Principal medical expense insurance
A plan that provides substantial benefits for the major portion of the expenses for needed health care services and generally constitutes the policyowner's or beneficiary's fundamental program of medical expense protection.
See also, major medical insurance, managed care, basic hospital and medical-surgical insurance, interim medical expense insurance.
Supplemental medical expense insurance
A policy intended to augment and possibly extend insurance protection to expenses uncovered under a principal policy.
See also: hospital confinement indemnity insurance; specified (dread) disease insurance; critical illness insurance; Medicare supplement insurance
Ancillary medical expense insurance
A policy that provides coverage and benefits for health care services that historically were considered incidental to medical care. Examples include dental, vision, hearing, and perscription drug services. Policies that offer this type of insurance are often called limited benefit policies.
Indemnity (fee-for-service) contract
In medical expense insurance, a policy under which an insured has considerable freedom in choosing providers of care. Claims are generally paid on the basis of charges billed by providers with few attempts to control costs.
Major medical insurance
A medical insurance policy designed to provide substantial coverage for most types of medical expenses arising from hospital, other facility, and physician's services, as well as diagnostic tests and therapies, regardless of setting. Benefit structure commonly uses deductibles, coinsurance payments, out-of-pocket limits, and aggregate and separate service maximums.
The intial amount of covered medical expenses that an individual must incur before he or she receives benefits under a medical expense plan.
A basis on which benefits are determined under a medical expense policy. Once a deductible is satisfied, the benefit payment is a percentage of the remaining allowable charge.
Reasonable and customary fee
The lesser of the actual charge, the fee most often charged by the provider for the same service or supply, or the fee most often charged in the same area by providers with similar training and experience for comparable service or supplies.
The percentage of covered expenses under a major medical plan that will be paid once the deductible is satisfied. The most common coinsurance percentage is 80%.
Also known as: percentage of allowable charges.
Compare percentage participation
The percent of covered medical expenses that remains unpaid after the coinsurance benefit payment of a medical expense policy and that must be paid by the insured.
Compare copayment; coinsurance.
A fixed-dollar amount that the insured must pay for a covered service. Also known as a copay.
Compare percentage participation.
The maximum sum of all payments by an insured for the amounts remaining after the coinsurance benefits for the allowable expenses of covered services in a yearly benefit period.
Also known as stop loss.
The overall amount of benefits payable under a policy for all covered services on behalf of each insured as long as the policy is in force.
Also known as lifetime maximum.
Separate service maximum
Benefit limit applicable to specified services, such as organ transplant, substance abuse and dependency, mental illness, home health care, infertility treatment, and skilled nursing care.
Also known as internal limit.
A plan's or pharmacy benefit manager's list of drug products that are preferred for dispensing to covered persons when appropriate. The list contains both generic and brand-name drugs.
Any condition, including illness or injury, not fully disclosed on the application that occurred within a specific time period prior to the policy's effective date, and either (1) for which symptoms existed that would cause a prudent person to seek diagnostic care or treatment, or (2) for which medical advice, treatment, or service was recommended by or received from a physician.
High-deductible major medical insurance
A major medical policy with a deductible of $1,000 or more. There are specified deductibles that are required when these policies are used as part of certain consumer-directed health plans, such as health savings accounts.
A payment mechanism in which payment to a health care provider is made per subscriber per month without regard to services rendered.
A program of coordinating health care services for a disproportionately high-cost patients with the goal of improving continuity, quality, and outcomes and lowering expenses through cost-effective resource utilization.
Also known as large or catastrophic case management
A continuous program of care conducted across a broad range of settings affecting the course of chronic illnesses (such as emphysema, asthma, diabetes, and heart disease) that incorporates the use of care guidelines by physicians and self-care education of patients. The goal of disease management is to eliminate or reduce the frequency and severity of critical episodes associated with a chronic illness, thereby reducing costs as well.
Centers of excellence
Health care facilities that provide highly specialized care, such as organ transplants, and are designated as the providers of choice for such care under a contract with a health benefit plan.
PPO - Preferred provider organization
A managed health care plan or the feature of a health benefit plan that makes available to insureds an identified network of participating providers or selected providers to obtain cost-effective medical services. The providers may or may not bear a financial risk for the utilization and cost of health services that is reflected in the payments they receive under the plan. PPO arrangements may be formal or informal.
3-tier copayment or deductible structure
A manged health care plan benefit feature that requires members to pay one of three out-of-pocket amounts for service, such as hospital services, or products, such a perscription drugs, depending on their cost to the health plan.
Refer to copayment; deductible.
Health maintenance organization (HMO)
A health plan of comprehensive medical benefits that emphasizes preventative services and the cost-effective use of medical care for an enrolled population living in a specific geographic area. An HMO is a "managed" health plan because of its contracts with a network of hospitals and physicians and other health professionals. These contracts require provider agreementsand payment arrangements that promote appropriate utilization and contain costs of the services rendered to enrollees. Generally, enrollees must receive services from network providers to obtain their benefits under the health plan. In addition, access to specialists, testing, and therapies frequently require a referral from a primary care physician.
Point-of-service (POS) option
A hybrid arrangement that combines aspects of a traditional medical expense plan with HMO coverage. At the time of medical treatment, a participant can elect whether to receive treatment for specified services within the plan's network or outside of the network. However, full benefits are paid only for services received within the network.
Also known as point-of-service (POS) plan.