Medical Expense Insurance

Question 1

All-Cause Deductible

Answer 1

The insured only has to meet the deductible amount once during the benefit period.

Question 2

Basic Medical Expense Insurance

Answer 2

Insurance is a health insurance policy that provides “first dollar” benefits for specified (and limited) health care, such as hospitalization, surgery, or physician services.

Characterized by limited benefit periods and relatively low coverage limits.

Question 3

Carryover Provision

Answer 3

Allows an insured to defer current health charges to the following year’s deductible instead of the current year’s deductible.

The major medical deductible carryover period normally applies to expenses incurred during the last three months of the plan year.

Question 4

Coinsurance

Answer 4

The principle under which the company insures only part of the potential loss, the policyowners paying the other part.

For instance, in a major medical policy, the company may agree to pay % of the insured expenses, with the insured to pay the other %.

Question 5

Comprehensive Major Medical

Answer 5

Combines the features of basic expense coverage and major medical coverage, sold as one policy.

Cover practically all medical expenses, hospital, physicians, surgical, nursing, drugs, laboratory tests, etc.

Question 6

Corridor Deductible

Answer 6

Comes in to play when a major medical policy is supplementing basic coverage that contains no deductible, the corridor deductible is not applied until the basic coverage has been exhausted.

Question 7

critical illness policies

Answer 7

A critical illness plan is a policy that pays the insured a lump sum following the diagnosis of an illness covered under the plan.

Critical-illness plans often cover diseases like cancer, organ transplant, heart attack, stroke, renal failure, and paralysis, among others.

Question 8

Deductible

Answer 8

An amount of expense or loss to be paid by the insured before a health insurance policy starts paying benefits.

Question 9

Flat Deductible

Answer 9

A stated dollar amount that applies to a covered loss (e.g. $500). This deductible is applied per occurrence, per insured individual.

Sometimes referred to as an “initial deductible”.

Question 10

flexible savings account

Answer 10

An arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars.

Allowed expenses include insurance copayments and deductibles, qualified prescription drugs, insulin, and medical devices.

Cafeteria play of an employer.

Question 11

Health Reimbursement Arrangements

Answer 11

Are Employer-funded and employer-established, tax-advantaged health benefit plans that reimburse employees for out-of-pocket medical expenses and individual health insurance premiums.

Unused amounts may be carried forward for reimbursement in future years.

Reimbursements may be tax-free if the employee paid for qualified medical expenses or a qualified medical plan.

Question 12

Health Savings Accounts (HSA)

Answer 12

Are tax-advantaged medical savings accounts available to taxpayers in the U.S. who are enrolled in a high-deductible health plan (HDHP).

The funds contributed to an account are not subject to federal income tax at the time of deposit.

Question 13

Hospital expense policies

Answer 13

insurance coverage that protects policyholders against losses associated with being treated in a hospital for a medical issue.

Medical expense insurance is commonly purchased to supplement a regular health insurance policy.

Extended medical stays can be extremely expensive.

Some people buy this type of insurance rather than rely solely on their health insurance policy to cover every cost.

Question 14

hospital indemnity policies

Answer 14

Hospital indemnity insurance helps by putting recovery first over hospital bills. …

Depending on the plan, hospital indemnity insurance gives you cash payments to help you pay for the added expenses that may come while you recover.

Typically plans pay based on the number of days of hospitalization.

Question 15

Hospital Room and Board Benefits

Answer 15

cover expenses for occupancy of the room and bed, general nursing care, food and beverages, and personal hygiene items.

These limits may not provide for the full amount of hospital room and board charges incurred by the insured.

For example, if the hospital expense benefit was $200 per day and the hospital actually charged $400 per day, the insured would be responsible for the additional $200 per day.

Question 16

Integrated Deductible

Answer 16

Used when a major medical plan is supplementing basic coverages.

Example, if the major medical has a $500 deductible and the insured has basic coverage of $500 or more, then, in the event of a claim, the amount paid by the basic coverage satisfies the major medical deductible.

However, if the basic does not cover the entire deductible amount of the major plan, the insured is required to make up the difference.

Question 17

limited benefit policies

Answer 17

Limited-benefit plans are medical plans with much lower and more restricted benefits than major medical insurance, but with lower premiums.

Limited-benefit plans include critical illness plans, indemnity plans (policies that only pay a pre-determined amount, regardless of total charges), and “hospital cash” policies.

Restrict benefits to specified accidents or diseases, such as travel policies, dread disease policies, ticket policies, and so forth.

Question 18

Limited Risk (Dread Disease) Policies

Answer 18

Provide a variety of benefits for a specific disease such as cancer or heart disease.

Benefits are usually paid as a scheduled, fixed-dollar amount for specified perils or medical procedures such as hospital confinement or chemotherapy.

Question 19

Major Medical Expense Policy

Answer 19

A health insurance policy that provides broad coverage and high benefits for hospitalization, surgery, and physician services.

Characterized by deductibles and coinsurance cost sharing.

Question 20

Medical Savings Accounts (MSA’s)

Answer 20

A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.

By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs.

Are available for employers with no more than 50 employees.

Question 21

Per-Cause Deductible

Answer 21

The Insured must satisfy a deductible for each accident or illness.

Question 22

Preexisting conditions

Answer 22

An illness or medical condition that existed before a policy’s effective date;

Usually excluded from coverage, through the policy’s standard provisions or by waiver.

Question 23

Relative Value Approach

Answer 23

Similar to the Surical Schedule Method.

The difference is that instead of a flat dollar amount being assigned to every surgical procedure, a specified set of units is assigned.

The policy will carry a stated dollar-per-units amount (known as the conversion factor) to determine the benefit.

Question 24

Stop-Loss

Answer 24

Designed to stop the company’s loss at a given point, as an aggregate payable under a policy, a maximum payable for any one disability, or the like; also applies to individuals, placing a limit on the maximum out-of-pocket expenses an insured must pay for health care, after which the health policy covers all expenses.

Question 25

Surgical Epense Policies

Answer 25

Commonly written in conjunction with hospital expense policies.

These policies pay for the costs of surgeons’ services, whether the surgery is performed in or out of the hospital.

Coverage includes surgeon’s fees, anesthesiologist, and the operating room.

Question 26

Surgical Schedule Approach

Answer 26

Every surgical procedure is assigned a dollar amount by the insurer.

Question 27

Usual, Customary, and Reasonable Approach (UCR)

Answer 27

The surgical expense is compared to what is deemed reasonable and customary for the geographical part of the country where the surgery was performed.

The UCR approach is the maximum amount an insurer will consider eligible for reimbursement under a health insurance plan.