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health . policy > types of insurance > Flashcards

types of insurance Flashcards

1
Q

the tendency of those who experience greater health risks to apply for and continue their coverage under any given health insurance plan. When adverse selection increases, health insurance companies experience greater expenses and may raise rates.

A

Adverse risk selection

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2
Q

Individual accounts that may be set up by self-employed individuals and those who work for small companies. Funds in the accounts are used to pay medical expenses.

A

Archer Medical Savings Accounts

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3
Q

(“risk selection”) recruiting only healthier-than-average individuals so the insurer can make greater profits (one reason it can be very hard for individuals who need costly health care to get or keep insurance). One strategy would be to offer lower premiums and higher co-pays, as healthy people who don’t expect to use health insurance would choose this option.

A

Cherry picking

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4
Q

The amount you must pay for medical care after you have met your deductible. Typically, your plan will pay 80 percent of an approved amount, and your coinsurance will be 20 percent, but this may vary from plan to plan

A

Coinsurance

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5
Q

a concept which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status.

A

Community rating

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6
Q

traditional (indemnity) health insurance where you and your plan each pay a portion of your health expenses, usually after you meet a yearly deductible. In most cases, you can choose any physician, hospital, or other provider (non-network based coverage).

A

Fee-for-service insurance

why this is a problem:

We pay our doctors, hospitals and other medical providers in ways that reward doing more, rather than being efficient.
Most insurers

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7
Q

Employees use pre-tax dollars to set up these accounts and draw down on them to pay qualified medical expenses during the year. Unused amounts are forfeited at the end of the year.

A

Flexible spending arrangements

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8
Q

—An insurance company’s list of covered drugs.

A

Formulary

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9
Q

a form of managed care in which you receive all of your care from participating providers. You usually must obtain a referral from your primary care physician before you can see a specialist.

A

HMO

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10
Q

Health reimbursement arrangement

A

An account established by an employer to pay an employee’s medical expenses. Only the employer can contribute to a health reimbursement account.

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11
Q

do you pay taxes on a health reimbursement arrangement

A

NO

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12
Q

who decides what you can pay for with a HRA

A

Your employer

usually have to use contributions that same year they are credited

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13
Q

Health savings account

A
  • a medical savings account available to taxpayers who are enrolled in a High Deductible Health Plan. The funds contributed to the account aren’t subject to federal income tax at the time of deposit. Funds must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don’t spend them.

a lot of people

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14
Q

High-deductible health plan

A

—A plan that provides comprehensive coverage for high-cost medical events. It features a high deductible and a limit on annual out-of-pocket expenses. This type of plan is usually coupled with a health savings account or a health spending account.

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15
Q

High-risk pool

A

A State-operated program that offers coverage for individuals who cannot get health insurance from another source due to serious illness. Typically, premium are much higher than one would pay for individual coverage if you were healthy (see “risk pools”).

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16
Q

Coverage purchased independently (not as part of a group), usually directly from an insurance company.

A

Individual health insurance

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17
Q

Individual market

A

Policies for people that aren’t connected to job-based coverage.

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18
Q

Individual rating

A

risk based on individual’s factors, premiums based on an individual’s likely health care needs

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19
Q

methods of paying for health care

A

out-of-pocket

individual private Insurance

employment based group private insurance-bismark

government financing-beveredge

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20
Q

(hybrid of out of pocket national systems – individual is paying the entire cost of the insurance, basically paying for their health care) and Bismark, and may supplement government programs (i.e. Medigap or Medicare Part D – Pharmacy coverage)

A

individual private insurance

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21
Q

employment based group private insurance

A

(Bismark – pure and simple)

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22
Q

goverment financing accounts for this amount of health care in the US

A

Pays for almost two-thirds of health care in the US

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23
Q

why do we pay so much for healthcare (8)

A

higher administrative costs

complicated system for billing
a 2-to-1 ratio of specialists to

primary care physicians

more standby capacity

more malpractice claims

less social support for the poor

higher drug prices

higher health care worker
incomes

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24
Q

what is meant by more standby capactiy

A

The United States has 4.2 times as many MRI scanners

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25
Q

Some initiatives very cost like

A

immunizations

26
Q

what initiatives are not cost effective

A

BP and breast CA screening and treatment)

27
Q
  • Policies for people that aren’t connected to job-based coverage.
A

Individual market

28
Q

Managed care

A

An organized way of getting health care services and paying for care. Managed care plans feature a network of physicians, hospitals, and other providers who participate in the plan.

