Personal Finance and Business: Chapter 14

Cash Value

Accumulated savings that is kept for you by the insurance company--if you choose to cancel your policy you will get this amount back--some companies allow you to take a cash against the cash value of your whole life policy.

PSO (Point of Service Plan

Combines features of HMOs and PPOs--uses a network of participating physicians who have contracted to provide certain services for certain fees--lide with a traditional HMO you choose a primary care physician who can refer you to specialist physicians as needed--like with a PPO you can choose to use a doctor out of the network but it costs more.

Medicare

Federally funded health insurance program available mainnly to people over 65 and to people with certain disabilities.

Copayment

Flat fee you pay every time you receive a covered service (doctor, visit, prescription, etc.).

Health Insurance

Form of protection that eases the financial burden people may experience as a result of injury or illness.

PPO (Preferred Provider Organization)

Group of doctors and hospitals that agree to provide specified medical services to members at prearranged fees--offered either directly or indirectly to members through an insurance company--premiums for these are higher than HMOs--offer more eligibility to members--you can go to the health care provider of your choice--you pay more to go with a doctor not on a preapproved list.

HMO (Health Maintenance Organization)

Health insurance plan that directly employs or contracts with selected, or preapproved, physicians and other medical professionals to provide health care services in exhanged for a fixed, prepaid monthly premium--based on the idea that preventative services will prevent future medical problems--thus they typically cover routine immunizations, check-ups, screening, and diagnostic tests.

Health Insurance Coverage

Hospital expenses, surgical expenses, physician expenses.

Blue Shield

Insurance company that provides benefits for surgical and medical services performed by physicians.

Blue Cross

Insurance company that provides hospital care benefits.

Coinsurance

Percentage of medical expenses the policyholder must pay in addition to the deductible (10%, 20%, or 30%).

Whole Life Insurance

Permanent policy for which you pay a specified premium each year for the rest of your life--pays a benefit of a stated amount when you die.

Beneficiary

Person named to receive benefits from an insurance policy.

Manage Care

Prepaid health plans that provide comprehensive health care to their members--designed to control the costs of health care services by controlling how they are used--HMOs, PPOs, and POS are types of managed care plans.

Term Insurance

Provides protection against loss of life for only a specified term (time period)--only pays a benefit if you die during the time period covered--which may be 10, 20 years or until a certain age.

Disability Income Insurance

Provides regular cash income when an employee is unable to work due to pregnancy, a non work related accident, or illness.

Stop-loss Provisions

Requires policyholder to pay all costs up to a certain amount, after which insurance pays 100% of the expenses (typically $3000 to $5000 total out of pocket for policyholder).

Medicaid

State administered medical assistance program offered to certain low income individuals--funding for Medicaid come from a combination of state and federal funds--unlike Medicare, its coverage is comprehensive so people do not need to buy supplemental (extra) medical coverage.