Unit_9_Health_Insurance_Students_Notes - UNIVERSITY OF...

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UNIVERSITY OF TECHNOLOGY, JAMAICA FACULTY OF BUSINESS AND MANAGEMENT SCHOOL OF BUSINESS ADMINISTRATION INSURANCE UNIT 10-HEALTH INSURANCE OBJECTIVES Explain the basic characteristics of individual major medical insurance Identify the basic characteristics of health savings accounts (HAS) Describe the key characteristics of long term care insurance Describe the major characteristics of disability-income insurance contracts Describe the guidelines to follow when purchasing individual health insurance Explain the underwriting principles followed in group insurance Describe the basic characteristics of group term life insurance Explain the major characteristics of three types of group medical expense plans Describe the basic characteristics of three types of managed care plans Show how group short-term disability-income plans differ from group long-term disability plans Describe the major characteristics of cafeteria plans Individual Health Insurance Coverages Individual medical expense plans are purchased by: People who are not employed Retired workers College students Common forms of individual coverage include: Hospital-surgical insurance Major medical insurance Health savings accounts Long-term care insurance Disability-income insurance
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Hospital-surgical insurance plans cover routine medical expenses Not designed to cover catastrophic losses Maximum benefits per illness and lifetime aggregate limits are low Most policies cover: Hospital inpatient expenses Miscellaneous hospital expenses, e.g., x-rays Surgical expenses, covered two ways: A scheduled approach , with a maximum per procedure On the basis of reasonable and customary charges Outpatient services, e.g., emergency treatment Physicians’ visits for nonsurgical treatment These plans are not widely used Major medical insurance is designed to pay a high proportion of the covered expenses of a catastrophic illness or injury Plans are characterized by: Broad coverage of reasonable medical expenses High maximum limits A benefit period , or length of time for which benefits are paid after a deductible is satisfied A deductible (typically calendar year) A calendar-year deductible is an aggregate deductible that has to be satisfied only once during the calendar year A family deductible specifies that medical expenses for all family members are accumulated to satisfy the deductible Under a common-accident provision , only one deductible has to be satisfied if two or more family members are injured in a common accident A coinsurance provision requires the insured to pay a certain percentage (typically 20-25 %) of eligible medical expenses in excess of the deductible Purpose is to reduce premiums and prevent overutilization of policy benefits The insured’s total out-of-pocket spending is limited by a stop-loss limit , after which the insurer pays 100% of eligible expenses Common exclusions include cosmetic surgery and expenses covered by workers compensation Plans may have internal limits for some types of expenses
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This note was uploaded on 02/26/2012 for the course ECON 101 taught by Professor Adam during the Three '11 term at University of Technology, Sydney.

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Unit_9_Health_Insurance_Students_Notes - UNIVERSITY OF...

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