29
Q

when does open enrollment usually occur

A

—A set time of year when you can enroll in health insurance or change from one plan to another without benefit of a qualifying event (e.g., marriage, divorce, birth of a child/adoption, or death of a spouse). Open enrollment usually occurs late in the calendar year, although this may differ from one plan to another.

30
Q

Moral hazard describes

A

Moral hazard describes how behavior changes when people are insured against losses.

31
Q

Preferred provider organization

A

, but your out-of-pocket expenses will be lower if you see only plan providers.

32
Q

The prevailing cost of a medical service in a given geographic area.

A

Reasonable and customary charge

33
Q

Risk pool

A

Health insurance risk pools are special state government programs created by state legislatures to provide a safety net for the “medically uninsurable”

34
Q

everything that might affect the individual’s risk of incurring expenses, or pay-outs, by the insurance company (

A

Underwriting, variables

35
Q

is a tax-exempt account used to pay or reimburse you and your family’s medical expenses if you are covered by a high-deductible health insurance plan.

A

Health Savings Account (HSA)

. The money you take out of the account is tax-free if you use it for qualified medical expenses

36
Q

HSA requirements

A
  • You must be covered by a high-deductible health plan (HDHP) on the first day of the month, with a minimum deductible of $1,300 for individual coverage or $2,600 for family coverage.
37
Q

helps those employees of small businesses and self-employed people who are covered by a high-deductible health plan to pay the health care costs of themselves, their spouses, and their dependents.

A

Medical Savings Account (Archer MSA)

38
Q

If you are employed who can contribute to MSA

A

either you or your employer may contribute to your Archer MSA in any given year, but not both.

39
Q

Requirements for an Archer MSA

A

You are employed by a “small employer

You are covered by a high-deductible health plan (HDHP).

40
Q

The maximum annual contribution to an MSA

A

MSA is 75% of your family health plan’s annual deductible amount, or 65% of the deductible if you have a self-only plan

41
Q

Indemnify.

A

To compensate for loss; to provide security for financial reimbursement for costs incurred by health care expenses.

42
Q

1986 - COBRA

What is the excpetion with COBRA

A

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers with 20 or more employees to offer continued health coverage to terminated employees and dependents for a specified period (18 or 36 months).

Required to provide but not pay for it … thus doubling, tripling, or increasing costs even more for terminated employees.

43
Q

The percentage of total average health care costs for covered benefits that a plan will cover.

A

Actuarial Value

44
Q

The higher the actuarial value, the ____

For example, if a plan has an actuarial value of 70%

A

less patient cost-sharing the plan will have on average

on average, you would be responsible for 30% of the costs of all covered benefits.

45
Q

When given a choice, people who choose to purchase insurance are likely to be a group with higher than average losses. (Also applies to a choice between low-option and high-option plans.)

A

Adverse selection

46
Q

Risk aversion

A

the degree to which a certain income is preferred to a risky alternative with the same expected income.

47
Q

what is meant by the phrase Loading cost

A

administrative and other costs associated with underwriting insurance policies

48
Q

Loading cost =

A

risk premium + administrative costs + marketing costs + profits

49
Q

variables assessed in underwriting

A 
Health history
Age
Gender
Occupation
Geographic location
Genetic makeup?
50
Q

payments that are episode based

A

bundled

51
Q

Episode based

A

care coordinated payments

52
Q

Share savings; move towards global budget

A

accountable care organiztions

53
Q

Quality reporting and EHS use incentive program

A

Merit-Based Incentive Payment System (MIPS)

54
Q

a hybrid of HMO and PPO plans.

A

Point-of-Service Plans (POS)

55
Q

Point-of-Service Plans (POS)

A

Like an HMO, participants designate an in-network physician to be their primary care provider. But like a PPO, patients may go outside of the provider network for health care services.
When patients venture out of the network, they’ll have to pay most of the cost, unless the primary care provider has made a referral to the out-of-network provider, in which case, the medical plan will pick up the tab.

56
Q

gives employers flexibility to offer various combinations of benefits in designing their plan

A

 Health Reimbursement Arrangements

57
Q

HSA is limited to a

A

hdhp

58
Q

FSA is limited to

A

no plan but your employer owns it

59
Q

actuary value of bronze plans

A

60%

60
Q

actuary value of silver plans

A

70%

61
Q

actuary value of gold plans

A

80%

62
Q

actuary value of platinum plans

A

90%

health . policy (6 decks)

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