Chapter 3 Core healthcare insurance products Flashcards
What is the ABI definition of an Acute condition?
A disease or illness that is likely to respondquickly to treatment which aims to return you toa the state of health you were in immediatelybefore disease illness or injury or which leads tpyour full recovery
ABI
What is a definition of a Chronic condition
Needs ongoing or long term monitoring Needs ongoing or long term control Requires rehabilitation or training to cope with Continues indefinitely No known cure Comes back or is likely to come back Cancer can be exception!
What type of condition does PMI cover acute or chronic
Acute
A patient who gets treated in hospital and stays overnight is known as a what?
In patient
A patient who is treated in hospital and returns to a hospital bed but does not stay overnight is known as what?
Day patient
A patient who is treated in hospital but does not have a medically supervised recovery is known as what?
Out patient
Under regulations Private Medical insurance is classified as what type of insurance?
General
Identify four requirements of the FCA rules on renewal transparency April 2017 which apply to consumer PMI renewals.
- Changes advised in good time
- Last year’s premium in renewal notices
- Notice to encourage consumers to check cover and shop around
- Additional notice for those consumers have renewed four consecutive times
Identify three conditions/treatments that are often not covered under PMI
- chronic conditions
- GP consultations
- Pre existing conditions
Where are the most expensive hospital bands
NHS teaching hospitals and hospitals in centre of London
What primarily determines in which band a hospital falls
Quality of accommodation
If insured uses higher hospital band than they are covered for who pays additional costs
Insured
Identify four types of personal private medical insurance product.
- Comprehensive
- Mid range
- Basic
- International
Identify five add on benefits that may be provided under a comprehensive PMIpolicy
- Travel
- Gym and fitness club membership
- Health screenings
- Complementary/alternative therapies
- Critical illness
Identify six hospital charges paid by a comprehensive PMI policy
- Accomodation and nursing
- Operating theatre facilities
- Surgical drugs and dressings
- Prostnesis (surgically implanted device)
- Day case treatment
- Complementary and alternative therapies
What do insurers use to categorise the cost of surgical procedures?
2000 procedure codes developedby Coding and ScheduleDevelopment
Under a comprehensive policy what out patient treatments might be covered?
Pathology (blood and urine tests)
Radiology (x rays and body scans)
Physiotherapy
Consultations
How do insurers limit their exposure to out patient costs
Impose annual financial limit or specified number of out patient visits
Identify nine other benefits which might be paid under a comprehensive PMI policy
Treatment for mental and addictive illnesses
Emergency overseas cover including repatriation
Alternative or complementary medicine
Dental up to annual limit
Eye care is up to annual limit
Cash benefit if use NHS
Cash payment for each night in hospital
Cost of parent guest room
Home nursing facilities
Private road ambulance for hospital transfers
How does a mid range policy differ from a comprehensive policy?
Limit on out patient benefits
Lower hospital bands
Identify the types types of basic policy
4 or 6 weeks policy
Limited benefits policy
How does a 4 or 6 week policy work?
Treatment only paid if NHS waiting list 4 or 6 weeks
Cash benefit paid if use NHS
Why have many 4 or 6 week policies been withdrawn?
Difficult to police due to varying waiting times so withdrawn
How does a limited benefits policy differ from a comprehensive policy?
Only cover most expensive treatments eg inpatient
Lower priced hospitals
Exclude psychiatric and addictive disorders
Out patient costs totally excluded or very limitedeg only in certain hospitals, low limit for yearonly following operations
What is a medical savings plan?
A product that combine medical insurance with a high excess and a regular savings plan to fund the excess eg tax efficient ISA
What is a menu cover product?
Provides a menu of cover which the insured selects - the more they select the higher the premium
Usually only cover In patient or day patient
Out patient cover for cancer and heart can be added
Different benefits can also be provided eg dental
Who pays the premium usually under Group PMI
The employer
What do Group schemes often pay for which individual policies often do not
Pre existing conditions
Who pays the premium under an affinity or voluntary scheme?
Employee
Identify three reasons why employers purchase Group PMI
- Benefit to attract and retain employees
- Minimise impact of medical absences
- Enable senior managers to work in hospital
Identify 4 types of Group scheme
- Small under 50 employees
- SME 50-250 employees
- Large 250 plus employees
- Affinity offered by employer but employees pay
Identify 5 ways Group schemes are funded
- Fully insured
- Risk/profit share
- Cost plus
- Self insured
5, Corporate deductible
How does a risk share policy work?
If claims are below projected a portion premium is returned to employer
How does a cost plus policy work?
Employer pays claims plus handling costs subject to stop loss policy which will cap the maximum payable.
Claims are paid out of fund - balance returned at end of year if not used
How does a self insured policy work?
Usually under a trust arrangement claims are self funded by employer although notional premium calculated for tax benefit purposes
How does a corporate deductible policy work?
Employer selects large deductible eg £1.5m per year r Insurer only charges for insurance excess of deductible plus administration costs thus save employer IPT.
What is a flexible benefit scheme?
Employees choose the benefit they require from a menu?
What other benefits may be available under a flexible benefit scheme other than PMI?
Life Long term disability Critical illness PMI Dental Personal accident Travel
Identify four advantages of a flexible benefits scheme
Employee choose benefits for lifestyle
Employees can upgrade
Savings on NICs and tax
Schemes can harmonise benefits after merger
Identify four disadvantages of a flexible benefit scheme?
Costs of administering scheme
Some employees not take advantage
Employers may use to reduce their costs
Payroll systems can not cope
What are benefit limits?
Table in policy setting out maximum insurers will pay per procedure statingmaximum payable daily, weekly,annually or per procedure
Other than limiting insurers’ exposure how does the specialist fees limit also help PMI insurers
Indicates to specialists how much they cancharge
identify three types of discounts
Affinity
Payment
Earned
What is an affinity discount?
A discount to premium for being a member of an organisation or employee
What is a payment discount?
Discount for paying premium annually rather than monthly
What is an earned discount?
Discount for adopting healthier life style
How does a health cash plan work?
Pay 50-100% of treatment costs up o annual limit
Most used are dental and optical
How is the biggest provider of health cash plans?
Simplyhealth
Give an example of dental minor remedial care
Extractions
What would be a major dental restorative treatment ?
crowns. bridges, dentures
Who sells capitation plans?
Dentists
What happens before a capitation plan begins
An initial examination to determine risk group
How does a capitation plan works
Patient pays monthly fee to capitation provide.
Dentist carries out work for free and recovers cost from capitation provider
Form of budgeting rather than an insurance policy
