Types of Health Policies

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Types of Health Policies by Mind Map: Types of Health Policies

1. 5. Point-Of-Service (POS) Plans

1.1. Purpose: (combo of HMO and PPO)

1.1.1. employees do not have to be locked into one plan - different choices for every health care need

1.1.2. Like an HMO:

1.1.2.1. may be required to choose PCP

1.1.2.2. No deductible for PCP services/ Preventative Care benefits usually included

1.1.3. Like a PPO:

1.1.3.1. Out-of-Network providers for higher cost

1.2. Provider Access:

1.2.1. 1. Access to provider network controlled by a PCP (Gatekeeper PPO)

1.2.1.1. insured does NOT have to select a PCP

1.2.1.2. if select PPO provider (any provider in network)= lower out of pocket cost to insured

1.2.1.3. Can visit any provider, even a specialist, without seeing a PCP 1st

1.2.1.3.1. certain services may require: plan pre-certification, evaluation of the medical necessity of inpatient admissions, number of days required to treat condition

1.2.2. PPO= All network providers= "preferred"

1.2.3. 2. Out-of-Network physician options at reduced coverage levels

1.2.3.1. "Open-Ended HMOs"

1.2.3.2. Indemnity Plan Features

1.2.3.2.1. Attending physicians= paid a fee for service

1.2.3.2.2. Member= higher copays, coinsurance, and deductibles

2. 4. Preferred Provider Organizations (PPOs)

2.1. A group of physicians and hospitals that CONTRACT with employers, insurers, or third party orgs to provide medical care services at a reduced fee

2.1.1. Approved Physicians/ Hospitals:

2.1.1.1. Anyone that meets/ follows PPO's standards and charges established PPO fees

2.1.1.2. can be added to approved list at any time

2.1.1.3. may belong to several PPO groups simultaneously

2.2. Differ from HMOs:

2.2.1. physicians are paid a FEE FOR SERVICE, versus prepaid basis

2.2.2. insureds can utilize any physician they choose

2.2.2.1. Benefits to encourage visits to approved physicians

2.2.2.1.1. PPO provide 90% of cost to approved and 70% of cost if not approved

2.2.3. Do not have to select a Primary Care Physician/ get referral to see specialists

2.2.4. Annual Deductible, Higher Premium

2.3. Similar to HMOs:

2.3.1. contractual agreements with providers who form a provider network

2.3.2. Copayments on non-preventative care

3. 3. Health Maintenance Organizations (HMO)

