Medical Plans and Health Insuring Corporations (CH9)

Question 1

Capitation

Answer 1

A method of payment from the HIC to the primary care physician (PCP) of members.

Question 2

Credentialing

Answer 2

The process of screening potential HIC for licensing, quality, ethics, legal compliance, sufficiency of malpractice insurance, etc., before the HIC signs a contract with that provider.

Question 3

Co-Insurance

Answer 3

In Health Insurance, a provision that the insured and insurance company will share covered losses in agreed proportion. For example, a person may have a $500 deductible and co-insurance (a sharing) of 20% of the first $10,000 of a covered claim.

Question 4

Community Rating

Answer 4

A method of HIC rate calculation where the rate charged to a group or individual for the HIC coverage is based on the profit or loss experience of the HIC’s entire population.

Question 5

Deductible

Answer 5

Dollars or percentage of expense that will not be reimbursed by the insurer.

Question 6

Experience Rating

Answer 6

The loss record of an insured, a class of coverage, or an insurance company.

Question 7

Fee-for-Service Health Plan

Answer 7

A traditional health care insurance policy in which the insurance company pays fees for the services provided to the insured persons covered by the policy. This type of health insurance offers the most choices of doctors and hospitals.

Also known as Medical Expense Insurance.

Question 8

Indemnity

Answer 8

Insurance is designed to restore the policy owner to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only; the insured should not profit from a loss situation.

Question 9

Insured

Answer 9

The party to an insurance agreement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render service. In prepaid hospital service plans, the insured is called the subscriber.

Question 10

Major Medical Insurance

Answer 10

A type of Health Insurance that provides benefits for most types of medical expe3nses incurred up to a high limit, subject to a deductible. Such contracts may contain a percentage participation clause (sometimes called the co-insurance clause). A major Medical policy pays expenses both in and out of the hospital.

Question 11

Pre-existing Condition

Answer 11

A condition of health or physical condition that existed before the policy was issued.

Question 12

Pre-Paid Health Plan

Answer 12

Provides comprehensive health care for members who pay a flat fee for services, regardless of whether outpatient or hospital treatment is needed.

Question 13

Stop-Loss Amount

Answer 13

The maximum out-of-pocket expense the insured pays in a calendar year, after health insurance. This includes the deductible and the co-insurance portion paid by the insured.

Question 14

Sara and Jim have a son who is mentally challenged and will be a dependent on them indefinitely. At what age must they provide documentation on their son’s condition in order to continue covering him on their major medical policy?

Answer 14

19

Question 15

State law has required which provision regarding adoption to be included in all medical insurance policies?

Answer 15

If the adoptive parents have an insurance policy with maternity benefits and the adoptive parents are legally required to pay the maternity expenses of the natural mother and the child is adopted within one year of birth, then the insurance company must pay the natural mother’s maternity expenses.

Question 16

How many hours of nursery care for a well born baby must be provided by medical insurance plans?

Answer 16

48

Question 17

When an insurance company bases its payment of benefits on the normal provider’s charges within a certain geographic region, the company is using the

Answer 17

usual, customary, and reasonable charges method.

Question 18

Bob has a major medical policy with an initial $1,000 deductible and 80/20 co-insurance. If he incurs covered medical expenses of $4,000, he would receive benefits of

Answer 18

$2,400.

Question 19

In most managed indemnity plans, the insured must obtain prior approval from the insurance company for most elective procedures and some testing procedures which are expensive. This is called

Answer 19

Prospective Review.

Question 20

While Ken is hospitalized for injuries and physical therapy related to an auto accident, there is consultation between his doctors and the HIC. What is this dimension of consultation called?

Answer 20

concurrent

Question 21

What best describes a preferred provider organization?

Answer 21

third-party organization providing health care at a reduced fee

Question 22

Ambulatory services under case management provisions try to monitor:

Answer 22

The cost effectiveness of outpatient services

Question 23

Bob, who has a family medical plan with a $5,000 deductible, wants to establish a Health Savings Account (HSA). How much of his deductible may Bob put into the account?

Answer 23

100%

Question 24

Andrea has a major medical policy with a $250 deductible, an 80/20 co-insurance provision, and a $5,000 stop-loss provision. She underwent radical surgery this year, incurring total medical bills of $32,000. Under the provisions of her policy, how much will she have to pay toward these expenses, assuming all are covered?

Answer 24

$5,250

Question 25

Which program is designed to provide medical assistance to uninsured individuals who are under 19 years of age and whose family income is between 150% and 200% of the federal poverty guidelines?

Answer 25

CHIP

Question 26

Benefits under a major medical policy are expressed as

Answer 26

a percentage of covered expenses

Question 27

Bill has purchased a new health insurance plan that offers incentives to lose weight, stop smoking, and makes him aware of the charges of different providers for the same procedure. What type of plan has Bill bought?

Answer 27

CDHP-
Consumer Driven Health Plan: tried to educate the insured and offer incentives to take more control of medical expenses. If the insured lives a healthier lifestyle, medical expenses should be lower.

Question 28

What type of health care provider generally pays claims only on a reimbursement basis for diagnosis, consultation, and treatment?

Answer 28

commercial insurer.

Commercial insurance companies still write plans on a traditional reimbursement basis.

Question 29

Which plan offers HIC benefits if you stay in the network, but also allows out of network benefits?

Answer 29

POS

Point of Service plan. provides out of network benefits

Question 30

Once several members of a family insured under the same major medical policy are involved in an accident, the coverage usually requires that:

Answer 30

Only one deductible needs to be satisfied for all injuries the family received in the same accident

Question 31

How do PPOs differ from HICs?

Answer 31

Subscribers are not required to use the approved doctors.

Question 32

What is the name of the account an employer allows an employee to establish for the payment of unreimbursed medical or dental expenses where deposits are made on a pre-tax basis and must be used by December 31st or they are lost by the employee?

Answer 32

Flexible Spending Account- allow pre tax dollars. Money can be removed from the account tax-free to pay medical and dental expenses considered to be out-of-pocket like co-pays, deductibles, or co-insurance payments.

Question 33

What is the correct procedure when filing a complaint?

Answer 33

written complaint must be reviewed internally by the insurer.

Question 34

The rate of premium for coverage under a HIC for basic and supplemental health services is referred to as

Answer 34

prepaid basis.

Question 35

What is the mandated benefit for treatment of alcohol/substance abuse on an outpatient basis?

Answer 35

100/0 of $550 after the deductible

Question 36

Health insurance companies are required to provide coverage for well child visits up to age

Answer 36

9