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This chapter surveys the major categories of medical expense insurance available in California, from traditional indemnity-style hospital, surgical, and medical plans through the managed care models that dominate today's marketplace. You'll examine self-funded and consumer-driven health plans, optional coverages such as dental and vision, and the contract provisions and clauses that shape how a policy actually pays a claim. The chapter then turns to group health insurance — eligible groups, underwriting, coordination of benefits, and blanket coverage — before closing with the regulatory and legislative framework that governs the industry, including ERISA, COBRA, HIPAA, and the Patient Protection and Affordable Care Act.
| Term | Definition |
|---|---|
| Appeal | A formal request by an insured or provider asking an insurer to reconsider a denied claim or an adverse coverage decision |
| Blanket policy | A single policy that automatically covers every member of a defined group while they are participating in a specified activity, without naming each insured individually |
| Capitation | A payment method in which a provider is paid a fixed amount per enrolled member per period, regardless of how many services that member actually uses |
| Gatekeeper | A primary care physician responsible for coordinating an enrollee's care and authorizing referrals to specialists |
| Indemnity plan | A fee-for-service plan that reimburses the insured or provider for covered medical expenses without directing the insured to a specific network of providers |
| Nonrenewal | The insurer's decision to end coverage at the close of a policy term rather than continuing it into a new term |
| Out-of-pocket expenses | The portion of covered health care costs that the insured must pay personally, including deductibles, copayments, and coinsurance |
| Reimbursement | Repayment to the insured for covered medical expenses the insured has already paid |
| Stop-loss | A provision or separate contract that caps the amount of risk retained by an insured, an employer, or a self-funded plan, shifting losses above that cap to an insurer |
| Subscriber | The individual who enrolls in a health plan, such as an HMO, and under whose name the coverage is issued |
Terms to Know