15- Medical Expense Insurance Questions and Answers(A+ Solution guide)

Basic Medical Insurance Plans - Provides benefits up front without having to satisfy a deductible; 3 Sections Hospital Expense, Surgical Expense, Physicians (non-surgical) expense; has lower benefit limits than majors; benefits provided by basic medical expense insurance are lower than the actual expense incurred; a fee charged by a physician or other health professional is called usual customary, and reasonable expense Major Medical Insurance Plans - Coverage is provided by both inpatient and outpatient hospitals; usually carry deductibles, coinsurance requirements, and have large benefit maximums; benefits for prolong injury or illness Deductibles - stated initial dollar amount that the individual insured is required to pay before insurance benefits are paid. Deductibles are used primarily to help control the cost of premiums. There are three kinds of deductibles: flat, corridor, or integrated. Flat Deductible - A stated dollar amount that applies to a covered loss (e.g. $500). This deductible is applied per occurrence, per insured individual Corridor Deductible - When a major medical policy is supplementing basic coverage (that contains no deductible), the deductible is not applied until the basic coverage has been exhausted Intergrated Deductible - Used when a major medical plan is supplementing basic coverages. Example- If the major medical has a $500 deductible and the insured has basic coverage of $500 or more, then, in the event of a claim, the amount paid by the basic coverage satisfies the major medical deductible. However, if the basic does not cover the entire deductible amount of the major medical plan, the insured is required to make up the difference Coinsurance - It is a sharing of expenses by the insured and the insurer. After the insured satisfies the deductible, the insurance company pays a high percentage of the additional expenses (usually 75% or 80%) and the insured pays the remainder. Stop-Loss - feature designed to limit the amount of expense the insured may be exposed to in a policy year