Chapter 4: Medical Expense

Question 1

What is Medical Expense Insurance?

Answer 1

Covers hospital care, physician services, drugs, lab work, nursing, surgical expenses

• Does not include care in a government facility

Question 2

Basic Medical Expense plan

Answer 2

• Upfront benefits
• Lower benefit limits than major medical insurance
• There will still be money owed (copay)

Question 3

Hospital Expense Policies

Answer 3

• Hospital room and board, labs/x-rays, medicines, operating room and supplies
• insured pays difference left over after benefits run out (set at a dollar amount)

Question 4

Surgical Expense Policies

Answer 4

• Usually with a hospital expense policy

- Pays for surgical procedure no matter where they take place

Question 5

Physician Expense Policy

Answer 5

• AKA Basic Physician Nonsurgical Expense Coverage
• Cover emergency accident benefits, maternity, benefits, mental and nervous disorders…
• Limited benefits

Question 6

Major Medical Expense Plan

Answer 6

• Covers necessary medical expenses
• Catastrophic medical expense protection
• Both inpatient and outpatient hospital expenses
• Drug formulary (pharmacy benefits from list of specific drugs covered)

Question 7

Supplementary Major Medical

Answer 7

• After basic policy pays, this is coverage for those expenses that were not covered
• Also covers after time limitation has expired on basic policy

Question 8

Comprehensive Major Medical

Answer 8

• Combines the features of basic expense coverage and major medical coverage, as one policy
• Covers practically all medical expenses

Question 9

Deductibles

Answer 9

• states dollar amount that the insured is required to pay before insurance benefits are paid
• Helps control cost of premiums and reduce over utilization of medical services

Question 10

Flat Deductible

Answer 10

Stated dollar amount that applies to a covered loss

Question 11

Corridor Deductible

Answer 11

• This Deductible is not applied until the basic coverage has been exhausted

Question 12

Per-Cause Deductible

Answer 12

The insured must satisfy a deductible for each accident or illness

Question 13

All-Cause Deductible

Answer 13

The insured only has to meet the deductible amount once during the Benefit period

Question 14

Carryover Provision

Answer 14

• Allows insured to defer current health charges to the following years deductible instead of the current years deductible (applies to expenses incurred during the last three months)

Question 15

Coinsurance

Answer 15

• Share the cost of expenses with an insurance company
• Insurance covers 75 to 80 percent
• Insured usually pays 20%

Question 16

Stop-Loss

Answer 16

• Designed to limit the amount of an insureds out of pocket medical expenses
• States after the insured pays specific amount the insurance will pay 100% of remaining expenses

Question 17

Health Savings Accounts

Answer 17

Tax-advantage medical savings account for those that enroll in a high deductible health plan

No tax payment needed

Question 18

Health Reimbursement Arrangements

Answer 18

• Employer funded tax-advantaged health benefit plans that reimburse employees for out-of-pocket medical expenses and individual health insurance premiums

Question 19

Medical Savings Accounts

Answer 19

Help employees of small employers pay for medical care expenses

• available for businesses with fewer than 50 employees

Question 20

Hospital Indemnity Policies

Answer 20

Pay a specified amount on a daily, weekly or monthly basis to the insured while the insured is confined to a hospital

Question 21

Limited Risk (dread disease) policies

Answer 21

Provides benefits for a specific disease such as cancer or heart disease

Type of limited health insurance policy

Question 22

Critical Illness Policies

Answer 22

Pays a lump sum to the insurance upon the diagnosis of a critical illness

Question 23

What is the elimination period in a hospital indemnity plan?

Answer 23

The specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization

Question 24

Hospital Indemnity Insurance

Answer 24

Provides benefits when you are confined to a hospital