Health Care Plans Flashcards
8-1: Describe essential terms related to health care plans. 8-2: Specify how medical plan provisions limit recovery by the insured. 8-3: Compare characteristics of types of health care plans. 8-4: Calculate the amount paid on medical expenses under medical expense policies that include provisions limiting recovery by the insured. 8-5: Explain HIPAA provisions related to health insurance. 8-6: Explain COBRA provisions related to health insurance continuity. 8-7: Explain Medicaid provision
Medical Expense Terms
Adverse selection
The tendency of persons with a higher than average probability of loss to seek insurance to a greater extent than do “healthy” persons
Medical Expense Terms
Any Willing Provider
Managed care plan cost containment limiting the number of contracted providers.
Medical Expense Terms
Internal Limits
Cost containment through either exclusion of some treatments or setting of maximum cost payable on other treatments.
Medical Expense Terms
Precertification
Requirement stating that plan provider must first approve some treatments prior to the treatment.
Medical Expense Terms
Pre-existing Condition
Limitation of coverage for conditions in existence prior to policy inception A means to minimize the risk of adverse selection inception. selection.
Major Medical Health Insurance
Comprehensive major medical insurance
Comprehensive major medical insurance • Medical care coverage • In and out of the hospital • High maximum limits • (Relatively) high deductible • Greatest amount of insured flexibility and choice • Higher premiums than managed car
Major Medical Health Insurance
Indemnity Plans
• Insurance plans that uses a third party
payor to restore a claimant to their original
financial state prior to medical treatment.
Major Medical Health Insurance
Stop Loss Limit
• Amount of covered benefits to which the
coinsurance provision is applied
Health Insurance Plan Terminology
Breakpoint
(stop-loss limit
plus deductible)
The point after which the insurer pays 100% of all covered medical
expenses.
Health Insurance Plan Terminology
Coinsurance provision
A policy provision requiring the insured to share a given percentage of covered medical expenses up to a maximum amount.
Health Insurance Plan Terminology
Covered
Charges
Medical treatment for which a health insurance plan provides benefits
Health Insurance Plan Terminology
Deductible
The initial amount of covered expenses that must be paid before reimbursement is received from the insurance policy
Health Insurance Plan Terminology
UCR Tables
Detailed charts for usual, customary, and reasonable charges in a given geographic region
Family Deductible Notes
It’s really more of a deductible cap
• Each person in the family is responsible for meeting his or her own deductible and paying any related medical costs.
• One person in the family can meet only one
deductible.
• Rather than requiring every family member to meet a deductible, the insurer allows for a family cap.
• Once the cap has been met deductibles for any remaining family members are waived
Question 1 - Comprehensive Major Medical Indemnity Policies
Comprehensive major medical policies generally
provide more coverage than other health care
policies for which of the following reasons?
I. they generally have higher coverage limits
II. they provide more freedom of choice
III. they have fewer exclusions
IV. they generally cover fewer types of medical
expenses
a. IV only
b. I and III only
c. II and IV only
d. I, II, and III only
e. I, II, and IV only
Managed Care Concepts
Capitation
• Physician is paid by insurer based on the number of subscribers selecting him or her as their primary care physician (PCP), regardless of services performed
Managed Care Concepts
Fee-for-Service
• Physician is paid by insurer for medical services
performed. Allows for greater flexibility for patients;
generally costs more.
Managed Care Concepts
Managed Care Plans
- HMO – Health Maintenance Organization
- PPO – Preferred Provider Organization
- POS – Point of Service Plan
- EPO – Exclusive Provider Organization
Managed Care Plans
• Health Maintenance Organization –
Three types of HMO plans o Staff model o Group practice model o Independent Practice Association model (IPA)
Managed Care Plans
• Preferred Provider Organization –
o PPOs offer the greatest flexibility
Managed Care Plans
Point of Service Plan –
o POS pays based on where service is
received
Managed Care Plans
• Exclusive Provider Organization
EPO
o technically, an insurance company-run
HMO, but run more like a small PPO
Medical Insurance and Managed Care Payments
Out-of-pocket maximum (stop-loss amount
• The most an insured will be required to pay for
covered expenses. Usually includes the deductible
and any coinsurance amounts.