3.1. Health Maintenance Act of 1973

3.1.1. Employers with more than 25 employees will be forced to offer HMO as an alternative to regular health plans

3.1.1.1. Dual Choice section= expired/ not reenacted

3.1.1.2. Strong support of congress to grow HMOs

3.1.2. Main Goal of Act: Reduce cost of health care by utilizing Preventative Care

3.2. Preventative Care Services

3.2.1. Free Annual check-ups for entire family

3.2.1.1. to catch diseases eaarly

3.2.2. Free/ Low- Cost immunizations

3.2.2.1. to prevent certain diseasees

3.3. Characteristics:

3.3.1. provides both the financing AND patient care for its members

3.3.2. Limited Service Area

3.3.2.1. offers services to those living within specific geographic boundaries

3.3.2.1.1. EX: County lines/ city limits

3.3.3. Limited Choice of Providers

3.3.3.1. Physicians must meet HMO standards and provide care at pre-negotiated price

3.3.3.1.1. Primary Care Physician (PCP)

3.3.3.2. regularly compensated on Salary WHETHER CARE IS PROVIDED OR NOT

3.3.4. Copayments

3.3.4.1. Insured must pay specific part of the cost of care or a flat $ amount on non-preventative care

3.3.4.1.1. EX: member pays $10 or $25 for each office visit

3.3.5. Prepaid/ Capita-tea Basis

3.3.5.1. HMO receives a monthly flat $ amt attributed to each PCP

3.3.5.2. Members: receive all services necessary from member physicians / hospitals

3.3.6. Inpatient Hospital Services/ Emergency Care

3.3.6.1. Both are provided in or out of service area

3.3.6.1.1. Emergency Care Outside of Service Area= HMO will get member inside area ASAP

3.3.6.2. In Patient Services may limit treatment to:

3.3.6.2.1. Mental/Emotional/ Nervous Disorders

3.3.6.2.2. Alcohol / Drug Rehabilitation or treatment

4. 2. Major Medical Policies

4.1. Characteristics:

4.1.1. Offer a broad range of coverage under one policy (unlike basic medical expense)

4.1.1.1. Comprehensive Coverage for hospital expenses

4.1.1.2. Catastrophic Medical Expense protection

4.1.1.3. Benefits for prolonged injury or illness

4.1.2. Limits:

4.1.2.1. Blanket Limit for specific expenses, stated in policy

4.1.2.2. Lifetime benefit per-person limit

4.1.3. Usually carry deductibles, coinsurance requirements, and large benefit maximums (unlike basic medical)

4.2. A. Supplemental Major Medical Policies

4.2.1. Supplements the coverage payable under a basic medical expense policy

4.2.1.1. 1. Basic policy pays

4.2.1.1.1. coverage is on a first-dollar basis (no deductible)

4.2.1.2. 2. Insured pays Corridor Deductible

4.2.1.2.1. must pay before major medical coverage will pay benefits/ "corridor" because applied between

4.2.1.3. 3. Supplemental major medical provides coverage for:

4.2.1.3.1. Expenses not covered by basic policy

4.2.1.3.2. Expenses that exceed the maximum benefit of basic policy

4.2.1.3.3. Coverage needed after time limitation of basic policy

4.3. B. Comprehensive Major Medical Policies

5. Terminology and Key Concepts

5.1. Surgical Schedule

5.1.1. Lists the types of operations covered and their assigned $ amounts (Basic Surgical Coverage)

5.1.2. Special Schedules

5.1.2.1. may express amount payable as % of maximum benefit, list a specified amount, or assign a relative value multiplied by a conversion factor

5.2. Relative Value Approach

5.2.1. each surgical procedure is assigned a number of points relative to points assigned for maximum benefit & multiplied by the conversion factor to determine amount payable

5.2.1.1. Maximum benefit points: usually high and assigned to major surgical procedures

5.2.1.1.1. Open Heart Surgery= 1,000 points

5.2.1.2. Conversion Factor

5.2.1.2.1. represents the total amount payable per point

5.2.2. Example: if conversion factor is 10, and relative value is 200, policy would pay $2,000 for procedure

5.3. First Dollar Coverage

5.4. Limits

5.4.1. Blanket Limit

5.4.2. Lifetime per person Limit

5.5. Primary Differences between HMO, PPO, and POS Plans

5.5.1. Premium Cost & Flexibility (Lowest- Highest)

5.5.1.1. HMO: will not cover out of network care

5.5.1.1.1. Good for: people with tight budgets/ healthy

5.5.1.2. POS: One PCP who manages access to other doctors, can visit doctors out of network for higher costs

5.5.1.3. PPO: don't need a referral to seek additional care

5.5.1.3.1. Good for: if you need more health care and can afford higher premiums

5.5.1.4. Key Concept: Pay more for more provider choices

6. 6. Flexible Spending Accounts (FSAs)

