GBA2 - Underwriting Flashcards
Reimbursement to insured if loss occurs
Indemnification
Individuals more likely to use unneeded health services when they aren’t paying full cost
Moral Hazard
Combined provision of healthcare services & insurance function into single entity (ex: HMO or PPO)
Managed Care Plans
Rates paid by payers are established by payer before services provided (per procedure, diagnosis, day, bundled, or global payment)
Prospective Payment
Provider paid for fixed amount per covered life per period, regardless of amount of services provided. Form of prospective payment. Work harder & decrease utilization.
Capitation
Provider works harder, increases utilization, increases profit
Fee-For-Service
Type of reimbursement ACA uses?
Shifted from fee-for-service to prospective pmt model (including bundling & capitation)
Medicare initiative that rewards acute care hospitals with incentives for high quality care
Value Based Purchasing (VBP)
Form of fee-for-service reimbursement where single sum covers all healthcare services for procedure. Promotes efficiency.
Bundled Payment Method
Fixed $ amount given by ER to EE to be applied to premium of health insurance plan the EE selects from offerings given by ER
Defined Contribution Plan
Actual amount we pay over expected loss (includes insurer’s admin costs, reserves, and profits)
Loading Fee or Loading %
= pure premium / (1-loading %)
Gross Premium
Relative variation in actual claims experience from what was expected. Increases with dispersion of possible loss. (declines with # of lives covered)
Objective Risk
All individuals/groups put in single risk pool. Uses actual claim experience.
Community Rating
Uses characteristics associated with increase or decrease in claims experience
Manual Rating (adjusted community rating)
Insurers examine past claims experience and then sets premium
Prospective Experience Rating
Insurer has open checking account where insurer writes checks to play claims/fees. Usually for larger firms. Firm bears risk.
Retrospective Experience Rating (self insured)
