?

Answer 63

it either automatically increases the benefit each year by a % or allows the insured to opt for a higher daily benefit amount at specified intervals without need of evidence.
- may be provided by means of a rider to an LTC policy

Question 64

what is the typical elimination period for LTC policies?

Answer 64

0-100 days.

group LTC policies have a set elimination period of 90 days.