6.1. Characteristics:

6.1.1. Form of "Cafeteria Plan Benefit"

6.1.2. Funded by salary reduction and employer contribution

6.1.2.1. pre-tax paycheck deposits

6.1.3. Benefits

6.1.3.1. "Use or Loose Rule"= no cumulative benefits beyond 1 year

6.1.3.2. Annual contribution maximum for Dependent Care Accounts

6.1.3.2.1. adjusted annually for cost of living by IRS

6.1.3.2.2. Family limit: if both parents have FSA, combined contributions can't exceed amt

6.1.3.3. Can be changed during Open Enrollment Period or mid year if Qualified Life Event

6.1.3.3.1. Qualified life event changes

6.1.4. Major Tax benefits (save 1/3 or more in taxes):

6.1.4.1. Exempt from Federal Income tax, Social Security (FICA) taxes, and usually State Income Tax

6.1.4.2. if highly compensated employee, not exempt from federal income tax

6.1.4.3. Allows for tax-free reimbursement on medical expenses

6.1.5. Open Enrollment Period

6.1.5.1. The time for employees to enroll/ re-enroll in a FSA

6.1.5.2. Only time employee can make changes to benefit elections, unless qualified life event

6.2. Types of FSA Accounts:

6.2.1. Health Care Account

6.2.1.1. Reimburses for: Out-of-pocket health care expenses of employee and eligible family members

6.2.2. Dependent Care Account

6.2.2.1. Reimburses for: Child and Dependent's care expenses so employee/ spouse can continue to work

6.2.2.2. Qualifying Dependents:

6.2.2.2.1. Child under 13 years old when care was provided and can be claimed as an exemption on employee's Fed Income Tax Return

6.2.2.2.2. Spouse who physically or mentally can't care for themselves

6.2.2.2.3. Dependent who can't take care of themselves and can be claimed as an exemption

7. 7. High Deductible Health Plans (HDHPs)

7.1. Features:

7.1.1. Higher Annual Deductibles/ out of pocket limits than traditional health plans

7.1.1.1. HDHP Deductible can be paid with funds from coordinating health plans

7.1.2. Lower monthly premiums than traditional health plans

7.1.3. Often used in coordination with:

7.1.3.1. Medical Savings Accounts (MSAs)

7.1.3.2. Health Reimbursement Accounts (HRAs)

7.1.3.3. Health Savings Accounts (HSAs)

7.1.3.3.1. as a fiduciary

7.1.3.3.2. HDHP contributes $ into HSA

7.1.3.3.3. can make additional voluntary contributions

7.1.4. Standard Health Coverage: In-net work preventative care, does NOT cover first-dollar expenses

7.1.4.1. except for preventative care, annual deductible must be met before plan will pay benefits

7.1.4.2. first dollar expenses: amount paid by insurer before deductible is met

7.1.4.2.1. Ex: $1,000 deductible. The first $1,000 worth of visits and medical bills you incur during a policy term is out of pocket. Anything above that amount is paid by insurer (subject to any copay)

7.1.5. Pre-determined Catastrophic Limits

7.1.5.1. once max limit is met, member does NOT incur additional out-of-pocket medical expenses for in-network care

7.1.5.1.1. includes doctor visit copays and prescriptions (unusual)

7.1.5.2. protects against catastrophic out-of-pocket expenses for covered services

8. 8. Health Savings Accounts (HSAs)

8.1. Purpose:

8.1.1. help individuals save for qualified health expenses incurred by insured, spouse, dependent(s) on a pretax basis

8.2. Allowable Contributions

8.2.1. Additional Voluntary Contributions by HDHP insureds

8.2.1.1. used to pay for out-of-pocket medical expenses/ or deductible of HDHP

8.2.1.2. Tax-deductible

8.2.1.3. Interest= tax free

8.2.2. Employer

8.2.2.1. Tax-deductible

8.2.3. Annual contribution limits

8.2.3.1. regardless of deductible

8.2.3.2. Singles: $3,550

8.3. Eligibility Requirements:

8.3.1. Covered by HDHP

8.3.2. Not covered by other health insurance

8.3.2.1. does NOT apply to specific injury insurance and accident, disability, dental care, vision care, long term care

8.3.3. Not eligible for Medicare

8.3.4. Not claimed as a Dependent on another tax return