Health Insurance and Health Care Cost Management Flashcards
1
Q
Coinsurance
A
the split payment for covered expenses after a deductible is first paid by the insured. The most common is 80/20 which means that covered expenses are paid 80% by the insurance company and 20% by the insured.
2
Q
Stop Loss Limit
A
-represents the maximum out of pocket expense before the policy pays 100% of covered expenses.
Example: a company that has a $5,000 stop loss limit, the insured pays the deductible and 20% of the next $5,000 for a total out of pocket expense of the deductible plus $1,000.
3
Q
Deductibles
A
- When there is a loss, the insured pays the deductible.
- The amount you pay for covered health care services before your insurance plan starts to pay.
- deductibles apply only to covered expenses
4
Q
Co-pay or co-payment
A
Often $15 to $25 dollar charges for each office visit under most managed care plans.
5
Q
Internal Limits
A
- many policies limit what will be paid for in certain treatments.
- often imposed on chiropractic care, physical therapy, acupuncture, and mental health care as well as others
6
Q
Major Medical Insurance
A
- generally referred to as comprehensive major medical or traditional indemnity health insurance.
- generally provide $1 Million or more in lifetime coverage and exclude very little that is related to illness or injury.
- these plans usually have a deductible, co pay and stop-loss limit.
- unlike managed care plans they do not typically provide benefits for preventative care
7
Q
Managed Care Plans
A
- technically it is not insurance, but are prepaid care plans.
- PPO’s, HMO’s and POS’s
- the underlying concept behind all managed care plans is that of covering preventative care. As a result almost all managed care plans cover physicals and baby’s visits to the doctor.
8
Q
PPO Plans
A
- Generally have a primary care physician (PCP) who is chosen from among a list of practitioners by the patient.
- the PCP must recommend and refer the patient for treatment to any specialist.
- the PPO contracts with physicians and other providers who agree to take reduced fees (as part of a network) in exchange for prompt payment and referrals.
9
Q
HMO Plans
A
- different from PPO’s because they also manage the plan and provide the benefits.
- providers are employees of the HMO rather than having only contracts as with PPO’s
10
Q
POS Plan
A
-includes a network of participating medical providers and other provisions common to a managed care plan, but also includes indemnity -type benefits for patients receiving benefits from non-participating providers.
11
Q
Medicare
A
- a federal government health insurance program that covers individuals:
- age 65 or older
- who have been receiving Social Security disability benefits for at least 24 months and/or who are on kidney dialysis and are currently in end-stage renal failure.
12
Q
Medicare Part A Covers
A
- hospital care but limited to 90 days
- a skilled nursing care facility benefit, assuming certain requirements are met
- home health service benefits as a result of a hospital stay
- care in hospice for the “terminally ill” (life expectancy of 6 months or less)
13
Q
Medicare Part A Skilled Nursing Benefit Qualifications
A
- the patients condition must require skilled nursing. This is different than home nursing care which medicare does not provide for (but a long-term care policy would)
- The patient must have been in the hospital for 3 or more consecutive days for the same medical condition
- the patient must be admitted to the skilled nursing facility within 30 days after leaving the hospital
- the patients condition must be expected to improve
- a medical professional must certify that the patient requires skilled nursing care.
14
Q
Medicare Part B Covers
A
- physicians services
- home health services not requiring hospital stay
- Diagnostic Tests
- the cost of any medical equipment needed
- all hospital outpatient services required
- does NOT cover routine physical exams, exams for eye glasses, routine foot care exams
15
Q
Medicare Part D
A
- provides some coverage for prescription drugs.
- individuals who elect coverage pay a monthly premium as well as a yearly deductible.
- government pays about 75% of the prescription costs
16
Q
Medicare Supplement (medigap) Policies
A
- additional coverage purchased to cover deductibles, co-payments, and other expenses that medicare wont cover.
- NAIC has designed 10 plans for the federal government
17
Q
Medigap Plan A Coverage
A
-Basic care package
18
Q
Medigap Plan B Coverage
A
- Basic care package
- Part A Deductible
19
Q
Medigap Plan C Coverage
A
- Basic Care package
- skilled nursing care
- part A deductible
- part B deductible
- foreign travel
20
Q
Medigap Plan D Coverage
A
- Basic care package
- skilled nursing care
- part A deductible
- foreign travel
- at home recovery
21
Q
Medigap Plan E Coverage
A
- basic care package
- skilled nursing care
- part A deductible
- foreign travel
- preventative screening
22
Q
Medigap Plan F Coverage
A
- basic care package
- skilled nursing care
- part A deductible
- part B deductible
- 100% excess doctor charge
- Foreign travel
23
Q
Medigap Plan G Coverage
A
- Basic care package
- skilled nursing care
- part A deductible
- 80% excess Dr charges
- Foreign Travel
- at home recovery
24
Q
Medigap Plan H Coverage
A
- Basic care package
- skilled nursing care
- part A deductible
- foreign travel
- prescription drug
25
Medigap Plan I Coverage
- basic care package
- skilled nursing care
- part A deductible
- 100% of excess Dr's charges
- foreign travel
- at home recovery
- prescription drug
26
Medigap Plan J Coverage
- Basic care package
- skilled nursing care
- part A deductible
- part B deductible
- 100% of excess Dr's Charges
- foreign travel
- at home recovery
- prescription drug
- preventative screening
27
Taxation of Premiums and Benefits
- premiums paid are potentially deductible, although they must exceed, along with other expenses, a total of 7.5% of a taxpayers adjusted gross income.
