Individual Health Insurance Coverages (Unit 4 Exam)

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  1. The four major problems in health care
    • -rising health-care expenditures
    • -large number of uninsured in the population
    • -uneven quality of medical care
    • -considerable waste and inefficiency
  2. Major Medical insurance
    a plan that pays a high percentage of covered expenses incurred by an insured who has a catastrophic illness or injury
  3. A typical major medical policy sold today has the following characteristics:
    • -high lifetime limits
    • -broad range of benefits
    • -deductible
    • -coinsurance
    • -out-of-pocket limit
    • -exclusions
    • -internal limits
  4. Reasonable and Customary Charges
    surgeons and other physicians are commonly reimbursed by this; it varies by insurer
  5. Calendar-Year Deductible
    an aggregate deductible that has to be satisfied only once during the calendar year
  6. Common Accident Provision
    only one deductible has to be satisfied if two or more family members are injured in a common accident, such as an auto accident
  7. Coinsurance Provision
    requires the insured to pay a certain percentage of elible expenses in excess of the deductible
  8. Copayment
    a flat amount that the insured must pay for certain benefits, such as $25 for a visit to a primary care physician, or a $10 copaymeny fee for a generic drug
  9. Out-of-Pocket Limit
    100% of the covered medical expenses in excess of the deductible are paid after the insured incurs a certain annual amount of out-of-pocket expenses
  10. Internal Limits
    major medical policies have this on the amounts paid for certain services
  11. Preferred Providers
    physicians, hospitals, and other health-care providers who are part of a plan network and agree to provide medical services to plan members at discounted fees
  12. Health Savings Account (HSA)
    a tax-exempt or custodial account established exclusively for the purpose of paying qualified medical expenses of the account beneficiary who is covered under a high-deductible health insurance plan
  13. Long-Term Care Insurance
    pays a daily or monthly benefit for medical or custodial care received in a nursing facility, in a hospital, or at home
  14. Elimination Period
    a waiting period during which time benefits are not paid
  15. Activities of Daily Living (ADLs)
    eating, bathing, dressing, transferring from a bed to a chair, using the toilet, and maintaining continence
  16. Benefit Triggers
    determines whether the insured is chronically ill and eligible for benefits
  17. Disability-Income Insurance
    provides income payments when the insured is unable to work because of sickness or injury
  18. Total Disability
    the complete inability of the insured to perform each and every duty of his or her own occupation
  19. Partial Disability
    the inability of the insured to perform one or more important duties of his or her occupation
  20. Residual Disability
    a pro rated disability benefit is paid to an insured whose earned income is reduced because of an accident or sickness
  21. Waiver-of-Premium Provision
    if the insured is totally disabled for 90 days, future premiums will be waived as long as the insured remains disabled
  22. Optionally Renewable Policy
    the insurer has the right to terminate a policy on any anniversary datee, or in some cases, on a premium date
  23. Guaranteed Renewable
    the insurer guarantees to renew the policy to some stated age. However, the insurer has the right to increase premium rates for the underwriting class in which the insured is placed
  24. Noncancellable Policy
    This cannot be canceled. The insurer guarantees renewal of the policy to some stated age, and the premiums are guaranteed and cannot be increased during that period
  25. Preexisting-Conditions Clause
    a physical or mental condition for which the insured received treatment or that existed during some specified time period prior to the effective date of the policy
  26. Grace Period
    a 31-day period after the premium due date to pay an overdue premium
  27. Reinstatement Provision
    permits the insured to reinstate a lapsed policy
  28. Time Limit on Certain Defenses
    after the policy has been in force for two years, the insurer cannot void the policy or deny a claim on the basis of misstatements in the application, except for fradulent misstatements
  29. A limited Policy
    covers only certain diseases or accidents, pays limited benefits, or places serious restrictions on the right to receive the benefits
  30. Hospital Confinement Indemnity Policy
    one example of a limited policy. It pays a fixed daily or monthly cash benefit if you admitted to a hospital
  31. Specified (dread) Disease Policy
    another example of a limited policy. This policy covers only certain diseases listed in the policy, such as cancer, multiple sclerosis, or muscular dystrophy
  32. Accident-Only Policies
    a list of these policies is endless, but includes accident insurance offered by sponsors of credit cards, travel accident policies to cover you while on vacation, and airline accident policies sold over the counter or from vending machines in airports
  33. Nonrenewable for Stated Reasons Only
    • -the policyowner attains a certain age
    • -the policyowner is no longer employed
    • -the insurer decides to nonrenew all policies with the same form number as the policyowner's policy
  34. These rules should be followed when health insurance is purchased
    • -insure for the catastrophic loss
    • -consider group insurance first
    • -purchase a policy that has a preferred provider network
    • -don't ignore disability-income insurance
    • -avoid limited policies
    • -use deductibles and elimination periods to reduce premiums
  35. Individual health insurance policies generally can be classified into the follwing categories
    • -major medical insurance
    • -health savings accounts
    • -long-term care insurance
    • -disability-income insurance
  36. Renewal provisions include the following
    • -optionally renewable
    • -nonrenewable for stated reasons only
    • -guaranteed renewable
    • -noncancellable
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Individual Health Insurance Coverages (Unit 4 Exam)
Unit 4 Exam
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