CH. 12 Health insurance providers

Where does the primary funding for Medicare Part A come from?

Federal payroll and self-employment taxes are the primary sources of financing for Medicare Part A Hospital Insurance.

Which of the following is NOT true of a preferred provider plan?

Hospitals can only initiate preferred provider plans

Medicaid will pay for nursing home expenses under what condition?

Must have a financial need Medicaid is a federal and state funded program for those whose income and resources are insufficient to meet the cost of necessary medical care.

After joining a health maintenance organization (HMO), a subscriber will typically select a

Primary care physician When joining an HMO, a member will usually be asked to select a primary care physician.

Employees generally receive workers compensation benefits for

lost wages and medical expenses due to occupational accidents

MEWA

Multiple Employer Welfare Arrangements (MEWA) A multiple employer welfare arrangement (MEWA) is a type of MET which consists of small employers who have joined to provide affordable health benefits for their employees, often on a self-insured basis. • They are tax-exempt entities • Employees covered by a MEWA are required by law to have an employment related common bond

What is the maximum Social Security Disability benefit amount an insured can receive?

100% of the insured's Primary Insurance Amount (PIA)

Commercial insurance

Coverage for businesses for protection against potential losses through unforeseen circumstances like theft, liability, property damage, and for coverage in the event of an interruption of business or injured employees.

Health Maintenance Organization (HMO) wellness programs may include each of the following EXCEPT

Diagnostic testing services

Disability income

Disability Insurance is the industry name for a plan that provides for periodic payments of benefits when a disabled insured is unable to work. The insurance product is designed to replace anywhere from 45 to 65% of your gross income on a tax-free basis should illness keep you from earning an income in your occupation. The main difference between Social Security Disability (SSDI) and Supplemental Security Income (SSI) is the fact that SSDI is available to workers who have accumulated a sufficient number of work credits, while SSI disability benefits are available to low-income individuals who have either never worked or who haven't earned enough work credits to qualify for SSDI

Medicare can be described as

a federal health insurance program for individuals over the age of 65 or permanently disabled

social security

any government system that provides monetary assistance to people with an inadequate or no income. Social Security's benefits include retirement income, disability income, Medicare and Medicaid, and death and survivorship benefits.

Social Security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for

40 quarters

At what age do most people become eligible for Medicare?

65

Multiple employer trusts

A Multiple Employer Trust (MET) is a group of ten or more employers who form a trust in order to minimize the tax implications of providing certain types of benefits for their employees, particularly life insuranc

Health Maintenance Organization (HMO)

A health maintenance organization, or HMO, is another type of organization offering comprehensive prepaid health care services to its subscribing members. HMOs are distinguished by the fact that they not only finance health care services for their subscribers on a prepayment basis, but they also organize and deliver the health services as well. • Subscribers pay a fixed periodic fee to the HMO (as opposed to paying for services only when needed) and are provided with a broad range of health services, from routine doctor visits to emergency and hospital care • When joining an HMO, a member will usually be asked to select a primary care physician • This care is rendered by physicians and hospitals who participate in the HMO • The payment given to a physician for each member of an HMO assigned to them is called capitation • When the HMO is represented by a group of physicians who are salaried employees and work out of the HMO's facility, this is known as a closed panel (sometimes called a staff model HMO) • For non-emergency situations in a closed network plan, a subscriber may be required to pay up to 100% of the billed amount if a health provider is chosen outside of the network • An HMO which is characterized by a network of physicians who work out of their own facilities and participate in the HMO on a part-time basis is known as an open panel. HMOs are known for stressing preventive care • Health maintenance organizations may be self-contained and self-funded based on dues or fees from their subscribers. They may also contract for excess insurance or administrative services provided by insurance companies. In fact, some HMOs are sponsored by insurance companies. • Hospital care under a typical HMO plan includes services such as hospitalization, in-hospital lab work and X-rays, inpatient laboratory services, and inpatient mental health care • HMO's often require subscribers to select a primary care physician, which is a doctor who provides all care for a particular member and controls all referrals for specialized care, and in some cases, hospital care. This is known is the gatekeeper system. • If a need for emergency health services arises for an enrollee of a health maintenance organization (HMO) using a gatekeeper system, the enrollee should proceed directly to the nearest emergency room • With HMO prescription drug plans, drugs are usually dispensed through participating pharmacies • An in-house pharmacy is typically available to enrollees in a staff model

MET(Multiple Employers trust)

A method of marketing group benefits to employers who have a small number of employees is the multiple employer trust (MET). They are usually in the same industry group. • METs can provide a single type of insurance (e.g., health insurance) or a wide range of coverages (e.g., life, medical expense, and disability income insurance) • An employer who wants to get coverage for employees from a MET must first become a member of the trust by subscribing to it • A MET may either provide benefits on a self-funded basis or fund benefits with a contract purchased from an insurance company • In the latter case, the trust (rather than the subscribing employers) is the master insurance contract holder • A MET is sometimes insured and administered by a third-party, which includes duties such as insuring the plan, underwriting, and claims administration • Participants are issued a joinder agreement (document which an individual is admitted as a member and bound to the terms of membership) The employer's premium payments are directed into a trust from which the plan's benefits and claims are paid. These trusts are also called 501(c)(9) trusts after the relevant section of the Internal Revenue Code. • Self-insured plans are common to multiple employer trusts (METs) or multiple employer welfare arrangements (MEWAs). They are also common in cases where the insured group is small, with relatively healthy members and few claims. • Self-funded plans commonly use the services of an insurance company to act as a third-party administrator of the plan. Insurers may provide such services without responsibility for claims payment under an Administrative Services Only (ASO) contract.

