Insurance and Medical Expense Lecture Review

This set of vocabulary flashcards covers key concepts from California health and life insurance regulations, Medicare, Social Security, and general insurance principles based on the lecture transcript.

Deductible (Major Medical)

A commonly used cost containment measure for emergency hospital care under a major medical expense plan; also serves the same purpose in medical expense insurance as the elimination period does in disability income insurance.

Health Maintenance Organization (HMO)

A type of health care provider that provides both the health care services and health care coverage.

Long-Term Care ADLs

Activities of daily living used to determine chronically ill status, which include eating and dressing.

Medical Loss Ratio (MLR) Standard

A rule requiring insurers that spend too much on administrative costs to provide rebates to customers; issuers in the individual market must provide rebates if this ratio is less than $80\%$.

Medi-Cal

A program designed to provide medical assistance to people with low incomes and pay the cost of nursing home care for those who cannot afford it.

PPACA Adult Child Coverage

A provision established by the Patient Protection and Affordable Care Act allowing an adult child to be covered by a parent's health insurance plan until they are $26$ years old.

Residual Disability Income Insurance

Insurance where payments are based on the amount the insured's income is reduced by the disability.

Noncancelable Health Insurance Policy

A policy that the insurer cannot cancel except for nonpayment of premium.

Own Occupation Clause

A disability income insurance provision where an individual is considered totally disabled if they can no longer perform the tasks of the job held at the time of injury.

Health Insurance Counseling and Advocacy Program (HICAP)

A group of counselors who provide information about health-related issues to the elderly in California at no charge, but who are not qualified to give legal advice.

Usual, Customary, and Reasonable (UCR) Charges

Benefits designated based upon the charges for like services in the same geographical area rather than specific dollar benefit amounts.

Medicare Part B

A program that provides benefits for diagnostic tests and X-rays on an outpatient basis and pays $80\%$ of reasonable charges after the deductible is satisfied.

Fully Insured (Social Security)

A status achieved for social security purposes when a person has $40$ quarters of coverage.

Preferred Provider Organization (PPO)

A health plan where primary physicians do not serve as gatekeepers and which pays more for care received from a network provider than from a non-network provider.

Coordination of Benefits

A contract provision that addresses the problem of overinsurance when a claimant has coverage under more than one plan.

Medicare Supplement

A plan designed to cover the medical expenses that are not covered by Medicare.

Elimination Period

A time-based provision in a disability income policy that, when increased, can lower the policy premium.

COBRA (Consolidated Omnibus Budget Reconciliation Act)

A mandate for group health plans to cover groups of at least $20$ employees, allowing those who lose coverage to elect to continue it.

Gold Tier (PPACA)

An enrollment tier under the PPACA that represents an actuarial value of $80\%$.

Stop-loss

A health insurance provision that protects an insured from the expense of a catastrophic illness.

Third-Party Administrator (TPA)

An outside organization that processes claims for an employer's self-funded group plan.

ERISA (Employee Retirement Income Security Act of 1974)

A federal act that regulates group insurance in the areas of disclosure and reporting.

Home Health Care Benefit

Coverage for part-time nursing that follows a hospitalization and can be provided in a patient's home.

Deferred Annuity

A savings instrument designed to first accumulate funds and then systematically liquidate the funds.

Variable Annuity

An annuity where the value is determined by multiplying 'accumulation units' by the value of a 'separate account'.

Modified Endowment Contract

A life insurance policy written after $1988$ that fails to meet the seven-pay test.

Exclusion Ratio

The calculation used to determine the amount of an annuity distribution that is exempt from taxation.

Mortality Tables

Tools used to apply the theory of probability to life insurance.

Group Term Life Insurance Tax Exemption

Employer-provided group term life insurance is exempt from income taxation up to $50,000 .

Universal Life

A type of insurance coverage that features both a savings element and a flexible premium option.

Participating Policy

A life insurance policy that gives the owner the right to share in the insurer's surplus.

Joint Life Policy

A policy covering two or more individuals that pays the face amount only when the first person dies.

Underwriting

The process whereby insurers decide which customers to insure and what coverage to offer.

Mortgage Redemption

A type of insurance policy providing a death benefit that matches the projected outstanding debt on an individual's home.

Waiver of Premium Provision

A provision that allows a totally and permanently disabled insured's policy to continue in force without further premium payments.

Morbidity

The frequency and severity of certain illnesses and accidents.

Currently Insured (Social Security)

A status achieved when a worker is credited with a minimum of $6$ quarters of coverage during the last $13$-quarter period.

Health Benefit Exchange

Entities created by the PPACA through which individuals and small businesses can purchase health insurance coverage.

Indemnity

The principle that insureds are entitled to recover an amount not greater than the amount of their loss, intended to make the insured whole.

Materiality of Concealment

The rule used to determine the importance of a representation in an insurance contract.

Loss Exposure

Any situation that presents the possibility of a loss.

Implied Authority

An agent's authority to perform acts that are reasonably necessary to the duties expressly authorized.

Aleatory Contract

A contract where the insured and insurer do not contribute equally.

Moral Hazard

The increase in the chance of a loss occurring due to an insured's dishonest tendencies.

Speculative Risk

A situation in which there is a possibility of either loss or gain.