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This chapter explained key concepts and major types of medical plans, including cost containment measures and federal regulations. Let's recap them.
Medical Plans Concepts
Topic
Key Points
Medical Plan Characteristics
Prepaid plans — payments are made continuously, regardless of services provided. Specified coverages — limit services to one illness or group of coverage. Comprehensive care — provides coverage for most types of medical expenses. Benefit schedule — lists exact coverages under a plan and the associated costs.
Types of Providers and Benefits
Type
Key Points
Major Medical Insurance (Indemnity Plans)
High maximum limits. Blanket coverage. Deductibles paid up front. Cost shared after meeting deductible.
Health Care Services Organization (HMOs)
Preventive care. Prepaid basis. Limited to service area. Basic benefit services — hospital inpatient, physician, outpatient medical, preventive, urgent care, emergency, diagnostic laboratory, out-of-area coverage. Optional benefits — long-term care, nursing services, home health care, prescription drugs, dental/vision care, mental health care, substance abuse services.
Preferred Provider Organizations (PPOs)
Physicians are paid on a fee-for-service basis. No PCP referrals required. Members can use any physician they choose, but are encouraged to use approved physicians who have previously agreed-upon fees.
Point-of-Service Plans (POS)
Combination of HMO and PPO plans. Employees are not locked into one plan and can choose depending on the need for medical services. Non-member physicians are paid on a fee-for-service basis, and the patient pays higher coinsurance.
Consumer Driven Health Plans
Medical Savings Account (MSA) — employer-funded account linked to a high-deductible medical plan. Flexible Spending Account (FSA) — benefits funded by employee contributions (salary reduction). Health Reimbursement Account (HRA) — reimbursement by employer for qualified medical expenses. High-Deductible Health Plan (HDHP) — high deductible, low premiums. Health Savings Account (HSA) — employee- and employer-funded account linked to a high-deductible medical plan.
Group Insurance
Topic
Key Points
Types of Eligible Groups
Employer sponsored. Association. Creditor groups. Self-funded. Small employer — fewer than 100 employees.
Provisions
Conversion to individual coverage — within 31 days without evidence of insurability. Coordination of benefits. Change of insurers — carryover of coinsurance and deductibles. Contributory — employees and employer pay part of premium (75% of eligible employees must participate). Noncontributory — employer pays entire premium (100% of eligible employees must participate).
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Qualifying event: voluntary termination of employment; termination of employment for reasons other than gross misconduct (e.g., company downsizing); employment status change from full time to part time. Length of coverage: 18 months after a qualifying event; 36 months for dependents after events such as death of an employee, divorce, or legal separation.
Affordable Care Act (ACA)
Topic
Key Points
Features and Coverages
Mandates preventive, educational, and community-based health care. Premium rates may be based on geographic rating area, family composition, age, and tobacco use. Children are covered until age 26. Coverage for pre-existing conditions. Enrollment period: November 1 to January 15. Metal levels/plan covers: Bronze 60%, Silver 70%, Gold 80%, Platinum 90%.
Essential Benefits
Ambulatory patient services. Emergency services. Hospitalization. Pregnancy, maternity, and newborn care. Mental health and substance use. Prescription drugs. Rehabilitative and habilitative services and devices. Laboratory services. Preventive and wellness services and chronic disease management. Pediatric services, including oral and vision care.