Unit 16: Medical Expense Plans Flashcards
What is fee-for-service?
•Hospitals & physicians provide care & are paid a fee
•refer to customers as “insureds” because these plans are issued by insurance companies
What is a prepaid plan?
•individual pays a health maintenance organization (HMO) a specified amount
•HMO agrees to provide whatever care the individual needs during the year
•refer to customers as “subscribers/participants” because these plans are offered by entities consisting of the providers themselves, such as HMOs
What is a comprehensive medical expense plans?
•Cover all types of care in one plan
•the most comprehensive types will cover preventive care & immunizations as well as necessary medical treatment
What is a benefit schedule?
•used by some medical expense policies to pay providers for their services
•medical expense policy that pays a provider a set fee for their services regardless of the charge
•each type of service is listed with the amount of payment
•if a provider bills more for a service than is shown in the schedule, the patient must pay the difference
What are usual, customary, & reasonable charges?
•used by other medical expense policies to pay providers according to what amount is usual, customary & reasonable to charge for that service in that geographic area
•as long as the provider’s charge is in line with the amount other providers in the area are charging for that service, the policy will pay the full amount
•if the provider’s charge is more than the usual, customary, & reasonable amount, the patient may be billed for the difference
What are preferred provider organization (PPO) plans?
•have a panel of physicians & hospitals under contract to provide health care services & generally cover 80%-100% of the cost
•individuals who choose to use other providers are covered for a smaller % of visits, such as 60%
What is a medical expense policy that pays a provider a set fee for their services regardless of the charge?
Benefit schedule
What are basic hospital, medical, & surgical policies?
•original medical expense plans
•characterized by low coverage limits & first-dollar coverage (no deductibles)
•coverage & payments listed individually for in-hospital benefits, miscellaneous hospital benefits, surgical, physician, & nursing services
•if a procedure is not on the list, it’s not covered
•if expenses exceed the scheduled payment limit, the insured pays the difference
•insured does not have immediate “out of pocket” expenses
—>deductibles, co-pays, & co-insurance not included in these plans
•however, limit of coverage is low & insured frequently pays “out of pocket” on the back end
What is major medical insurance?
•covers a much broader range of medical expenses with fewer gaps & provides higher maximum limits
•2 groups:
-supplemental major medical insurance
-comprehensive major medical insurance
What is supplemental major medical insurance?
•insured has a basic policy
•major medical pays when basic ends
•packages together a basic plan & major medical coverage
•basic plan will pay covered expenses with no deductible up to the basic plan policy limits, then the major medical coverage kicks in
•when leaving the basic plan, because the limits are reached, the insured must pay a “corridor deductible” to begin using the major medical coverage
What is comprehensive major medical insurance?
•stand alone policy & benefits are available after the deductible is satisfied
•another feature is “coinsurance”-the sharing between the insurer & insured of covered expenses that exceed the deductible amount
—>sharing ends when the stop-loss limit (maximum out of pocket limit) is reached
What are the covered expenses typically included in a major medical insurance plan?
•hospital inpatient room & board, including intensive & cardiac care
•hospital medical & surgical services & supplies
•physician’s diagnostic, medical, & surgical services
•other medical practitioners’ services
•nursing services, including private-duty service outside a hospital
•anesthesia & anesthetist services
•outpatient services
•ambulance service to & from a hospital
•first aid & emergency room care
•x-rays & other diagnostic & laboratory tests
•radiological & other types of therapy
•prescription drugs administered in the hospital
•blood & plasma
•oxygen & it’s administration
•dental services resulting from injury to natural teeth
•convalescent or rehabilitative facility care
•home health care services
•prosthetic devices when initially purchased
•casts, splints, trusses, braces, & crutches
•rental or durable equipment such as hospital-type beds & wheelchairs
•hospice care-terminal illness care that includes pain relief, symptom management, & counseling but no curative treatment
Deductibles
•required the insured to pay a certain amount of their medical expenses each calendar year before coverage begins
•policies that cover entire families usually have a family deductible
•with supplement major medical insurance, the deductible kicks in after the basic policy limits are reached
—>the “corridor deductible” applies to begin using the supplemental plan & another deductible would apply
Coinsurance
•cost-sharing feature that keeps major medical insurance affordable
•insured pays a certain % of medical expenses after the deductible has been satisfied
•different coinsurance arrangements are available, but the most common is 80-20
—>insurer pays 80% & insured pays 20% during the time the sharing arrangement applies
What is a stop-loss limit?
•often included in major medical policies
•insured is no longer required to pay coinsurance when medical expenses exceed this amount
