Chapter 9 Finance

Blue Cross/Blue Shield plans prepaid hospital and medical expense plans under which health care services are provided to plan participants by member hospitals and physicians
community rating approach to health insurance premium pricing policyholders in a community (area) pay the same premium without regard to their personal health, age, gender or other factors
comprehensive major medical insurance A health insurance plan that combines into a single policy the coverage for basic hospitalization, surgical, and physician expense along with major medical protection
coordination of benefits provision a provision often included in health insurance policies to prevent the insured from collecting more than 100 percent of covered charges; it requires that benefit payments be coordinated if the insured is eligible for benefits under more than one policy
deductible the initial amount not covered by an insurance policy and thus the insured’s responsibility; it’s usually determined on a calendar-year basis or on a per-illness or per-accident basis
disability income insurance insurance that provides families with weekly or monthly payments to replace income when the insured is unable to work, because of a covered illness, injury or disease
exclusive provider organization (EPO) a managed care plan that is similar to a PPO but reimburses members only when affiliated providers are used
group health insurance Health insurance consisting of contracts written between a group, (employer, union, etc. ) and the health care provider
group HMO an HMO that provides health care services from a central facility; most prevalent in larger cities
guaranteed renewability policy provision ensuring continued insurance coverage for the insured’s lifetime as long as the premiums continue to be paid
Health Insurance Portability and Accountability Act (HIPAA) Federal law that protects people’s ability to obtain continued health insurance after they leave a job or retire, even if they have a serious health problem
health maintenance organization (HMO) an organization of hospitals physicians, and other health care providers who have joined to provide comprehensive health care services to its members, who pay a monthly fee
health reimbursement account (HRA) an account into which employers place contributions that employees can use to pay for medical expenses. Usually combined with a high-deductible health insurance policy
health savings account (HSA) a tax-free savings account-funded by employees, employer, or both- to spend on routine medical costs. Usually combined with a high deductible policy to pay for catastrophic care.
indemnity (fee-for-service) plan Health insurance plan in which the health care provider is separate from the insurer, who pays the provider or reimburses you for a specified percentage of expenses after a deductible amount as been met
individual practice association (IPA) a form of HMO in which subscribers receive services from physicians practicing from their own offices and from community hospitals affiliated with the IPA
internal limits a feature commonly found in health insurance policies that limits the amounts that will be paid for certain specified expenses, even if the claim does not exceed overall policy limits
long-term care the delivery of medical and personal care, other than hospital care, to persons with chronic medical conditions resulting from either illness or frailty
major medical plan an insurance plan designed to supplement the basic coverage of hospitalization, surgical, and physicians expenses; used to finance more catastrophic medical costs
managed care plan a health care plan in which subscribers/users contract with the provider organization, which uses a designated group of providers meeting specific selection standards to furnish health care services for a monthly fee
medicaid a state-run public assistance program that provides health insurance benefits to those who are unable to pay for health care
medicare a health insurance plan administered by the federal government to help persons age 65 and over, and others receiving monthly social security disability benefits, to meet their health care costs
Medicare Advantage plans commonly called Plan C, these plans provide Medicare benefits to eligible people, but they differ in that they are administer by private providers rather than by the government. Common supplemental benefits include vision, hearing, dental, general checkups, and health and wellness programs
optional renewability contractual clause allowing the insured to continue insurance only at the insurer’s option
participation (co-insurance) clause a provision in many health insurance policies stipulating that the insurer will pay some portion- say 80 or 90 percent- of the amount of the covered loss in excess of the deductible.
point-of-service (POS) plan a hybrid form of HMO that allows members to go outside the HMO network for care and reimburses them at a specified percentage of the cost
preexisting condition clause a provision in most individual health insurance policies permitting permanent or temporary exclusion of coverage for any physical or mental problems the insured had at the time the policy was purchased. The Patient Protection and Affordable Care act of 2010 outlawed such expulsions. face
preferred provider organization (PPO) a health provider that combines the characteristics of the IPA form of HMO with an indemnity plan to provide comprehensive health care services to its subscribers within a network of physicians and hospitals
prescription drug coverage a voluntary program under Medicare (commonly called part D), insurance that covers both brand-name and generic prescription drugs at participating pharmacies. participants pay a monthly fee and a yearly deductible and must also pay part of the cost of prescriptions, including a co-payment or co-insurance
supplementary medical insurance (SMI) a voluntary program under Medicare (commonly called Part B) that provides payments for services not covered under basically hospital insurance (Part A)
waiting period (elimination period) the period, after an insured meets the policy’s eligibility requirements, during which he or she must pay expenses out-of-pocket; when the waiting period expires, the insured begins to receive benefits
workers’ compensation insurance Health insurance required by state and federal governments and paid nearly in full by employers in most states; it compensates workers for job-related illness or injury
medical costs number one reason for bankruptcy
pay routine and major medical costs health insurance helps
protect against economic loss in the event of serious accidents or illnesses importance of health insurance
62 In 2012, __ of US personal bankruptcies were attributable to medical costs
true individual health insurance is not offered through employer
health insurance marketplace individual health insurance has higher premiums than group insurance, directly from private insurance companies or on ____
created by ACA as means of assisting qualified individuals and families purchase individual health insurance Health insurance market place
age, smoking, status of community they live in premiums for individual health insurance
preexisting conditions all plans must cover essential health benefits ____, and preventative care
preventative care employees don’t pay anything out of pocket for
ACA ___ gives a penalty to employers wit more than 50 employees and do not offer affordable health care for full time
30 full time is __ hours a week
comprehensive medical expense coverage, including prescription drugs to employees and dependents group insurance is a contract between a group (UCA) and a provider (UNITED Health Care) provides
attract and retain employees primary reason employers offer group health insurance
true employers are NOT required nor mandated to offer health insurance to employees
group health insurance plans through various employers private health insurance plans are available to individuals or family as
large employers __ employers are more likely to offer health insurance to their employees. have more cash flow cost of providing care to each employee and dependent is lower
exployer subsidy, portion paid by employer is not taxable to employee majority of employers pay part of premium for employee and dependent. why?
