Chapter 3: Vocab

Question 1

coinsurance

Answer 1

the amount a patient must pay for major medical care after meeting the deductible

Question 2

consumer-directed health plan

Answer 2

a combination of a high deductible medical insurance policy and HSA which is used to accumulate funds on a tax-advantaged basis to pay health care expenses as a result of deductibles and other cost sharing

Question 3

deductible

Answer 3

the amount a patient must pay each year before the health insurance plan begins paying

Question 4

exclusive provider organization

Answer 4

a form of managed care in which participants receive all of their care from in-network providers. Unlike an HMO, a referral is not necessary to see a specialist

Question 5

FSA

Answer 5

employer sponsored plan that permits employees to defer pre-tax income into an account to pay for health care expenses. FSAs require the employee to either use the contributed amounts for medical expenses by the end of the year, or forfeit the unused amounts to the employer

Question 6

grace period

Answer 6

a provision in most insurance policies which allows payment to be received for a certain period of time after the actual due date without a default or cancellation of the policy

Question 7

group health insurance

Answer 7

health plans offered to a group of individuals by an employer, association, union, or other entity

Question 8

health maintenance organization (HMO)

Answer 8

A form of managed care in which participants receive all of their care from participating providers. Physicians may be employed by the HMO directly, or may be physicians in private practice who have chose to participate in the HMO network. The independent physicians contract with the HMO to serve HMO participants, receiving a flat annual fee (capitation fee) for each HMO member, whether the member receives medical services from the provider or not

Question 9

HSA

Answer 9

plan that permits employees or individuals to save for health care costs on a tax-advantaged basis. Contributions made to the HSA by the plan participant are tax-deductible as an adjustment to gross income (above-the-line), and distributions from the HSA to pay for qualified medical expenses are excluded from income

Question 10

High Deductible Health Insurance Plan

Answer 10

Plans with a deductible of at least $1,400 for individual coverage and $2,800 for family coverage in 2020. Maximum out of pocket amount of $6,900 for single coverage and $13,800 for family coverage in 2020.

Question 11

Incontestability clause

Answer 11

clause in a health insurance policy that prevents the insurer from challenging the validity of the health insurance contract after it has been in force for a specified period of time unless the insured fraudulently obtained coverage in the beginning of the policy

Question 12

indemnity health insurance

Answer 12

traditional, fee-for-service health insurance that does not limit where a covered individual can get care

Question 13

individual major medical plans

Answer 13

major medical insurance coverage purchased independently from an insurance company (not as part of a group).

Question 14

managed care insurance

Answer 14

health care delivery systems that integrate the financing and delivery of health care. managed care plans feature a network of physicians, hospitals, and other providers who participate in the plan. managed care includes HMOs, PPOs, EPOs, and POS plans

Question 15

medicare supplement insurance (medigap)

Answer 15

a health insurance policy designed to cover some of the gaps in coverage associated with traditional medicare

Question 16

out-of-pocket maximum

Answer 16

the sum of the deductible plus the insured’s portion of the coinsurance. generally it also includes any copays

Question 17

point of service plan (pos)

Answer 17

a form of managed care that is considered a managed care/indemnity plan hybrid, as it mixes aspects of HMPs, PPOs, and indemnity plans for greater patient choice. A primary care physician coordinates patient care, but there is more flexibility in choosing doctors and hospitals than in an HMO

Question 18

preferred provider organization (PPO)

Answer 18

a form of managed care in which participants have more flexibility in choosing physicians and other providers than in an HMO. The arrangement between insurance companies and health care providers permits participants to obtain discounted health care services from the preferred providers within the network

Question 19

premium

Answer 19

the amount participants pay to belong to a health plan

Question 20

primary care physician

Answer 20

a physician that is designed as a participant’s first point of contact with the health care system, particularly in managed care plans