Medical Expense Insurance Exam Questions And Answers Already Graded A+

Medical Expense Insurance basic types - 1. hospital 2. surgical 3. medical -these types are often called *first-dollar coverage* b/c insured pays no deductible usually Basic Hospital Expense Coverage - Covers: -*hospital room and board*: (specific $ amt. per day up to max # of days) -*misc. hospital expenses* (lab and xray charges, etc): limit is either expressed as a multiple on the r&b or a flat amt. -*meds*: may have a limit -*use of OR and supplies*: may have a limit -no deductible Basic Medical Expense Coverage - -also called *Basic Physicians' Nonsurgical Expense Coverage* -usually doesn't cover office visits -no deductible -coverage usually limited to # of visits/day, limit per visit, or limit per hospital stay -can also cover emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses' expense -insured is often required to pay a fair amount of $ in addition to the benefits Basic Surgical Expense Coverage - Covers: -surgeons fees -anesthesiologist -and OR when not covered as a misc. medical item-no deductible -contract has a *surgical schedule* listing types of operations covered and their assigned $ amounts -special schedules may express the amt payable as a % of max benefit, list a specified amt, or assign a *relative value* that when multiplied by its conversion factor gives the benefit payable Relative Value Approach --each procedure assigned a # of points relative to the # of points assigned to max benefit -multiply that relative value by the *conversion factor* (total amt payable per point) Major Medical Policies --broad range of coverage under 1 policy -Coverage includes: 1. doctor's fees 2. nurses' fees 3. room and board 4. misc. hospital expenses 5. pregnancy expenses 6. nervous or mental disorders 7. substance addiction rehab 8. cosmetic surgery after an accident -usually has a blanket limit with inside limits for specific expenses -normally a lifetime benefit per person limit, and it may have a deductible for each accident, year, or person -usually carry deductible, coinsurance requirements, and large benefit maximums -most have a limit on amount of *out-of-pocket* costs the insured can incur per year (called the *stoploss limit*) Types of Policies: 1. *Supplemental Major Medical Policies*2. *Comprehensive Major Medical Policies* Deductible - -$ amt the insured may pay before insurer will pay benefits Supplementary Major Med Policies - -used to supplement coverage payable under basic medical expense policies -after base policies are exhausted, insured pays a *corridor deductible* before major med coverage will pay benefits -called a corridor deductible b/c it's applied between basic and major medical coverage Comprehensive Major Medical Policies - -combo of basic coverage and major med coverage sold as 1 policy -cover practically all medical expenses -most have a corridor deductible Service Organizations (Blue Plans) - -Blue Cross and Blue Shield organizations have a contractual agreement w/ physicians and hospitals -docs and hospitals are producers in the cooperative -Blue Plans are not-for-profit health care organizations -they are not insurance companies -originally they were separate where Blue Cross provided pmts to hospitals and Blue Shield covered physician charges -operated as local facilities in each state and managed by a governing board in each locality -they're considered *prepaid plans* b/c each subscriber pays a set fee to receive services -also considered a *service plan* b/c benefits are paid to hospitals and docs instead of to the insured -in group plans, both Blues and insurance companies use *experience rating* to determine rates to charge -Blue still use *community rating* in pricing products for smaller employers and individualsCommunity Rating - -involves pooling of the experience of all groups in all areas and then the setting of an avg rate that will be sufficient to support this experience -that rate then applies to all groups insured under a particular plan