Chapter 7 - Healthcare Products Flashcards
1
Q
What are the key features of Health products?
A
- Highly regulated
- State plays a big role
- Can be long-term or short-term
2
Q
What are the key features of short-term Health products?
A
- Cover typically for a year and can be renewed
- multiple claims
- claim amounts are unknown and can be volatile
- there can be delays in reporting and settling claims
3
Q
What are the key features of long-term Health products?
A
- They are long term
- Cover usually ceases on claim
- Claim amount might be know with certainty
4
Q
How are contribution rates set for Health products?
A
- Income must be equal or greater than outgo
- Surplus belongs to capital provider or reserve fund
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5
Q
What is Mutuality?
A
- Premiums pooled
- Premium determined based on risk of policyholder
- Claims paid out of pooled funds
6
Q
What is Solidarity?
A
- Similar to Mutuality in concept of sharing losses
- Premium not based on risk
- Premium can either be based on ability to pay or set equally
- Losses paid based on need
7
Q
What are the types of entities that provide Health cover?
A
- State provision and NHI
- Subsidised healthcare through donor orgs
- Mutual orgs (Medical Schemes)
- Insurance Companies
8
Q
What are the key risks under Health Products?
A
- Claim frequency, Benefit amount, volatility, settlement delays
- Investment risk
- expenses
- poor persistency (high lapses, low renewals)
- poor plan mix (upgrades, downgrades, anti-selection)
- underwriting risk
- credit risk
- operational risk
- availability of claims data
