Application
This document is a signed statement of facts that an insurer uses to determine
whether to issue coverage. The application includes your name, age, address, and
may include questions about your medical history. It becomes part of your health
insurance contract.
Assignment
An assignment is a document signed by a policyholder authorizing a company to
pay benefits directly to a hospital, doctor or other health care provider.
Coinsurance
This is the cost that a policyholder must pay out-of-pocket. Coinsurance usually
involves a percentage of what a procedure costs. Many policies require the buyer
to pay 20 percent up to a certain dollar amount.
Conversion Policy
A conversion policy is an individual policy or certificate issued when a person
no longer qualifies as a certificate holder under group coverage or as a
dependent under a group certificate or individual policy.
Co-payment
This is a specified dollar amount a subscriber must pay for covered health care
services. The subscriber pays this amount to the provider at the time of
service.
Cost Shifting
This practice, used by hospitals, increases the cost of hospital services to
offset the cost of caring for nonpaying or indigent patients.
Customary Charge
This is the range of usual fees charged by doctors of the same specialty in a
given geographic area for a specific procedure.
Deductible
This is the amount you must pay out-of-pocket before an insurance company pays
its share. Usually, the higher the deductible, the lower the premium.
Effective Date
This is the date on which health insurance protection begins.
Elimination Period
This is the length of time a policyholder has to wait after a covered illness
begins before receiving benefits.
Exclusions
These are certain conditions (or life events) specified in a health policy for
which there is no coverage.
Free Look Period
This is a 10-day period after you receive a health policy which allows you time
to decide whether to keep it. This applies only to individual health policies.
Grace Period
This is a specified period in which a policyholder may submit an overdue payment
and still retain coverage.
Guaranteed-Issue Policy
This type of policy is one that an insurance company must issue to you under
certain circumstances, regardless of any health conditions you suffer from.
Insolvency
This is the inability of a company to meet financial obligations or debts.
Levels of Nursing Care
There are various degrees of nursing care. The three levels often referred to in
Medicare, Medicare supplement and other insurance policies include the
following:
Skilled Nursing Care –This level of care provides daily
(around-the-clock) nursing and rehabilitative care performed by or under the
supervision of a registered nurse or a doctor.
Intermediate Care –This level of care provides less than 24-hour daily
nursing and rehabilitative care performed by or under the supervision of skilled
medical personnel. Care must be supervised by a registered nurse or a doctor.
Custodial Care –This lower level of care does not require a nurse to
administer it. It may be provided in a nursing home or a private home, but must
be recommended by a doctor. This care includes help with activities of daily
living. A Medicare supplement policy provides limited nursing care coverage, as
it supplements Medicare payments for skilled nursing care, but not intermediate
or custodial care.
Medical-Cost Inflation
This is an increase in insurance premium due to a rise in the cost of medical
care. It measures the additional cost of medical services from one year to the
next. It does not consider the number of times doctors perform the procedure in
a year.
Medical Utilization
This is the frequency of a policyholder’s use of medical services in a given
year resulting in an insurance claim. This term also refers to the number of
times doctors perform a procedure in a year.
Medically Necessary
This is a medical procedure or treatment necessary to maintain or resume good
health. Many insurance policies will only pay for medically necessary
treatments.
Pre-Existing Condition
This is an illness, diagnosed or treated before buying a health insurance
policy, that existed during the six-month period immediately preceding the
policy’s effective date. A policy usually will not cover a pre-existing
condition until some time after the policyholder purchases the coverage.
Reasonable Charge
This is a fee that differs from usual or customary charges because of unusual
circumstances involving medical complications that require additional time,
skill and expertise.
Rider
This is an attachment to an insurance policy that specifies conditions or
benefits the policy covers in addition to the original contract benefits.
Small Business
This is a business that has one to 50 employees.
Stop-Loss Limit
This is a provision that limits the amount of coinsurance a policyholder must
pay.
Surgical Schedule
This is a list of cash allowances payable for various kinds of surgery. The
severity of an operation determines the maximum amount payable.
Usual Charge
This is the fee a doctor most frequently charges patients for a procedure.
Waiting Period
This is the time between the date a policy becomes effective and the date
benefit payments begin.