fee-for-service plans traditional indemnity plans also called
pays annual deductible in tradition indemnity plans, health insurance will begin paying its share after insured
higher lower deductible ___ insurance premium
unlimited choice of doctors and hospitals traditional indemnity places offer
eligible costs traditional indemnity plans pay deductible plus
UCR charges reimbursements for traditional indemnity places are based on
usual, customary and reasonable UCR charges
insured if doctor chargers more than UCR charges (as determined by insurance provider) may make ___ responsible for the excess
insurer pays provider directly or reimburses insured when they submit claims for medical treatment in traditional indemnity places the health care services are separate from insurer
UCR charges many indemnity plans provide providers who agree to accept insurance and charge ___ set by insurance company
fee negotiated before insured seeks benefits. most insurance companies (managed care) network of select providers that agree to accept a prearranged reimbursement fee for service
health care providers in managed care plans monthly payments are made directly to
designated doctors and hospitals in managed care plans they have ____ that provide services
prevention Managed care plans hold down costs by controlling amount of care provided and emphasizing __
copayments Managed care plans charge monthly plans plus ___
low out of pocket expenses (only cost is copayment for office visits and prescriptions) advantages of HMO
members limited to network of health care provideres disadvantages of HMO
Health Maintenance Organizations (HMOs) organization of hospitals, physicians, and other healthcare providers that provides comprehensive health care services to its members
group basis HMOS are only offered on a
Preferred Provider Organizations (PPOs) provide broader network of “approved” physicians and allow out-of-network providers at higher cost
higher deductible and coinsurance provisions and out of pocket expenses out of network PPO financial incentive to stay in network is
Exclusive Provider Organizations (EPOs) members use affiliated providers or bear entire cost out of pocket
employees must use providers in specified network of physicians to receive coverage. no coverage outside network. PPOs
Point-of-service Plans ((POS) reimburse members similar to indemnity plan when providers are outside of network
HMO and PPO POS plans are a combination of
Blue Cross/ Blue Shield now organized as for-profit independent corportaions
Blue Cross ___ acts as intermediary between groups that want healthcare and physicians who contract to provide their services
specified payments Blue cross contracts with hospitals that agree to give specified hospital services to members in exchange for
HMOs and PPOs Blue Cross/ Blue Shield offers
Medicare administer by centers for Medicare and Medicare services (CMS)
to qualified people 65 and older and to those receiving SS disability benefits Medicare is availabl to
payroll taxes paid by employers employees and the self-employed how is medicare payed for
FICA 1.45% of earnings (employers add 1.45% too) are paid to ___ to pay for medicare
basically hospital insurance Part A of medicare
hospital room and board, other impatient and outpatient care Part A of medicare covers
while workgin premium for medicare is paid while
supplementary medical insurance Part B of medicare is
optional coverage available for a premium if eligible for part A Part B supplementary medical insurance is (medicare)
Part B Medicare covers doctors, surgeons, lab tests, x-rays, and other services, including some home health care. (outpatient )
prescription drug coverage. monthly premium Part D of medicare is
true if you add Part D of medicare after eligibility you may have to pay a penalty
Medicaid nations primary health care for low income, high need americans
federal and state program that helps pay for those living with limited resources Medicaid is
medicaid largest payer for long-term care
57 government pays __% of cost of medicate
federal Medicaid is the largest source of ___ revenue
Medicaid state-run public assistance progream for those unable to pay for health care
58 over ___ covered by Medicaid
premiums paid by employers for workers injured on the job Workers’ Compensation insurance
TX, OK, NJ workers’ comp is requirement in all states except for
medical, rehabilitation, disability income, lump-sum payments for death and dismemberment coverage of workers’ comp include
employees right to sue for negligence workers’ comp insurance is given in exchange for
to provide more people to access to needed services at affordable rates the goal of ACA is to
individual mandate, coverage of young adults, elimination of preexisting coverage, insurance exchanges Key elements of the ACA of 2010
individuals must have insurance. there’s a penalty if do not have Key Elements of the ACA individual mandate
evaluate healthcare cost risk, determine available coverage and resources, choose a health insurance plan Health insurance decisions
group dental services mostly offered through __ insurance plans
dental Medicare doesn’t pay for ___ insurance
cover certain accidents Accident policies cover
coverage limited to specific disease or illness Sickness policies (dread disease policies) cover
a calendar-year or per-indicdent basis deductibles are determined on a
HMO with exception of ___ all have deductible and coinsurance
company pays a portion of medical expenses after a deductible Coinsurance
6,600 or 13,200 Established by ACA the maximum out of pocket cost limit is
