Chapters 11 12 Inpatient vs outpatient 1 Q Inpatient anyone that receives care and stays in the hospital for more than 1 night Outpatient visits the doctor receives care and then leaves Characteristics of major medical insurance 2 Q Broad Coverage High Maximum Lifetime limits Benefit Period typically year long Calendar Year Deductibles an aggregate deductible that has to be satisfied only once during the calendar year Family Deductible specifies that medical expenses for all family members are accumulated for purposes of satisfying the deductible Common Accident Deductible only one deductible has to be satisfied if two or more family members are injured in a common accident Percentage Participation Coinsurance a provision that requires the insured to pay a certain percentage of eligible medical expenses in excess of the deductible Stop loss limits 1 Q Stop Loss Limits The insurer will pay 100 of the eligible medical expenses once the insured incurs a certain amount of out of pocket expenses Purpose is to reduce the financial burden of catastrophic loss Exclusions dental eye hearing war cosmetic and experimental surgery Internal limits limits on the amount of home health care services Coinsurance 1 Q Probably going to be a Solved problem Percentage Participation Coinsurance a provision that requires the insured to pay a certain percentage of eligible medical expenses in excess of the deductible Usually 80 20 Purpose Reduce Premiums and Prevent Over utilization Stop Loss Limits The insurer will pay 100 of the eligible medical expenses once the insured incurs a certain amount of out of pocket expenses Ex Mary has losses totaling up to 100 000 She has a 500 deductible and a 2000 stop loss limit Her coinsurance is 80 20 How much will Mary pay 500 Deductible and 2000 Stop loss Limit instead of the 20 000 Coinsurance Long term care insurance 1 Q Long Term Care Insurance pays a daily or monthly benefit for medical or custodial care received in a nursing facility hospital or at home Facility Only Policy Nursing home assisted living facility hospice inside the institution Home Health Care Policy Covers care outside of an institution adult day care Respite care occasional full time care that allows another full time caregiver to take a needed break Comprehensive Policy Covers care at a nursing home assisted living facility and hospice and additional optional benefits for home health care and adult day care Benefits 1 Daily 50 to 300 per day 2 Reimbursement Policies reimburse the insured for actual charges up to a specified daily amount 3 Per Diem Policies pay a fixed amount regardless of the actual charges incurred Eligibility Unable to perform Daily Activities or Sever Cognitive impairment Definitions of disability 1 Q Own Occupation The job that you currently do i e surgeon does surgery Any Occupation The ability to do any occupation surgeon doing desk work or teaching Total Disability Inability to perform all duties of the insured s own occupation Inability to perform the duties of any occupation for which the insured is reasonably fitted by education training and experience Inability to perform the duties of any gainful occupation Income is reduced as a result of sickness or accident Partial Disability The inability of the insured to perform one or more important duties of his or her occupation Residual Disability a pro rata disability benefit is paid to an insured whose earned income is reduced because of an accident or sickness Group health insurance 2 Q Employee benefits Non monetary benefits which are in addition to a salary that an individual receives for working for a specific employer Examples of employee benefits include life insurance health insurance gym memberships Group health insurance is an employee benefit Insurance incidental to the group i e the group should not be formed for the purpose of obtaining insurance Purpose to reduce adverse selection there should be a flow of younger person into the group an a flow of older persons out of the Flow of persons through the group group Automatic determination of benefits of insurance amounts Benefits should be determined automatically by some formula that prevents individual selection Ex earnings length of service position ext Purpose is to reduce adverse selection If people could choose how much cheap insurance they get the poor risks would over insure Eligibility Requirements Full time employee Satisfy probationary period Apply for insurance during eligibility period Be actively at work when insurance becomes effective or commencement of employment Basic Medical Expense Insurance generic name for group plans that provide only basic benefits usually covers hospital expenses surgical expenses physician s visits and miscellaneous benefits X rays MRIs ext covers basic expenses and is designed to supplement the benefits provided by a basic plan Supplemental Major Medical Comprehensive Major Medical Insurance a combination of basic and supplemental medical coverages most widely used plan COBRA Consolidated Omnibus Budget Reconciliation Act of 1985 Allows for continuation of group health insurance following a qualifying event Insured keeps coverage for 18 months Child stays for as long as 3 years Eligible if terminated for any reasons other than gross misconduct divorce or legal separation death of the employee and attainment of a maximum age by dependent children Workers must pay 102 percent of the group insurance rate Managed care 4 Q Managed Care Plans Managed care plans Medical expense plans that provide covered services to members in a cost effective manner 2 Preferred provider organizations PPO 1 Health maintenance organizations HMO comprehensive services to its members for a fixed pre paid fee provide medical services to members at reduced fees 3 Point of service plans POS the network for medical care Organized system of health care that provides Plan that contracts with health care providers to Structured as an HMO but members are allowed to go outside of Major Medical PPO POS Provider Choice Unlimited Unlimited Unlimited Gatekeeper No No Yes in network Cost Sharing Deductible Coinsurance Deductible Coinsurance Deductible Coinsurance Copay in network HMO Restricted Yes Copay Medicare Medicaid 3 Q Medicare Part of social security program Covers medical expenses of most people 65 and older also pays medical expenses to people who have been entitled to disability benefits and are younger than the age of 65 also covers
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