Basic and major medical expense insurance

Correct answer: The actual cost of care, such as hospital bills, surgeons' fees, doctors' visits, tests and drugs

Medical expense insurance reimburses the expenses of care: hospital, surgical, physician, testing and drug costs. That focus on expenses is what separates it from disability income insurance, which replaces lost income.

Correct answer: First-dollar coverage with relatively low internal limits on each benefit

Basic plans usually pay from the first dollar, with little or no deductible and no coinsurance, but each coverage stops at its own low internal limit. That low ceiling is their main weakness.

Correct answer: By a daily dollar limit for a maximum number of days

Basic hospital expense pays room and board up to a daily dollar amount, for no more than a stated number of days. Miscellaneous hospital expenses are limited separately.

Correct answer: Laboratory work, X-rays and operating room charges during a hospital stay

Miscellaneous hospital expenses are the ancillary hospital charges, such as lab work, X-rays, drugs and the operating room, paid up to a set amount that is often stated as a multiple of the daily room rate.

Correct answer: $1,200

Under a relative value system, each procedure has a point value and the policy pays a set dollar amount per point. 150 points times $8 per point equals a $1,200 maximum.

Correct answer: Nonsurgical doctor visits in the hospital, office or home

Basic medical (physicians') expense covers nonsurgical physician visits, typically paying a fixed amount per visit up to a maximum number of visits.

Correct answer: $2,000

Marta pays the $1,000 deductible, then 20 percent of the remaining $5,000, which is $1,000. Her total is $2,000, below the $4,000 cap. The insurer pays $4,000.

Correct answer: Major medical, which offers broad, high-limit coverage in exchange for deductibles and coinsurance

Major medical was designed for catastrophic exposure: broad coverage with high limits. The client's willingness to absorb routine costs fits its deductible and coinsurance design, while basic plans' low ceilings are exactly what fails in a long illness.

Correct answer: The amount the insured pays each benefit period before the plan begins paying most covered charges

The deductible is the first layer of major medical cost sharing: the amount the insured pays alone each benefit period before the plan starts paying the covered charges it applies to. Some benefits, such as preventive care, can be paid before the deductible is met.

Correct answer: After the deductible, the insurer pays 80 percent and the insured pays 20 percent of covered charges

Coinsurance is the percentage split of covered charges after the deductible. The common arrangement is 80 percent insurer and 20 percent insured.

Correct answer: Stop-loss limit

The out-of-pocket maximum is also called the stop-loss limit because it stops the insured's share of covered costs at a set amount.

Correct answer: $4,000

Dev pays the $500 deductible, leaving $5,000. The insurer pays 80 percent of $5,000, which is $4,000; Dev pays $1,000 coinsurance. His total share, $1,500, is under the $3,000 cap.

Correct answer: $6,000

Uncapped, Lena would owe $2,000 plus 20 percent of $48,000 ($9,600), or $11,600. The $6,000 out-of-pocket maximum stops her share there, and the insurer pays the remaining $44,000.

Correct answer: Nothing, because the charge is less than the deductible

The insured pays covered charges alone until the deductible is met. A $900 charge against a $1,500 deductible is paid entirely by the insured, and $600 of the deductible remains for later claims in the same period.

Correct answer: Usual, customary and reasonable charges

Major medical typically pays usual, customary and reasonable (UCR) charges for covered services, instead of the fixed scheduled amounts used by basic plans.

Correct answer: The basic plan pays first, a corridor deductible applies, and major medical then pays remaining covered costs subject to coinsurance

Supplemental major medical sits on top of a basic plan. The basic plan pays first, the insured meets a corridor deductible, and major medical covers the rest subject to coinsurance.

Correct answer: Supplemental major medical

The corridor deductible is the amount the insured pays between the basic plan's benefits and the start of supplemental major medical benefits.

Correct answer: It combines basic and major medical into a single plan with one deductible, one coinsurance arrangement and one out-of-pocket maximum

Comprehensive major medical merges basic and major medical coverage into one plan with a single set of cost-sharing terms. It is the dominant design today.

