Medical Expense Insurance Vocab & Notes Chap 3B

Question 1

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.

Answer 1

Basic Medical Expense Insurance

Question 2

A health insurance policy that provides broad coverage and high benefits for hospitalization, surgery, and physician services. Characterized by deductibles and coinsurance cost sharing.

Answer 2

A Major Medical Expense Policy

Question 3

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

Answer 3

The Deductible

Question 4

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”.

Answer 4

A Flat Deductible

Question 5

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

Answer 5

A Corridor Deductible

Question 6

This deductible is 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.

Answer 6

An Integrated Deductible

Question 7

With this Deductible the insured must satisfy a deductible for each accident or illness.

Answer 7

Per-Cause Deductible

Question 8

With this Deductible the insured only has to meet the deductible amount once during the benefit period.

Answer 8

All-Cause Deductible

Question 9

________________ 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.

Answer 9

The Carryover Provision

Question 10

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 %.

Answer 10

Coinsurance

Question 11

_____________ is designed to halt the company’s loss at a given point, as a combined 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.

Answer 11

A Stop-Loss

Question 12

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.

Answer 12

Preexisting condition

Question 13

Tax-advantaged medical savings accounts available to taxpayers in the United States 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.

Answer 13

Health Savings Accounts (HSA)

Question 14

Employer-funded and employer-established, tax-advantaged health benefit plans that pay back employees for out-of-pocket medical expenses and individual health insurance premiums. Unused amounts may be carried forward for pay back in future years. And may be tax-free if the employee paid for qualified medical expenses or a qualified medical plan.

Answer 14

Health Reimbursement Arrangements

Question 15

Tax-free accounts set up with financial institution such as banks and insurance companies. And were created to help employees of small employers, as well as self- employed individuals, pay for their medical care expenses. Qualified ________________ are available for employers with no more than 50 employees.

Answer 15

Medical Savings Accounts (MSA’s)

Question 16

Tax-advantaged accounts that can be set up through a cafeteria plan of an employer. This account allows an employee to set aside a portion of earnings to pay for qualified medical expenses (such as prescription medication) as established in the cafeteria plan.

Answer 16

Flexible Savings Accounts or Flexible Spending Accounts

Question 17

Forms of health insurance providing a stipulated daily, weekly, or monthly indemnity during hospital confinement; payable on an undesignated basis without regard to actual hospital expense.

Answer 17

Hospital Indemnity Policies

Question 18

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

Answer 18

Limited Benefit Policies

Question 19

_________________ 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

Answer 19

Limited Risk (Dread Disease) Policies

Question 20

An insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy.

Answer 20

Critical Illness Policies

Question 21

___________________ cover hospital room and board, miscellaneous hospital fees (such as for lab and x- ray charges), medicines, use of operating room, and supplies. These fees are covered while the insured is confined in a hospital. There is no deductible and the limits on room and board are set at a specified dollar amount per day up to a maximum number of days.

Answer 21

Hospital Expense Policies

Question 22

__________________ 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.

Answer 22

Hospital room and board benefits

Question 23

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

Answer 23

Surgical Expense Policies

Question 24

Under the _____________________, every surgical procedure is assigned a dollar amount by the insurer.

Answer 24

surgical schedule approach

Question 25

_________________ is similar to the surgical 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.

Answer 25

The relative value approach

Question 26

Under the __________________, the surgical expense is compared to what is deemed reasonable and customary for the geographical part of the country where the surgery was performed. This approach is the maximum amount an insurer will consider eligible for reimbursement under a health insurance plan.

Answer 26

the usual, customary, and reasonable approach (UCR)