Group Ins. Chpt 1

Front 1

fundamental principles of group insurance

Back 1

*pooling of risk. The risks covered are typically infrequent and potentially costly events. The policyholder pays a relatively small predetermined amount in the form of premium to the provider of the insurance coverage. In return, the provider of the coverage pays for the cost of the insured's covered event, or provides services directly, should the events occure. In this way, the participants in any particular insurance program share in the financial risk of the covered event.

*Insurable interest: the policy holder and beneficiaries of a program must experience loss or hardship if the covered event should occur, and therefore have a vested interest in mitigating the rissk. Insurable interest on behalf of the policyholder and beneficiaries is required for an insurance program to be financially and often legally, viable.

Front 2

difference between group insurance and individual insurance

Back 2

*the provider conders the entire group of eligible individuals as a whole in evaluating the risk, deciding whether ornot to insure the risk, and in setting the price for the risk. Group insurance allows for more efficient means of issuing coverage than individual insurance since greater numbers of insureds are added to the insurance pool at any one time. Hoever, the insurer still must protect itself against antiselection. There for will require certain standards be met by the group before offering the coverage. eg: 75% of the group participate in the insurance program. For employer sponsored plans, insurer may require employer pay for some minimun percentage of the employee's premium so that employees have great incentive to join.These requirements helps greater participation and to establish an appropriate level of risk.
*Group plan have more efficient means of marketing and delivering insurance programs. The primary level of marketing is to the plan sponsor, which
can be employer, associating or other entity. A secondary level is to eligible individuals, is typically accomplished in a common setting, either workplace or association news letter. Sales effort can be focused toward the sponsor decision makers. Marketing cost is lower on per participant base. Also administrative expenses are usually lower than individual insurance because individual premium billing is not required and plan sponsors often provide low cost access to particpants for communication information distribution.

Front 3

Healthcare system in Cananda

Back 3

Nearly all residents are covered by the provincially spnsored healthcare system known as Medicare, private group medical plans cover only those benefits not generally available under the public system. Therefore while group medical coverage is widespread in Canada, it is not as large a part of the total group insurance market as it is in the US.

Front 4

Buyers of group insurance products and services

Back 4

*single employers
*multiple employer trusts
*associations
*labor unions
*government employee groups
*government social insurance programs
*creditor groups
*discretionary groups

Front 5

Sellers of group insurance products

Back 5

*insurance companies
*healthcare service corporation
*HMO
*provider owned organizations
*self-insured employers

Front 6

Sellers of self insured goup insurance

Back 6

*insurance companies under ASO contracts
*third party administrators
*health service corporations

Front 7

Sellers of group insurance products

Back 7

*insurance companies
*healthcare service corporations
*HMOs
*provider owned organizations
* self-insured employers

Front 8

Employers choose self insurance because

Back 8

*self insured plans are not generally subject to state premium tax or state mandated benefit provisions
*self insured plan pays claims as they are submitted, the sponsor retains the use of the funds until they are paid and benefits from the investment return on those monies.

Self insured employer often contract with an insurance company or TPA to provide for administrative aspects of the plan.

Front 9

Part A coverage

Back 9

mandatory, provides for inpatient hospital, skilled nursing facility, and home health benefits. Providers must must accept the government's payment as payment in full.

Front 10

Part B coverage

Back 10

provides for outpatient hospital benefits, physician services, durable medical equipment, ambulance, and other non physician providers. Presciption drug benefits are minimal. Participation in Part B is voluntary, and eligible and interested beneficiaried are also subject to sume cost sharing provisions for part b services. Physicians are not required to accept the government's payment as payment in full, although many do, and there are limits to the amount they can charge in excess of the government's payment.

Front 11

Funding for Medicare is provided by:

Back 11

*payroll taxes
*general revenue
*benefitiary premiums

Front 12

Medicaid

Back 12

provides health coverage to the financially indigent in the US.

*It is very comprehensive, with many benefits covered at 100%.
*It is very broad, including dental, vision, and custodial nursing care, in addition to traditional health benefits.
*cost sharing levels for beneficiaries are very low.
*preimbursement to providers at deep discounted rates, which must be accepted as pymt in full.
*physicians are not required to participate in Medicaid, although hospitals frequently must participate.
*funded by state and federal revenues.
*states may pay providers on fee-for-service basis, or may go through prepaid programs like HMOs.

Front 13

Canadian Medicare

Back 13

*provincial government sponsor
*cover the majority of the population
*covers medical services, such as hospital services, inptient and outpatient physican services, as well as extended health care services, including long term residential care.
*benefits are on a service basis, meaning patients don't need to pay first and then submit a claim. federal standards for provincial programs discourage user fees. Although they are required to do so, a vast majority of physicians participate in Medicare.
*physicians compensated on a fee-for-service basis.
*funded by the provinces through payroll taxes, general revenue, and in some provinces, premiums.
*provincially sponsored Medicare plans that meet federal criteria for portability, universality,comprehensiveness, accessibility, and public non-profit management are eligible for a federal funds transfer to offset some costs of the provincial program.