54 terms

Section 5 - Medical Expense Plans

Texas Life & Health exam prep
2 Types of Medical Expense plans
1) Reimbursement or Indemnity Plans - sold by private insurance companies
2) Health Benefit Service Plans - sold by HMOs and PPOs
Reimbursement or Indemnity Plans
Insured could go see any doctor or any hospital and be covered anywhere. Insureds pay their own bill and then submit it to the insurer for reimbursement up to the benefit limits scheduled in the policy. in some cases, the doctor or hospital could submit the bill directly to the insurer and be paid
on a fee-for-service basis
Restricts your usage of doctor and hospitals within a certain area in order for coverage to apply
Health Benefit Service Plans
Are not actually insurance companies. They offer much more comprehensive care on a pre-paid basis, although
their subscribers may have a much more limited choice
of doctors and hospitals. They provide medical services on a usual, reasonable and customary basis for their particular area of operation rather than a specific benefit schedule
First-dollar coverage
An insurance policy feature that provides full coverage for the entire value of a loss without a deductible. Typically, this coverage exists all the way up to the full amount on the policy-as stated in the policy
Basic Hospital Expense Policies
A first-dollar coverage with no deductible that pays for
hospital room and board only, although some policies will also cover miscellaneous expenses up to a certain dollar limit for such items as X-rays, ambulance service, and prescription drugs. Due to the Principle of Indemnity, this type of policy will pay the policy limit or the amount of your claim, whichever is less
Medical-Surgical Expense Policies
This policy covers surgical services of a physician performed in the hospital. Usually, the policy contains a Schedule of Operations coverage indicating the maximum amount payable for each operation listed. This is also a first-dollar coverage with no deductible
Schedule of Operations
a list indicating the maximum amount payable for each operation listed
Basic Physicians' Fees for Non-surgical Hospital Confinement Policy
Also called a Regular Medical Expense policy. Covers doctors' visits at the hospital even though no surgery was performed. also a first-dollar coverage with no deductible, and may include Emergency Treatment, Nursing Expenses, and Maternity Expenses
Basic Plan or Base Plan of coverage
When clients purchased one or more of these three basic coverages: Basic Hospital Expense Policies, Medical-Surgical Expense Policies, and/or Basic Physicians' Fees for Non-surgical Hospital Confinement Policy
Sharing of the loss between the insurance company and the insured after the deductible has been satisfied. This is a percentage of a provider's charge that you may be required to pay AFTER you've met the deductible
Major Medical Expense Policies
Provides benefits for catastrophic injury or sickness. Originally designed to supplement the coverage provided by a Base Plan
Corridor Deductible
Once a major medical policy has paid the full stated amount of limits or benefits to an insured, if additional expenses still exist, this deductible is the amount that must be borne by the insured before additional coverage is available.
Calendar deductible
A deductible that must be met in a calendar year, no matter how many claims are made
Major Medical plans
Covers you both in and out of the hospital, including hospital room and board and charges for physicals. Coverage is provided for both sickness and accident. Covered expenses
include nursing fees, miscellaneous hospital charges (such as X-rays, ambulance, and prescription drugs), and often, psychiatric care and treatment for drug or alcohol abuse
Blanket basis
A basis for insuring all items within a single amount of insurance without specifically identifying each item
Major Medical plan coverage
Usually provided on a blanket basis, without specifying individual dollar limits, during your Benefit period. For example, your Major Medical policy limit is $1,000,000 and your benefit
period is your lifetime.
Family deductible
Medical bills for all family members covered under the plan will count toward meeting the deductible
Per Person deductible
when one covered person reaches the deductible, the insurance plan will begin to pay claims for that person
Common accident deductible
if members of the same family are injured by the same cause, only one deductible applies
Stop Loss provision
A policy designed to limit claim coverage (losses) to a specific amount. An additional feature you purchase from the insurance company. This provision limits your liability on a
particular claim to a maximum amount that is stated in the policy. Only applies after the deductible has been paid
Health Maintenance Organizations (HMOs)
Prepaid health plans. They provide health care coverage for a fixed premium paid in advance. From a members standpoint, the monthly fee, plus the small co-payments, pay for their entire medical needs. They require that you select a primary care physician (PCP) who is responsible for managing and coordinating all of your health care
The principal objective of an HMO
to reduce medical expenses by stressing preventive medicine
through physical exams and diagnostic procedures
HMO network
A specified geographical area known as the service area in which the HMO must operate
HMO three models of operation
Group Practice Model (GPM)
Staff Model
Independent Practice Association Model (IPA)
Group Practice Model (GPM)
Also known as the Medical Group Model. Comprises a group of physicians of varying specializations practicing in one facility. The HMO contracts with the medical group to provide health care services to the HMO's members
Open-panel medical group
The medical group provides services to HMO members in addition to other, nonmember patients. Physicians
are not salaried and treat HMO subscribers in their own offices
Staff Model
The type of HMO in which the health plan hires physicians directly and pays them a salary- a health care delivery systems owned, operated, and staffed by the HMO; Kaiser
Independent Practice Association Model (IPA)
A network of individually practicing physicians
who contract with the HMO to provide health care services to its members. These physicians are located throughout a geographic area and operate independently of each other
Gatekeeper System
The member selects a primary-care physician who in turn provides or authorizes all care. Any referral to a specialist must be authorized by the primary-care physician. In an emergency situation, the member's treatment will still be covered, but the member must notify the primary-care physician as soon as possible. Members are required to involve the HMO's primary-care physician to ensure that claims will be paid
