Chapters 11 & 12Inpatient vs. outpatient (1 Q)Inpatient- anyone that receives care and stays in the hospital for more than 1 nightOutpatient- visits the doctor receives care and then leavesCharacteristics of major medical insurance (2 Q)Broad CoverageHigh Maximum Lifetime limitsBenefit Period- typically year longCalendar Year Deductibles- an aggregate deductible that has to be satisfied only once during the calendar yearFamily Deductible- specifies that medical expenses for all family members are accumulated for purposes of satisfying the deductibleCommon Accident Deductible- only one deductible has to be satisfied if two or more family members areinjured in a common accidentPercentage Participation Coinsurance- a provision that requires the insured to pay a certain percentage of eligible medical expenses in excess of the deductibleStop 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 lossExclusions: dental, eye, hearing, war, cosmetic and experimental surgery, Internal limits (limits on the amount of home health care servicesCoinsurance (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 80/20Purpose: Reduce Premiums and Prevent Over utilizationStop 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 breakComprehensive Policy- Covers care at a nursing home, assisted living facility, and hospice and additional optional benefits for home health care and adult day careBenefits: 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 incurredEligibility: Unable to perform Daily Activities or Sever Cognitive impairmentDefinitions 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 occupationInability to perform the duties of any occupation for which the insured is reasonably fitted by education, training, and experienceInability to perform the duties of any gainful occupationIncome is reduced as a result of sickness or accidentPartial Disability- The inability of the insured to perform one or more important duties of his or her occupationResidual 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 benefitInsurance incidental to the groupi.e. the group should not be formed for the purpose of obtaining insurancePurpose: to reduce adverse selectionFlow of persons through the groupthere should be a flow of younger person into the group an a flow of older persons out of the group.Automatic determination of benefitsBenefits should be determined automatically by some formula that prevents individual selection of insurance amounts. Ex: earnings, length of service, position, extPurpose is to reduce adverse selectionIf people could choose how much cheap insurance they get, the poor risks would over insureEligibility RequirementsFull time employeeSatisfy probationary periodApply for insurance during eligibility periodBe actively at work when insurance becomes effective (or commencement of employment)Basic Medical Expense Insurancegeneric name for group plans that provide only basic benefitsusually covers hospital expenses, surgical expenses, physician’s visits, and miscellaneousbenefits (X-rays, MRIs, ext)Supplemental Major Medical covers basic expenses and is designed to supplement the benefits provided by a basic planComprehensive Major Medical Insurancea 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 eventInsured keeps coverage for 18 monthsChild stays for as long as 3 yearsEligible 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 childrenWorkers must pay 102 percent of the group insurance rateManaged care (4 Q)Managed Care Plans- Medical expense plans that provide covered services to members in a cost-effective mannerManaged care plans:1. Health maintenance organizations (HMO) - Organized system of health care that provides comprehensive services to its members for a fixed, pre-paid fee.2. Preferred provider organizations (PPO) - Plan that contracts with health care providers to provide medical services to members at reduced fees3. Point-of-service plans (POS)- Structured as an HMO, but members are allowed to go outside of the network for medical care.Major Medical PPO POS HMOProvider Choice Unlimited Unlimited Unlimited RestrictedGatekeeper No No Yes (in network) YesCost-Sharing Deductible/ CoinsuranceDeductible/ CoinsuranceDeductible/ Coinsurance – Copay (in network)CopayMedicare/Medicaid (3 Q)MedicarePart of social security programCovers medical expenses of most people 65 and olderalso pays medical expenses to people who have
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