Ch. 27 Health Insurance Basics

Medicare eligibility

• Individuals who are 65 years of age or older

• Blind individuals

• Permanently disabled patients (for 2 years)

• Patients diagnosed with end-stage renal disease requiring dialysis or kidney transplant

Medicare plan

• Part A covers inpatient hospital care, skilled nursing facilities, home healthcare, and hospice services.

• Part B covers outpatient hospital care, durable medical equipment, physicians’ services, and other medical services.

• Part C covers expanded inpatient and outpatient hospital care benefits.

• Part D covers prescription drugs.

Medicaid eligibility

• Individuals whose income is significantly reduced because of medical expenses

• Recipients of Aid to Families with Dependent Children (AFDC)

• Individuals who receive Supplemental Security Income (SSI)

• Individuals who are Qualified Medicare Beneficiaries (QMBs)

• Individuals in hospital-like settings for long-term care and intermediate-care facilities

Children’s health insurance program (CHIP)

• Children whose family income is above Medicaid’s qualifying income limits are eligible for CHIP

• It is a state-funded program and includes routine health checkups, immunizations, doctor visits, prescriptions, inpatient and outpatient hospital care, emergency services, and laboratory tests.

Tricare

• retirees from the armed forces and their families (dependent children and spouses).

• individuals in all seven uniform services (Army, Navy, Marine Corps, Air Force, Coast Guard, Public Health Service, and the National Oceanic and Atmospheric Administration).

Employee sponsored group policies

The employer offsets the cost of the premium by paying a portion of or even the entire premium. In this manner, it is more affordable for employees to obtain coverage for themselves and their families using this plan.

Individual health insurance plans

• These plans are cheaper than the group plans, but have a limited coverage for selected services only.

• The federal government plans to allow individuals or families (who have purchased individual health care plans) to claim tax credit or a larger tax deduction, but this is something that may always evolve or change.

Affordable Care Act

enables the quality, availability, and affordability of private and public health insurance companies.

Fee for Service

provide payment or reimbursement either directly to the physician or to the patient for medical services that have been provided.

Fee schedule

This states that the insurance carrier will pay a specified percentage of the total amount. Any additional charges will be paid by the patient.

Service benefits

This defines covered services but not exact payments. The insurance carrier is expected to pay the specified percentage of amount that is usual, customary, and reasonable (UCR) for the procedure.

Usual fees

amounts regularly charged by the physician.

Customary fees

amounts charged by physicians in the same specialty and practice in the same geographic area.

Reasonable fees

meet the criteria for usual and customary fees, or refer to fees that are justifiable in special circumstances.

Managed care plans

those that negotiate reimbursement amounts to contracted physicians and facilities. The plan restricts patient care to specific providers, laboratories, and hospitals that have accepted the fee schedule of the insurance plan. The plan requires patients to get referrals from a PCP

Staff model health maintenance organization

Under this model, an HMO directly hires physicians as salaried employees. These physicians provide healthcare to members of the HMO, and the patient receives care only at specific facilities (mentioned in the plan). 

Network health maintenance organization

Here, an HMO contracts with other group practices for services. Under this system, a physician can also see patients with other types of insurance.

Preferred provider organization (PPO)

Under this model, coverage is provided for in-network and out-of-network services. In-network services come with financial incentives. 

Exclusive provider organization (EPO)

Under the EPO model, HMOs provide coverage only for in-network services. That means if a patient sees a provider who is considered “out of network,” coverage will not be reimbursed by the health insurance company.

Independent practice association (IPA)

Under this model, the physician forms an association. Association members are paid from funds collected from the subscribers.

Point of service plan

This model combines in-network plans (regulated as HMO) and out-of-network plans (regulated as PPO with insurance plans).