Preferred Provider Organizations (PPOs)
A group of various hospitals and private physicians, in a given area, who agree to provide services to the insurer's clients at a predetermined price. In return, the insurer designates these doctors and hospitals as preferred providers. If an insured seeks treatment from a this type of provider, the coverage for the services rendered is 100% minus a nominal co-payment for each office visit or hospital stay. If the insured elects to receive treatment from a non-preferred provider, then the reimbursement benefits will be reduced to the usual 80%
Prepaid Dental Insurance Plans
A corporation, partnership, or other entity provides or arranges for the provision of dental care services to enrollees or subscribers in return for a prepayment. It also covers treatment on a nonscheduled basis, depending upon what is usual and customary, or on a scheduled basis with specific policy limits for such things as fillings, crowns, orthodontics, etc. It usually is sold with deductibles and coinsurance similar to that on Major Medical policies. Cosmetic dental services are usually not covered
Third-Party Administrator (TPA)
NOT an insurance company. A firm that provides administrative services for employers and other associations having Group insurance policies. The third-party administrator acts as a liaison between the insurer and the employer in matters such as certifying eligibility, preparing reports
required by the state, and processing claims
Self-funded health care plan
A type of job-based health insurance coverage, where the employer pays the claims with its own funds. This is different from fully insured plans, where the employer contracts with an insurance company, such as Aetna or Blue Cross Blue Shield, and the insurer covers the employees and dependents.These plans are only subject to federal law
Medical Expense exclusions or impairment riders
Medical Expense policies usually exclude the following:
1. Custodial care in nursing homes
2. Dental care, unless required due to a covered accident
3. Vision/Hearing care
4. Sickness or accident covered by Workers' Compensation
5. Care in military or government hospitals
6. Hearing aids and eyeglasses
7. Well-baby care in the hospital nursery
8. Cosmetic surgery, unless required due to a covered accident
9. War-related injury or sickness
10. Intentionally self-inflicted injury
Inside Limits
A maximum-dollar amount payable for a particular treatment or condition.
Impairment Riders
Health insurance underwriters sometimes attach additional exclusions called ______ _____ riders to new policies at issue
Utilization or case management
Used by HMOs to try and prevent unnecessary treatments
Utilization Management Provisions
Provisions designed to ensure that you receive the care you need in the most appropriate setting and at the most competitive price. They include the requirement that the insured obtain a second surgical opinion before having elective surgery. If the client fails to obtain the second opinion,
coverage may be reduced.
Prospective Review (prior to treatment)
Also known as pre-certification, this states that the policy requires that a doctor verify, in advance, that hospitalization is necessary, recommend outpatient treatment if
possible, or determine that no treatment is necessary
Concurrent Review (during treatment)
Requires a medical monitor to consult with the doctor in an effort to manage costs during treatment. Some plans also require ambulatory services to be utilized, which encourages insureds to take advantage of outpatient services in lieu of hospitalization. If the insured fails to do so, the health plan may only pay a portion of the bill
Retrospective Review (after treatment)
Requires a medical monitor to review treatment previously provided to determine if it was appropriate under the circumstances
A provider is paid a set fee per HMO enrollee he services, regardless of how much service they require
Negotiated fee-for-service
Another method of paying HMO providers--it pays a certain percentage of the charges billed by the provider and the patient pays the balance. With this method of payment, the provider is paid a separate fee for each procedure or service performed
Fee schedule basis
The HMO could pay the physician group for each procedure on this basis, which is a table of customary rates paid to members of the group
Used as an incentive to encourage providers to reduce utilization of services, a percentage of a provider's payment is "held back" during the plan year to offset or pay for any cost overruns for referral or hospital service
Point-of-Service (POS) plans
HMOs that provide coverage for out-of-network services. members can choose to receive medical care from out-of-network doctors, without first getting approval from their primary care physician. Like PPOs, however, coverage is at a reduced reimbursement rate
Managed indemnity plans
Essentially traditional insurance plans that have borrowed some of the HMO techniques. Unlike HMOs, however, provider reimbursement is on a fee-for-service basis and
the insured person is responsible for deductibles and coinsurance. The attraction to this type of plan may be the unlimited choice of doctors, but such plans are not priced much lower than traditional indemnity plans
The HMO cost-sharing method. These are flat fees enrollees are required to pay for each doctor or hospital visit
Health insurance deductibles require the insured (the person who is covered under a health insurance policy) to pay a certain amount toward his health coverage before the insurance company has to begin paying under the health insurance policy. They are NOT a feature of HMOs, but of indemnity plans and PPOs
A regionally managed health care for active duty members and their families, retirees and their families and survivors of all uniformed service members who are not eligible for Medicare. This medical plan offers eligible beneficiaries three choices for their health care
Tricare Prime
Military Treatment Facilities (MTFs) are the principal source of health care. Active duty personnel are enrolled in this and pay no fees. Active duty family members pay no enrollment fees, but they must choose a Tricare option and apply for enrollment in in this. This coverage for active duty members and their families is provided without any deductibles or co-payments
Tricare Extra
a preferred provider option for active duty members , similar to PPO
Tricare Standard
A fee-for-service option (previously known as the CHAMPUS program)