deductibles, copay, and c0insurance ____ apply to maximum out of pocket expenses
prgnancy and abortion, mental illness, rehab coverage, COBRA terms of coverage
before was considered a preexisting condition ACA made easier for pregnant woment to get care they need
COBRA provides opportunities for employees and dependents to continue coverage under health insurance that provided by the employer if the employee voluntarily or involuntarily terminates employment for 18 months, while still pay gin premiums
requires insured to receive approval from insurance before entering hospital for scheduled stay preadmision certification
preadmission certification, continued stay review and second surgical options cost containment provisions for medical expense plans
continued stay review to receive reimbursement insured secure approval from insurance organization or any stage extending original stay limit
second surgical options many plans require second options on nonemergency procedures and may reduce benefits paid in absense
involves the delievery of medical and personal care, other than hospitalization, to persons with chronic medical conditions in nursing home, assisted living commnunity or patients home. long-term care
41 __% of long-term care provided to people under 65
to stay home and not be institutionalized number one reason for long-term insurance
nursing home and in home most financial planners recommend policies for long term
inabilities to do activities of daily living long term eligibility requirements
skilled, intermediate care, and custodial care and in home services covered in long-term care
waiting period in long term care you pay expenses during
but while you are healthy, but the right types, but not more than needed, understand what the policy covers and when it pays benefits how to buy long-term care insurance
provides families with weekly or monthly payments to replace income lost when insured is unable to work due to an illness, injury or disease disability income
nonaccidental means primary cause of disability income are due to
ability to work (earning income) most important asset
25 ___% of 20 year olds disabled before age 67.
1165 Average SS disability payments
2 years or until age 65 group disability plans are offered through employer. lowest tier doesn’t come close to covering paycheck (only about 67%) and you can set time frame
unable to perform duties of customary occupation disability “own occupation”
unabilty to engage into gainful employment at all disability “any occupation”
doesn’t give people incentive to fake disability benefit amount of disability insurance doesn’t give 100% of income. why
allows you to buy more insurance in future without providing evidence of insurability guaranteed insurability option
once a person claims on disability benefits monthly benefits adjust annually to keep up with inflation. applies only once individual goes on claim COLA – cost of living adjustment
65 and over, collecting disability under Social Security Socials security provides health care coverage to persons ___ and those who are ___.
workers suffering injury or illness on the job Workers’ compensation is a state program that probvides benefits for
true you would have a better change to choose your own doctor with a PPO rather than an HMO
part of the premium for workers and dependents The majority of employers pay
PPO Ben’s health coverage charges a low ($15) copayment each time he visits the doctor or hospital. Other than the low per-service copayment, there is very little cost sharing. However, Ben must go to in-netowkr providers listed by the provider of the health coverage. If he goes to a provider that is not on the list, there is very little coverage. Which of the following types of entity most likely provides Abe’s health coverage?
long term care the insurance designed to help with nursing home or in-home custodial care due to chronic illness is called
true tens of millions of americans are not covered by health insurance
true all americans are required to have or buy health insurance beginning in 2014 or pay a penalty
false the ACA require employers to offer health insurance benefits to all full-time employees.
true Insurers are required to cover people with pre-existing medical conditions without limiting or setting unrealistically high insurance rates
substitute for loss income Disability income provides benefits that are designed to
false The average American worker is more likely to die prematurely than to be disabled before age 65.
if the policy contains an “own occupation” definition of disability, the insurer will provide only if Janet would not be able to perform another type of job such as teaching or consulting Suppose Janet, a skilled neuro-surgeon, became unable to perform surgery because of severe arthritis. Which of the following is not true?
false disability income benefits under social security will be paid as long as you cannot perform the duties of the job you were holding when the disability began
false accidents are the primary cause of disability
medicaid Which of the following programs is a joint Federal and State public assistance program that provides health insurance benefits to those who are unable to pay for healthcare?
decreasing the benefit level from 50% to 66% of prior earnings. Which of the following change would tend to increase the premium on a disability policy:
Gender Starting in 2014, the affordable care act requires insurance companies to set premiums based on all the following except

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