S1: Major Medical Flashcards
Major Medical: what was it a response to?
Response to increase in medical costs once was it was clear that covering only hospital/physician was inadequate for policyholders
One distinguishing factor between major medical coverage (MMC) and earlier coverages
MMC first time disparate sources of health care costs, such as hospital, physician, and ancillary, were combined/ aggregated into a common policy
What do regulators require a minimum combination of covered services for a policy to be called major medical?
What does it prevent and prohibit (2)
Prevent insurers from misleading consumers with subpar policies that use the name “major medical”.
Prohibit policies with unexpected holes in the benefit plan that will disadvantage the policyholder.
services covered by a major medical insurance policy (4)
Impatient, Outpatient, Ancillary, Prescription Drugs
Networks
Insurance carriers that insurers have developed or contracted with provider networks
Networks
Provider Networks
Collection of doctors, health care professionals, hospitals, and clinics who agreed to collaborate with insurers by servicing to insureds
Networks
Geographic Concentration and example
For decision to develop network or contract with existing network. Etc bluecross/shield build own network
Networks
Who decides how restrictive network is and how do they do this?
Insurer and they use combination of cost and health care patterns
Networks Challenges with providers:
Consolidation of health care
prevents selection of specific providers when building network
Networks Challenges with providers:
Rural Areas
insurers cannot be as restrictive as fewer health providers
Networks: Carriers with geographically diverse customers: Contract with network for hire
develop by company who invests resources to rent network to insurer
Health Insurance Plan types (2)
Health Maintenance Organization (HMO)
Preferred Provider Organization (PPO)
Health Insurance Plan
Health Maintenance Organization (HMO)
insured has primary care provider, referral for specialist, go through family doctor and no coverage outside network
Health Insurance Plan
Preferred Provider Organization (PPO)
primary care provider not needed, insured can visit provider outside of network
Benefit Calculation
Cost Sharing
amount of cost paid by policyholders
Benefit Calculation
Deductible
and what is HDHP
Amount insured ays before insurance coverage
High Deductible Health Plan
Benefit Calculation:
Provider Discounts
health care provider participates in an insurer’s network, there is cost of services provided.
Benefit Calculation:
Provider Discounts - Billed Charges
calculated using the retail, or undiscounted, price the provider charges for a service
Benefit Calculation:
Provider Discounts - Allowed Charges
calculated as amount permitted in benefit calculation
Benefit Calculation:
Provider Discounts - Balance Billing
and what mostly cannot do this
Seek payment from insured for billed charge minus allowed charge. Most in-network provider cannot do this
Benefit Calculation:
Coinsurance and when to apply if deductible
proportion of losses insurer is responsible for AFTER deductible
Benefit Calculation:
Out-of-pocket-limits and alternate name
maximum amount insured pays under a policy for a policy period
(stop loss insurance)
Benefit Calculation:
Maximum Limits
maximum amount of benefit paid by insurer under a policy -> yearly basis or lifetime
Benefit Calculation:
Maximum Limits and Affordable Care Act
no lifetime dollar limit on essential health care benefits so limit by number of visits
Benefit Calculation: Internal Limits
exist for subset of benefit etc dollar value or limits
Benefit Calculation: Copays and alternate to what benefit calculation method?
cost sharing that occurs when Health Care service is provided and alternate to deductible
Benefit Calculation: Copays - Prevent over utilization
reduce non-essential units
Benefit Calculation: Copays - Separate Admin Benefits
benefit for prescription drugs administered by pharmacy benefit manager. PBM needs claim data when deductible but not copay when refilling
Related Products:
Comprehensive Major Medical Coverage
covers smaller frequent costs and large unexpected costs so lower deductible
Related Products: Choosing Perils = Anti-selection
tendency of individuals who expect to experience high losses to purchase insurance q
Related Products: Catastrophic Major Coverage
expenses not covered by comprehensive major medical coverage etc losses higher than regular
Related Products: Short Term Medical Coverage
single limit term, 3,6,9, 12 months, pre existing condition results in claims investigated
Related Products: Short Term Medical Coverage
Individual mandate
require most individuals to have basic health insurance
Related Products: Higher Risk Pool Plan
insure people who do not have access to medical insurance due to pre-existing condition or have limited insurance coverage due to health condition
Related Products: Consumer Directed Plan
health insurance plans with high deductible combined with underlying personal spend accounts
Related Products: Medical Savings Account (MSA)
limited to self-employed individuals and small businesses, insured has a High Deductible Health Plan, withdraw before age 65 tax and penalty if not used for medical
Related Products: Health Savings Account (HSA)
available to everyone with an HDHP. withdraw after age 65 tax and no penalty if not used for medical
ACA
Affordable Care Act
ACA restrictions on plan design (2)
They define what constitutes a health insurance policy, as individuals required to have basic health insurance
standardize health insurance, easier for consumers to compare health insurance policies.
Affordable Care Act Restriction with EHB
All individual and small group health insurance plans that are not grandfathered in must cover essential health benefits (EHBs):
Essential Health Benefit
Ambulatory patient services
Emergency services
Hospitalization
Pregnancy, maternity, and newborn care
Mental health and substance use disorder services
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
Affordable Care Act Restriction that could be excluded or included as Riders (2)
Mental health and substance use disorder services
Maternity and newborn care
Affordable Care Act Restriction:
- Services cost sharing not permitted
- lifetime and annual dollar limits are not allowed
preventive services, such as standard vaccinations and blood pressure screenings.
EHBs.
Affordable Care Act Restriction:
actuarial value (AV) 4 levels with %target amount and continuous range
platinum: 90%
gold: 80%
silver: 70%
bronze: 60%
all ranges is +/- 2%
Affordable Care Act Restriction:
actuarial value
percentage of total claim expenses that are expected to be paid by the insurer for a standard population
Affordable Care Act Restriction:
out-of-pocket-limit
Plans must set an out-of-pocket limit that cannot exceed the limit specified by the government. All cost sharing must contribute to the out-of-pocket limit.
Affordable Care Act Restriction:
Plans that are sold on the public exchange need to satisfy the following tests/standards:
meaningful difference
network adequacy
discriminatory service areas
discriminatory cost sharing
done by the government for outlier premium rates
