Health Insurance Basics, Medical Plans, and Disability Income Flashcards

Comprehensive vocabulary flashcards covering health insurance perils, underwriting, medical and dental plans, disability income, Medicare, and policy provisions based on the lecture transcript.

Accidental Injury

An unexpected, unforeseen, and unintended event resulting in bodily injury or death.

Accidental Means Definition

A restrictive policy definition requiring both the cause and the result (event and injury) to be unexpected, unforeseen, and unintended.

Sickness

An illness or disease that first occurs, or manifests itself, after the policy is issued.

Insurable Interest

A requirement for a valid contract where the insured's sickness or injury would result in a financial or economic loss by the owner; must exist at the time of application.

Disability Income Insurance

Insurance that protects against the loss of income by paying weekly or monthly benefits if the insured cannot work due to accidental injury or sickness.

Long-Term Care (LTC) Expense

Insurance designed to provide personal care services for individuals with a chronic illness or disability who are unable to care for themselves for an extended period of time.

Principal Sum

The face amount or full value of an Accidental Death and Dismemberment (AD&D) policy, paid in the event of accidental death.

Capital Sum

A percentage of the face amount payable under an AD&D policy if the insured suffers an accidental dismemberment.

Hospital Income (Hospital Indemnity)

A policy that pays a predefined fixed amount per day an insured is hospitalized, regardless of the actual expenses incurred.

Formulary

A list of an insurance company's preferred or covered prescription drugs.

Errors and Omissions (E&O)

Liability insurance for insurance producers covering claims such as inadequacy (failing to provide proper coverage) and negligence.

Field Underwriting

The first step of the insurance process involving the producer's initial personal contact with the applicant and determination of insurability.

Medical Information Bureau (MIB, Inc.)

A member-owned, not-for-profit information exchange that collects adverse medical information to alert underwriters to fraud or misrepresentations.

Morbidity

The predicted number of medical claims in any given year for a specific group of insureds.

Net Premium Formula

$$\text{Morbidity} - \text{Interest} = \text{Net Premium}$$

Gross Premium Formula

$$\text{Morbidity} - \text{Interest} + \text{Expenses} = \text{Gross Premium}$$

Conditional Receipt

A receipt provided if the initial premium is paid at the time of application; coverage becomes effective on the date of application or the date of a required medical exam, whichever is later.

Probationary Period

A specified period of time (e.g., $15-30$ days) after the policy effective date before losses due to sickness are covered.

Pre-existing Condition

A prior medical condition for which the applicant has received, or should have received, medical care within a specified period (e.g., $6$ months) before the effective date.

Indemnity Plans

Traditional reimbursement plans where insureds pay for services and are later reimbursed by the insurer, typically using a fee-for-service structure.

Capitation Fee

A fixed monthly dollar amount paid by an $HMO$ to a healthcare provider per enrollee, regardless of the number of services provided.

Gatekeeper (Primary Care Physician)

An $HMO$ physician responsible for initial treatment, monitoring care, and providing necessary referrals to specialists.

Preferred Provider Organization (PPO)

A managed care plan where a network of providers offers services at a discounted fee-for-service rate negotiated in advance.

Utilization Management

A case-by-case assessment of health services consisting of prospective, concurrent, and retrospective reviews to determine medical necessity and quality.

Stop-Loss Limit

A maximum dollar limit established for coinsurance to limit the insured's out-of-pocket expenses in a policy year.

Corridor Deductible

A deductible required to be paid after basic plan benefits are exhausted and before a Supplemental Major Medical plan begins coverage.

Limiting Age Law

Federal law requiring every policy to extend dependent child coverage up to age $26$ ($through age 25$).

Endodontics

Dental treatment involving the root and nerve of the tooth, such as root canals.

Periodontics

Dental treatment focused on the gums, tissue, and bone that supports the teeth.

Prosthodontics

Dental treatment involving the replacement of missing teeth with artificial materials like bridges or dentures.

Metal Tier: Silver Plan

An Affordable Care Act index plan that covers $70\%$ of the benefit cost of the plan.

TRICARE

A government health program for active duty and retired members of the $U.S.$ military and their dependents.

Malingering

Falsifying or prolonging an injury to escape work, which disability benefits aim to prevent by not replacing $100\%$ of income.

Elimination Period

The time after a disability begins but before benefits become payable, also known as a 'time deductible'.

Own Occupation Definition

A disability definition requiring that the insured cannot perform the main duties of their regular occupation; the least restrictive definition.

Presumptive Disability

A condition of total and permanent disability resulting from the loss of two limbs, total loss of sight, speech, or hearing.

Business Overhead Expense (BOE)

Insurance that covers the overhead expenses of a business (rent, utilities) when the owner becomes disabled, but does not collect for owner's income.

Medicare Part A

Federal hospital insurance providing coverage for inpatient hospitalization, skilled nursing, home health, and hospice care.

Medicare Part B

Voluntary supplemental medical insurance covering physician services, outpatient costs, and preventive care.

Medicare Part D

Voluntary prescription drug coverage offered by private insurance providers approved by Medicare.

Activities of Daily Living (ADLs)

Measurement of functional impairment including bathing, continence, dressing, eating, toileting, and transferring.

Standardized Plan A (Medigap)

The basic Medicare Supplement core benefit plan providing coverage for Part $A$ coinsurance and an additional $365$ days of hospitalization.

Time Limit on Certain Defenses

A mandatory provision stating that after $2$ years misstatements (except fraud) cannot be used to void a policy or deny a claim.

Notice of Claim

A mandatory provision requiring the insured to notify the insurer of a loss within $20$ days or as soon as reasonably possible.

COBRA

A federal law requiring employers with $20$ or more employees to offer continuation of group health insurance for up to $18$ months after a qualifying event.

Health Savings Account (HSA)

A tax-advantaged account for individuals with High Deductible Health Plans ($HDHPs$) used to pay for qualified medical expenses.

Flexible Spending Account (FSA)

An employer-established account where employees make pre-tax contributions for medical expenses, usually following a 'use it or lose it' rule.