• Generally applies to major medical or indemnity type
policies.
Medical Insurance and Managed Care Payments
Copayment
• The nominal dollar amount of covered expenses
which the insured will be required to pay in order to
receive medical services. This is not the same as the coinsurance amount
Question 2 - Medical Reimbursement Calculation
Richard Weiss is insured through his employer
in a group indemnity health care plan. His
annual deductible is $200, after which Richard
must pay 20% of additional charges, to a stoploss-
limit of $5,000. In his first claim of the year,
Richard has $500 of covered medical
expenses. How much will his insurer pay?
a. $400
b. $300
c. $240
d. $160
Question 3 - Managed Care Programs
Which one of the following is not considered to
be a managed care program?
a. Health Maintenance Organizations (HMOs)
b. Preferred Provider Organizations (PPOs)
c. Provider Service Networks (PSNs)
d. Medicaid (CMA)
Question 4 - Health Care Plan Costs
Identify the health care plan costs (premiums)
as they would generally would be listed, from
lowest cost to highest cost.
a. HMO, PPO, major medical plan
b. PPO, major medical plan, HMO
c. HMO, major medical plan, PPO
d. major medical, HMO, PPO
HIPAA: Health Insurance Portability & Accountability Act of 1996
Major health insurance-related provisions
(to reduce job lock)
• pre-existing conditions: cannot apply coverage
exclusion for more than 12 months
• when moving to a new job: cannot apply coverage exclusion if there is no break in previous coverage of 63 days or less
• pregnancy not a pre-existing condition
HIPAA: Health Insurance Portability & Accountability Act of 1996
Only applies to comprehensive
health care
• i.e., not ancillary benefits
such as disability, dental, etc.
• not to managed care plans
COBRA (Consolidated Omnibus Budget Reconciliation Act
29
Months
- Extension available
- 11 months (in addition to the original 18 months)
- Available in the event of employee disability
COBRA (Consolidated Omnibus Budget Reconciliation Act
18
Months
- 20 employees or more (up to 102% of full premium)
- Laid off (down-sized, right-sized, structural reengineering)
- Fired (except for gross insubordination)
- Moved from full time to part time
COBRA (Consolidated Omnibus Budget Reconciliation Act
36
Months
- Loss of dependent status
- Divorce
- Employee dies
- Employee qualifies for Medicare
Medicaid
• Medicaid focuses on those lacking financial wherewithal to pay for health care.
• Medicaid is a federally initiated program.
• Administered, and partially funded, at the state level.
• Each state sets its own criteria to qualify for benefits.
• Some who qualify include:
o Recipients of Aid to Families with Dependent Children
(AFDC)
o Children under age 6 with family income at or below
133% of the federal poverty level (FPL).
o Supplemental Security Income (SSI) recipients in most states.
Medical Savings Accounts
Health Savings Accounts (HSA)
- Tax deductible contributions
- Tax-deferred growth
- Uses “High deductible Health Plan”
- Contributions only to age 65
- May be used to pay Medicare Part A or Part B premiums
Medical Savings Accounts
Archer Medical Savings Account
- Precursor to HSA
- Available only to small businesses
- Limited participation
- Replaced in 2003 by HSAs (existing plans grandfathered)
Medical Savings Accounts
Medicare Medical Savings Account
- Offered under Medicare Part C
* Medicare Advantage Plan
Health Savings Account (HSA)
• Allows individuals to pay for health care
expenses on a tax-free basis by using money
deposited in the HSA. Requires a highdeductible
health plan (HDHP).
