Insurance Types Flashcards
Cost Sharing
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How health plan costs are shared
Deductible
Coinsurance
Copayment
(not premiums, balance billing amounts for out of network, or non covered services)
Copayment
medical cost sharing in a health insurance plan that requires an insured person to pay a FIXED dollar amount when a medical service is received.
The insurer is responsible for the rest of the reimbursement.
Deductible
A fixed dollar amount during the benefit period - usually a year - that an insured person pays before the insurer starts to make payments for covered medical services.
Plans may have both per individual and family deductibles.
Gatekeeper
Under some health insurance arrangements, a gatekeeper is responsible for the administration of the patient’s treatment; the gatekeeper coordinates and authorizes all medical services, laboratory studies, specialty referrals and hospitalizations
Coinsurance
A form of medical cost sharing in a health insurance plan that requires an insured person to pay a stated percentage of medical expenses after the deductible amount, if any, was paid.
Managed care Provisions-
Features within health plans that provide insurers with a way to manage the cost, use, and quality of health care services received by group members. Examples include:
- Preadmission certification : Failure to obtain a preadmission certification in non-emergency situations reduces or eliminates the health care provider’s obligation to pay for services rendered.
- Utilization review - The process of reviewing the appropriateness and quality of care provided to patients. Utilization review may take place before, during, or after the services are rendered.
- Preadmission testing - A requirement designed to encourage patients to obtain necessary diagnostic services on an outpatient basis prior to non-emergency hospital admission. The testing is designed to reduce the length of a hospital stay.
Premium
Agreed upon fees paid for coverage of medical benefits for a defined benefit period.
Premiums can be paid by employers, unions, employees, or shared by both the insured individual and the plan sponsor.
Primary care physician (PCP)
A physician who serves as a group member’s primary contact within the health plan.
In a managed care plan, the primary care physician provides basic medical services, coordinates and, if required by the plan, authorizes referrals to specialists and hospitals.
Third party administrator (TPA)
An individual or firm hired by an employer to handle claims processing, pay providers, and manage other functions related to the operation of health insurance.
The TPA is not the policyholder or the insurer.
Usual, customary, and reasonable (UCR) charges
charge is the provider’s usual fee for a service that does not exceed the customary fee in that geographic area, and is reasonable based on the circumstances.
Does PPO use UCR?
Instead of UCR charges, PPO (Preferred Provider Organizations) plans often operate based on a negotiated (fixed) schedule of fees that recognize charges for covered services up to a negotiated fixed dollar amount
Indemnity plan -
A type of medical plan that reimburses the patient and/or provider as expenses are incurred.
What is a managed care plan
Managed care refers to health care insurance plans designed to provide care at the lowest possible cost. In order to make coverage affordable, managed care plans require that patients follow certain rules
There are three major types of managed care plans:
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Point-of-Service (POS) plans.
HMO
What is it
Health maintenance organization
need a PCP: coordinate care, and to refer to specialists or hospitals in network
Group Model HMO
HMO pays one medical group a per capita rate
group distributes money among its medical staff
(Kaieser)
Staff Model HMO
Pt can use limited number of providers who are employees of the HMO and work in HMO facility
Network Model HMO
MOST COMPREHENSIVE
HMO has contracts with multiple physician groups (many multispecialty geoups)
ie Emblem health
Individual Practice Association (IPA)
independent physicians with own offices that form a group and contract with the HMO
Capitation:
what is it
is a flat periodic payment per enrollee to a healthcare provider ny the third party payer
(used in HMO)
Fixed payments regardless of volume of services, risk sharing all three parties
1) Managed care company- UP FRONT AMOUNT
2) Patient- PREMIUM
3) Provider- receive for each patient regardless of volume: short-term risk that the costs of providing service, (including profits), might exceed the capitation payment.
Focus on PREVENTION and health and WELLNESS
Does HMO provide comprehensive care?
YES
Once recommended by a Primary Care Physician insured patients can be referred to a large network of specialists for more specific needs
How are providers paid by HMO?
fixed, pre-paid fee per person (capitation)
Health Maintenance Organization Characteristics
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- Centered on Primary Care Physician
- Gatekeeper
- Care manager
- Specialist referrals - HMOs often provide integrated care and focus on prevention and wellness.
- It generally won’t cover out-of-network care except in an emergency.
Advantages of an Health Management Organization
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Decreased third party payer costs when compared to a “traditional” fee-for-service plan.
HMOs have fewer out-of-pocket costs for the enrollee, including smaller co-payments and deductibles.
HMOs cover preventive care, essential health benefits and prescription drugs. When receiving health care services from network providers, claims are filed directly to the HMO.
Disadvantages of an Health Management Organization
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An HMO may not provide coverage if you receive health care services from a doctor, hospital or other health care provider outside its network or service area
A HMO member may need a referral to see a specialist
HMOs may not be the best choice if travel is regular or have a specific physician that is not part of the HMO’s provider network.
Also, you have no guarantee that doctors and hospitals in your HMO’s provider network will stay in the network.
What is a PPO?
Preferred Provider Organizations (PPO’s)
allowed to go in network without referral from PCP (no gatekeeper)
flexibility to go out of network : but pay the cost of your treatment in full, and then submit the bill for reimbursement to the insurance company. (higher copay)
PPO Subscription based:
Is a subscription-based medical care arrangement where membership allows a substantial discount below the regularly charged rates of the designated professionals partnered with the organization
PPO Access Fee
Preferred provider organizations themselves earn money by charging an access fee to the insurance company for the use of their network (unlike the usual insurance with premiums and corresponding payments paid either in full or partially by the insurance provider to the medical doctor).
–higher copay, deductible, premium
What is POS
hybrid of HMO and PPO plans.
Like HMO: pt designates in network PCP
Like PPO: can go out of network
If leave network: pay most of bill unless primary care provider has made a referral to the out-of-network provider. Then the medical plan will pay the fees.
POS
pros/cons
pros
1-can leave network
2-comprehensive choice of providers (ie if live in rural area)
cons
- high deductible out of network (low copay in network)
- might waste premium money if they sign up for POS coverage and never use out-of-network specialists.
- out of network paperwork
- may need referrals to go out of network
point-of-service products
At the same time, HMOs have developed products, called point-of-service products, which permit covered people to elect to receive care outside of the HMO network, typically with higher cost sharing.
Risk Pooling
private health coverage pools the risk of high health care costs across a large number of people -they pay premium based on average cost of medical care for the group of people
–>To make healthcare affordable for most people
should result in expected costs for the pool that are reasonably predictable for the insurer and relatively stable over time
(average level of health risk in the pool should not vary dramatically from time to time, although costs will rise with overall changes in price and utilization).
Adverse Selection
health coverage providers take steps to avoid attracting a disproportionate share of people in poor health into their risk pool
(b/c then cost will rise and healthy people will not want to be in the pool)
