Health - Health Insurance Basics (1.1)

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Health Insurance

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used to indemnify the ED against medical lossed due to accidents, sickness, or disability

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1/ Applicants physical condition
2. moral and morale hazard
3. Applicants Occupation

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Three important underwriting factors dealing with Health Insurance:

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Accidental injury

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an unforseen and unintended injury that resulted from an accident instead of sickness

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Accidental Means

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any action by the ED that causes the accident

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Accidental Bodily Injury

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requires the ED be injured in an unexpected & accidental occurrence

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1. Indemnity Plans
2. Managed Care Plans

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Two types if health insurance:

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Indemity Plan

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ER reimburses the ED for medical expenses regardless of who provided the services

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Reimbursement - Actual Charges

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ER will reimburse the ED for the actual cost of specified procedures or services, regardless of cost

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Reimbursement 0 Percentage of Actual Charges

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ER pays a percetnage of the actual charges for covered procedures regardless of the cost

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Indemnity

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ER pays a specified amount per day for a specified maximum number of days.

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1. Health Maintenance Organization (HMO)
2. Preferred Provider Organization (PPO)
3. Point of Service (POS)

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Three types of "Managed Care Plans" :

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Health Maintenance Organization (HMO)

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provide medical treatment on a prepaid basis, members pay a fixed monthly amount regardless of how much medical care is provided in that given month
***members must receice their medical treatment from physicians within the HMO network

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Preferred Provider Organization (PPO)

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consists of physicians/hospitals that provide medical service only to a specific group
*** members pay for services as they are rendered
***sponsor usually reimburses the member for the cost of the treatment

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Point of Service Plan (POS)

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ED pays no deductibles and a minimal co-payment when a healthcare provider within the network is used.
*** if a physician is chosen outside the network the ED is subject to the deductible

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1. Medical & Dental Expense 2. Disability Income
3. Long term Care
4. Accidental Death & Dismemberment
5. Limited Insurance

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Basic Types of Health Insurance include:

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Medical Expense Insurance

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provides full or additional protection for medical expenses, such as:
physician services
hospital stay
diagnostic treatment
lab tests
surgical charges
prescriptions
physical therapy
dental care
nursing care

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Disability Income Insurance

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Pays the ED an income if they become disabled as the result of an accidental injury or sickness, and cant work

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Long Term Care Insurance

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pays for the care of individuals with chronic diseases or disabilities
**may include home health care, assisted living, nursing home care

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Accidental Death & Dismemberment

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provides a lump sum benefit in the evenrt of accidental death

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Limited Insurance Policy

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provide special types of coverage that are usually limited in nature

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Blanket Insurance

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groups such as students, scouts, and sports teams who may be exposed to the same risks can be covered under this policy

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Mandatory Second Option

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makes it mandatory that a second opinion in required before receiving a surgical treatment

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Pre-certification review

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ER may require the ED get er's consent prior to hospitalization in order to control hospital claims

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case management

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when an insurance company employee with a clinical background reviews treatment plans with the ED and often recomments alternative medical treatmetn to the ED

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1. cancellable
2. optionally renewable
3. conditionally renewable
4. guaranteed renewable
5. noncancellable

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Policy Provisions that control renewablilty include:

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calendar year deductible

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ER must pay the deductible annually before teh insurance benefits start paying
** referred to as "all cause"

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carryover provision

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allow an ED to carry over any medical expenses incurred in the last 3 months of the year to meeet the deductible of the next year

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per-cause deductible

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Ed is required to pay the deductible first on each accident or sickness before the ER pays any of the medical benefits

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corridor deductible

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benefits are paid and exhausted by the Basic Plan first and then this deductible is paid before the supplementary major medical benefits begins

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Integrated Deductible

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incorporates the deductible with the Basic Plan

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stop-loss feature

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protects the ED from catastrophic losses incurred from expensive medical bills

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1. Death is easy to determine
2. Only one claim per ED is filed with life insurance

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Why is life insurance different than health insurance?

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1. Traditional commercial Insurers
2. Service Providers
3. Federal & State Governors

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Health Insurance industry is composed of 3 different types of providers:

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Traditional commercial insurance

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purpose is to indemnify teh ED for losses sustained from an injury or from sickness
**ED has the option to choose their healthcare provider as long as the treatment meets the terms of their policy

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Service Providers

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offer both individual and group coverage
**Example - BCBS, HMO and PPO's

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1. Blue cross - hospital care
2. Blue shield - physician care

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BCBS

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Gatekeeper

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HMO requires their members to choose primary care physician who must authorize all health care provided for the member

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1. Max Freedom
2. Minimal co-pay
3. no deductible
4. no gatekeeper
5. limited out of pocket cost

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Advantages of POS's

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1. Self insurance
2. multiple employer trusts (METS)
3. Multiple Employer Wlefare Arrangements (MEWA)

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3 nontraditional methods of providing health insurance:

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Recoprocal Company

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based on the model of give and take
***members agree to share insurance responsibilities among all members

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Flexible Spending Account (FSA)

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IRS approved
tax exempt
**designed to save the ED money on eligible medical expenses
**money is deducted (pretax) from the ED gross pay each period and deposited into this account