• HDHP Minimum Deductible (2012)
o $1,200/$2,400 (single/family)
• HDHP Maximum Out-Of-Pocket
o $6,050/$12,100 (single/family)
• Maximum Annual Contribution
o $3,100/$6,250 (single/family)
Medicare Coverage: Part A
Covers inpatient hospital expenses • some home health services • hospice care • skilled nursing care • very limited long-term care Medicare Part A premium • 40 quarters contribution to OASDHI - $0 • 30 to 39 quarters - $248/mo. • less than 30 quarters - $451/mo. Medicare Part A deductible/coverage • $1 156 per spell of illness (60 day period 1,156 between hospitalization—new spell of illness) • after deductible; $0 for days 1–60 • days 61–90; $289 coinsurance per day • after 90 days; 60 lifetime reserve days, $512 coinsurance per day
Medicare Coverage: Part B
Covers physician’s and outpatient expenses • ambulance • supplies (e.g., diabetic, glasses, medical equipment) • lab services and screenings • physical therapy • blood Medicare Part B premium • income $85,000 ($170,000-MFJ); $99.90/mo. • indexed to $213,000; $319.10/mo. Medicare Part B deductible/coinsurance • $140 per year • 20% of all subsequent covered charge
Medicare Coverage: Part D
• Prescription Drug Benefit • Usually pay a monthly premium • Late enrollees may pay a penalty • Coverage example o pay $320 deductible o then 25% copayment of next $2,610 covered expenses o Doughnut Hole: next $3,727.50 out-of-pocket (no insurance benefit) o then pay a (5%) coinsurance amount for remaining expenses o Total out-of-pocket: $4,700 (deductible + copayment + doughnut hole)
Medicare Coverage: Part C Medicare Advantage
• Combine coverage for Parts A, B, and D
• Provide additional benefits not included in
original Medicare program
• MAY provide better coverage at lower cost than a
combination of traditional Parts A, B, D plus a supplement
• Problem: programs not always available in a
given geographic area
Part C: Medicare Advantage Plans Available
- Medicare HMOs
- Medicare PPOs
- Private Fee-for-Service plans (PFFS)
- Special Needs Plans
- Medicare Medical Savings Account (MMSA)
Medicare Supplement Insurance
Medigap plans
• A–J, plus K–N
o no new Plans E, H, I, J
• coordinate with Medicare to fill-in the deductible
and co-pay gaps
• do not generally add substantially to Medicare
benefits
• do not provide any appreciable LTC benefit
Patient Protection and Affordable Care Act (PPACA 2010)
Expands Coverage
- Provided immediate coverage for an additional 15 million.
- Establishes health insurance exchanges and subsidies.
- Extends coverage for dependent children up to age 26
Patient Protection and Affordable Care Act (PPACA 2010)
Eliminates Policy Maximums
- Insurers must accept all applicants
- No limit on coverage for preexisting medical conditions
- No premium change due to differences in enrollees’ health
Patient Protection and Affordable Care Act (PPACA 2010)
Extremely Controversial
- Purported to be a “budget buster.”
* Requires mandatory health insurance for all U.S. residents.
Question 5 - Patient Protection and Affordable Care Act
Under the new Patient Protection and
Affordable Care Act of 2010 (PPACA 10), which
of the following have been eliminated for
comprehensive major medical indemnity plans?
a. copayments
b. maximum policy limits
c. coinsurance amounts below 80/20
d. deductible amounts above $1,000
Question 6 - State Child Health Insurance Program
Which of the following is not true regarding the
State Child Health Insurance Program
(SCHIP)?
a. It was implemented to provide health care
for poor children who qualify for Medicaid.
b. Each state’s plan for coverage must meet a
“benchmark plan.”
c. States may not alter Medicaid rules to
lighten their burdens in meeting the
program’s stipulations.
d. The initial intent of the program was to
spend nearly $50 billion over a 10-year
period for health care for poor children.
Question 7 - HIPAA
The portability/preexisting conditions provisions
of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) apply to
a. disability income insurance.
b. comprehensive health care plans.
c. workers’ compensation insurance.
d. long-term care insurance.