Preferred Provider Organization (PPO)

Another type of health insurance provider is the preferred provider organization, or PPO. A preferred provider organization is a collection of health care providers such as physicians, hospitals, and clinics who offer their services to certain groups at prearranged discount prices. In return, the group refers its members to the preferred providers for health care services. • Unlike HMOs, preferred provider organizations usually operate on a fee-for-service basis (where the cost of each service is scheduled), not on a prepaid basis • Members of the PPO select from among the preferred providers for needed services • In contrast to HMOs, PPO's provide a wider choice of physicians • PPO's have agreed to offer their services to the group where patient fees are discounted. In return, the group refers its members to the PPO and the providers broaden their patient base • Groups that contract with PPOs are often employers, insurance companies, or other health insurance benefit providers • While these groups do not mandate that individual members must use the PPO, a reduced benefit is typical if they do not • Preferred provider plans can include dental care

Blue Cross/Blue Shield

Blue Cross Blue Shield Association (BCBSA) is a federation of 36 separate United States health insurance organizations and companies, providing health insurance in the United States to more than 106 million people.

Blue Cross and Blue Shield

Blue Cross and Blue Shield are the dominant health insurers of the United States. The nation's Blue Cross and Blue Shield plans are loosely affiliated through the national Blue Cross and Blue Shield Association and most are considered non-profit organizations. The Blues provide the majority of their benefits on a service basis rather than on a reimbursement basis. This means that the insurer pays the provider directly for the medical treatment given to the subscriber, instead of reimbursing the insured. • As participating providers, the doctors and hospitals contractually agree to specific costs for the medical services provided to subscribers • Members of Blue Cross and Blue Shield are known as subscribers • Blue Cross and Blue Shield plans are called prepaid plans because the subscribers pay a set fee (usually each month) for medical services covered under the plan Prepaid health plans are contracts between an insurer and a subscriber (or group) where a specific set of benefits is provided in exchange for specific periodic premiums.

workers compensation

Business insurance coverage that helps employers pay for medical expenses in the event that an employee suffers from a work-related injury or illness. Most of the time, a Workers' Compensation policy also reimburses employees for the wages they lost while they couldn't work.

A characteristic of preferred provider organizations (PPO) is

If service is obtained outside the PPO, benefits are reduced and costs increase Members are not mandated to use the PPO. However, if they go outside the PPO for health care services, benefits are reduced and costs increase.

Skilled nursing facility expenses are sometimes covered by _____, but ONLY if the insured was hospitalized prior to entering the facility.

Medicare Medicare Part A covers care provided in a skilled nursing facility under certain conditions for a limited time. One of those conditions is having a qualifying hospital stay prior to entering the facility.

Social security disability income

Income Social Security provides services other than survivorship and retirement benefits. In addition to Medicare, the federal government also provides disability related benefits through the Social Security OASDI program. Let's review some of the important points here. • To be eligible for Social Security Disability benefits, you need to be fully insured, in which you need at least one quarter of coverage for each calendar year after turning 21 years old. The minimum number of credits needed is 6. • To be fully insured on a permanent basis, 40 quarter credits are required - at this point you are fully insured for Social Security Disability benefits whether you continue to work or not. • The maximum Social Security Disability benefit an insured may receive is equal to 100% of the insured's Primary Insurance Amount (PIA) • Disability income benefits are available to covered workers who qualify under Social Security requirements • One of the requirements is that the individual must be mentally or physically disabled to the point where substantial gainful work cannot be performed • The impairment must be expected to last at least 12 months or result in an earlier death • A five-month waiting period is required before an individual will qualify for benefits, during which time he/she must remain disabled • The worker's spouse and dependent children are entitled to an income benefit which is a percentage of the worker's primary insurance amount

Inpatient psychiatric care is covered under Part A Medicare Insurance for 190 days per

Lifetime

Inpatient psychiatric care is covered under Part A Medicare for 190 days per

Lifetime The lifetime maximum for inpatient psychiatric care under Part A Medicare is 190 days.

Medicaid

Medicaid Medicaid is Title XIX of the Social Security Act, added to the Social Security program in 1965. Its purpose is to provide matching federal funds to states for their medical public assistance plans to help needy persons, regardless of age. • Medicaid benefits are generally payable to low income individuals who are blind, disabled, or under 21 years of age • Medicaid is financed by both the federal and state governments (partially funded by the federal government and administered by individual states) • The benefits may be applied to Medicare deductibles and co-payment requirements

Individuals who participate in an HMO plan are called

Subscribers

TRI-care

TRI-CARE is a federal government accident and health plan which provides accident and health coverage to military families.

Medicare

The federally administered Medicare program took effect in 1966. Its purpose is to provide hospital and medical expense insurance protection to those aged 65 and older. It also provides insurance protection to any individual who suffers from chronic kidney disease or to those who have been receiving Social Security Disability benefits for at least 24 months. • Medicare Part A (Hospital Insurance) covers inpatient care in hospitals and skilled nursing facilities, and it covers care provided in a hospice and some care provided at home • Part A covers drugs administered as part of inpatient treatment • The Social Security Administration handles enrollment for the Medicare program and provides information about Medicare to the public • All parts of the Medicare program (except for public information and enrollment) are administered by The Centers for Medicare and Medicaid Services • The day the insured enters a hospital is the first day of a Medicare Part A benefit period • Skilled nursing facility expenses are sometimes covered by Medicare Part A, but ONLY if the insured was hospitalized shortly before entering the facility • Medicare Part A will cover a maximum of 100 days per benefit period in a skilled nursing facility (days 1-20 will pay 100%, days 21-100 will pay a flat dollar amount per day) • The lifetime maximum for inpatient psychiatric care under Part A Medicare is 190 days