Final Exam: Chapter 21, 24, 25, 26, 30 Flashcards
Blue Cross
originated as nonprofit
associations, usually organized by hospitals under
special state-enabling legislation to provide for prepayment of hospital expenses
Blue Shield
organizations were organized by state or local physicians
associations to facilitate prepayment of physicians’
fees
What did Blue Cross and Blue Shield organizations represent?
an early attempt to cut out the insurance agency
What do Blue Cross and Blue Shield organizations do?
you pay into a group of hospitals to pre-pay your hospital stay and surgery expenses, eventually merged together
how long have commercial insurance companies been around?
about 90 years
what do commercial insurance companies do?
sell health insurance to make a profit, sold like someone would sell property & liability insurance, some are mutuals, initially provided on a reimbursement basis, shrinking
what are the government health insurance plans?
Medicare and Medicaid
Medicare
the federal government’s most extensive and expensive health insurance plan
What does Medicaid cover?
long-term disable people as well as 65 +HMO
HMOs
brings all of your healthcare under one roof, cuts out the insurance company, you pay the provider of your healthcare directly, the insurance element is derived from the manner in which they charge their services
capitation approach for HMOs
subscribers pay a fee and in return receive comprehensive medical care, many were formed many years ago by physician’s groups
commercial insurance companies are what
private
PPOs
provide more flexibility and leniency, HMO lite, insurance company would provide list of people you could go to and insurance company had contract with organization to control price
who is medicare administered by
states
health insurance coverages
original was hospitalization insurance, major medical insurance
hospitalization insurance
first attempt at trying to lower costs
major medical insurance
involved high deductibles, co-insurance where you pay a percentage of of bill up to a certain amount, lifetime maximum benefits, affordable care act outlined the idea of this
what is the best way to get health insurance?
an employer-sponsored plan with group
What did the Affordable Care Act do?
expanded Medicaid and was a way for more people to qualify for Medicaid, gave subsidies for people to buy health insurance, created penalties for people who didn’t have health insurance, pre-existing condition exclusions were eliminated, underwriting had been eliminated in this field
What is the biggest single investment of your lifetime?
homeowner’s insurance
monoline home insurance
piece together a policy which led to a packaged homeowner’s policy, most common is an open perils special policy
Who is HO-3 for?
the person who owns the home
Coverage A
house/structure
Coverage B
other structures
Coverage C
personal property
Coverage D
loss of use
Coverage E
personal liability
What coverages are found under HO-4?
C, D, E
Who is HO-4 for?
renters
What is covered under Coverage B?
garage, deck, pool, fence, detached buildings
What is covered under Coverage D?
like a house fire, and pays for you to stay elsewhere
Open perils
you cover everything unless excluded
Named perils
if it isn’t there it isn’t covered
actual cash value
can be depreciated
replacement cost coverage
you get today’s value for the item
What do common homeowner’s endorsements do?
they are a modification of a policy to improve it that you pay more for, takes out theft limitations
Homeowners Cost / Risk Factors
Fire Protection
Type of Construction
Geographic Location
Size of Deductible
Credit Score
mono-line fire dwelling insurance
for rental dwellings
What is the most common form of mono-line fire dwelling insurance?
DP-3, similar to HO-3
How can coverages be added to mono-line fire dwelling insurance?
by endorsement
MH-3
Written on an all risk special form
flood insurance
underwritten and reinsured by the federal government
national flood insurance program
managed by the Federal Emergency Management Agency (FEMA)
How is flood insurance made available?
by buying it directly or from private insurance companies that have a write your own policy
inland marine insurance
insures items such as jewelry, guns, hand tools, silverware, computer, collectibles, hearing aids
boat/watercraft insurance
Most ISO forms under HO-3 provide essentially no coverage for this, coverage is very broad but includes property & liability coverage
What does flood insurance involve?
high deductibles, low coverage, high premiums
collision coverage
accident is the keyword, doesn’t matter who is at fault
Why do most people not carry flood insurance?
Cost, not every area has it available to them
6 auto insurance premium / cost factors
1) age and sex of driver(s)
2) driving record
3) type of vehicle
4) use of vehicle
5) geographic location
6) credit score
3 types of potential losses for auto
1) legal liability
2) injury to the insured person or members of the insured’s family
3) damage or loss of the auto itself
How did the Affordable Care Act benefit people?
took away underwriting, eliminated pre-existing condition exclusions