Correct answer: Basic plans give first-dollar coverage with low limits, while major medical gives broad, high-limit coverage with cost sharing

The defining contrast: basic plans pay early with little cost sharing but cap out at low limits; major medical asks the insured to share costs but provides broad, high-limit protection.

Correct answer: Lifetime or annual dollar limits

In non-grandfathered plans, the ACA bars lifetime and annual dollar limits on essential health benefits. Deductibles and coinsurance are still allowed, and the out-of-pocket maximum is capped each year.

Correct answer: $9,000

Both limits apply: $300 per day (not the $350 charged) for no more than 30 days. $300 times 30 equals $9,000. The insured pays the rest.

Correct answer: $2,000

Miscellaneous hospital expense benefits are often stated as a multiple of the daily room rate. Ten times $200 equals a $2,000 maximum.

Correct answer: The out-of-pocket maximum

The out-of-pocket (stop-loss) maximum caps the insured's combined deductible and coinsurance. However large the covered bills grow, the insured's share stops there.

Correct answer: Percentage coinsurance after a deductible

Basic plans usually pay first-dollar benefits with no coinsurance. Percentage coinsurance after a deductible is the cost-sharing structure of major medical.

Correct answer: Payment of surgeons' fees strictly from a fixed surgical schedule

Major medical typically pays usual, customary and reasonable charges rather than fixed schedule amounts. Deductibles, coinsurance and an out-of-pocket maximum are all standard features.

Correct answer: $7,600

The basic plan pays $2,000, leaving $10,000. Sam pays the $500 corridor deductible, leaving $9,500. Major medical pays 80 percent of $9,500, which is $7,600; Sam pays $1,900 coinsurance.

Correct answer: $600

The benefit is capped at $60 per visit and 10 visits. $60 times 10 equals $600; the insured pays the rest.

Correct answer: $1,600

Major medical bases payment on usual, customary and reasonable charges. With the deductible met, the plan pays 80 percent of the $2,000 UCR amount, which is $1,600.

Correct answer: Basic plans pay from the first dollar but stop at low internal limits, which a long illness quickly exceeds

Basic plans pay early bills in full but cap each benefit with low internal limits, such as a daily room limit, a maximum number of days and a per-procedure schedule. A long hospitalization exhausts those limits, leaving the insured with the rest.

Correct answer: The procedure's assigned points are multiplied by the policy's dollar amount per point

A relative value system assigns each procedure a number of points; the policy's conversion factor, a set dollar amount per point, turns points into the maximum benefit.

Correct answer: $3,150

Rita pays the $750 deductible, leaving $8,000. Her coinsurance is 30 percent of $8,000, or $2,400. Her total is $3,150, below the $5,000 cap; the insurer pays $5,600.

Correct answer: Comprehensive major medical

Comprehensive major medical combines basic and major medical into one plan with a single set of cost-sharing terms, which avoids the layered structure of supplemental major medical.

Correct answer: Catastrophic medical costs from serious or prolonged illness or injury

Major medical was built for catastrophic exposure: broad coverage with high limits, accepting deductibles and coinsurance in exchange.

Correct answer: $200

Only $200 remains before the $3,000 cap. The insured pays that $200 of coinsurance, the cap is then reached, and the plan pays the remaining $4,800.

Correct answer: Basic surgical expense

Basic surgical expense pays surgeons' fees, usually from a surgical schedule that lists a maximum for each procedure.

Correct answer: It is capped each year

For non-grandfathered plans, the ACA caps the out-of-pocket maximum on in-network essential health benefits each year and bars lifetime and annual dollar limits on essential health benefits.

Correct answer: Deductible, then coinsurance, then 100 percent insurer payment after the out-of-pocket maximum

For covered charges subject to the deductible, major medical cost sharing runs in a set order: the insured pays the deductible alone, then covered charges are split by coinsurance, and once the insured's total hits the out-of-pocket maximum, the insurer pays 100 percent.

Correct answer: Basic medical expense coverage

Daily room limits, a maximum number of days, scheduled surgical benefits, and first-dollar payment with no deductible or coinsurance are the hallmarks of basic medical expense coverage.