- for self employed individuals, a taxpayer is allowed to deduct 100% of of insurance premiums as an "above the line" deduction to reach AGI.
28
Traditional Indemnity Plans
- offered by insurance companies
- coverage includes diagnostic, medical, hospital, surgical services
- Insured individual pays a deductible amount per person or per family
- plan usually pays 80% after deductible and then 100% after "stop loss limit" is reached
- benefits for medical expenses are paid on a reimbursement basis, with the reimbursement amount "capped" at a large lifetime amount (usually $1 MM)
29
Preferred Provider Organization (PPO)
- Fee for service plan
- patients see providers within a network (or sometime outside a network)
- May have a small co-payment cost per visit (could be large if employee/patient receives care outside the network)
30
Health Maintenance Organization (HMO)
- Pre-paid plan
- patients choose salaried doctors within the HMO
- Patients primary care physician acts as the gatekeeper before referring employee/patient to specialist
- may have small or no co-payment
31
Point-of-Service Plans (POS)
- hybrid of PPO & HMO Plans
- Like an HMO, participants designate an in-network physician to be their primary care provider
- Like a PPO, patients may go outside of the provider network for health care services, but with increased costs
- typically more expensive than an HMO, but cheaper than PPO
32
COBRA
- requires some employers to offer terminated EE's who have had a qualifying event the right to purchase medical coverage at group rates
- The terminated employee then assumes the cost of paying the employer's share of insurance premiums, but this total cost may not exceed more than 102% of the overall cost of providing coverage to all employees.
33
Qualifying events for COBRA
- voluntary or involuntary termination of an employee
- switch from full time to part time of an employee
- Spouse's and other dependents qualify if there is a death, divorce, legal separation, or eligibility for medicare
- Children of covered employee qualify if there is a loss of dependent status due to plan age limitations or marriage.
- Qualified beneficiary has a 60 day window after the qualifying event to elect coverage and 45 days to pay the premium
34
Continuation of COBRA benefits continues until the earliest of:
- 18 months
- 29 months if disabled during the first 60 days of COBRA benefits
- 36 months if a second qualifying event (death or divorce of terminated employee) occurs during the coverage period
- the date the plan terminates for all employees
- the date the premium for coverage is not paid on time
- the qualified beneficiary becomes covered under another employer-sponsored health plan
- the qualified beneficiary becomes eligible for medicare
- the widowed or divorced spouse remarries and becomes covered under the new spouse's employer-sponsored health plan.
35
COBRA notification requirements
- employer must notify the plan administrator 30 days after the qualifying event of termination, death, eligibility of medicare, or change in work status
- employer must notify the plan administrator 60 days after the qualifying event of divorce or loss of child's dependent status
- Plan Administrator notifies the qualified beneficiary of the right to elect continuation of coverage within 14 days.
36
Employers Exempt from COBRA
- employers with less than 20 employees for at least half of the prior year
- government employees
- church employees
37
HIPPA
- mandates that there cannot be enforcement of a pre-existing medical condition clause if:
- an employee was covered by the prior employer's health insurance plan for at least 12 months, and
- less than 63 days has elapsed since the employee lost coverage under the prior employer's plan
- Allows states to set up a mechanism for providing individuals with a choice of health policies; if a state fails to do so, the federal regulations require insurers, HMOs, and health providers in the state to offer coverage.
38
Health Savings Account (HSA)
- high deductible health plan - premiums are therefore less expensive
- individuals/families make tax deductible contributions to an HSA of $6,750 for a family and $3,400 for an individual
- Deductible must be at least $2,600 for a family and $1,300 for an individual plan
- Age 55 or older are allowed a $1,000 catch up contribution
- individuals eligible for medicare are not allowed to deduct their contributions
- earnings inside the HSA are not taxed
- distributions are tax free if used to pay for qualifying medical expenses, 10% penalty and income tax paid if not
- penalty is waived if individual is 65 or older, disabled, or deceased.
39
Archer Medical Savings Account (MSA)
- pilot program that preceded HSA's
- no new MSA's are permitted, however current MSA's are permitted to continue to operate
- participation was primarily limited only to self-employed individuals to accompany a high deductible plan.
40
Health Reimbursement Account (HRA)
- reimburses employee for medical expenses as claims are submitted
- can help to cover expenses that are not covered by medical insurance
- it is typically set aside by the employer to cover the initial expenses up to a plan-specified amount, after which time co-insurance provisions apply
- Any medical expenses paid are tax deductible by the employer as long as the plan is not discriminatory in favor of highly compensated employees.
