1. Medical Insurance
Chapter 15

2. Health Insurance Policies
Objectives:
Define and spell the terms to learn for this chapter
Define the medical assistant’s role in insurance claim processing
Describe the role health insurance has developed throughout history and in to the future
Define health insurance policy provisions and terminology
Describe the types of insurance plans
Describe the types of service coverage

3. Health Insurance policies
The purpose of medical offices is to provide needed health care services to patients
Medical offices must operate like a business
Bill insurance companies and patients to receive payment for the services
Must receive accurate, timely payments to:
Hire staff
Pay bills
Continue serving patients

4. Health Insurance Policies
Provides protection against, or compensation for, specific types of risk, loss, or ruin
Contract in which insurance company agrees to pay a sum of money to insured in event of defined contingency, such as death, accident, or illness, in return for payment of a premium by the insured

5. Health Insurance Policies
Health insurance not designed to cover all costs associated with health care but rather to assist patient with expenses incurred for medical treatment

6. The History and purpose of health Insurance
Began in mid-1800s as disability income insurance
First group policy giving comprehensive benefits offered by Massachusetts Health Insurance of Boston in 1847
Insurance companies issued first individual disability and illness policies around 1890
Disability insurance was used to replace the income of people injured in accidents or ill from certain diseases

7. The History and purpose of health Insurance
Hospital insurance coverage began in 1929; became known as Blue Cross Plan
Employee benefit plans popular in 1940s and s
Unions that represented large groups of workers bargained for better benefit packages, including tax-free, employer-sponsored health insurance
Texas school teachers formed a contract with a local hospital to guarantee up to 21 days if hospital care for a premium of $6/year. Became popular and became Blue Cross Plan

8. The History and purpose of health Insurance
During 1950s and 1960s, government programs began to cover health care costs
In 1965, federal government enacted two programs for health care reimbursement:
Medicare, designed for the elderly
Medicaid, targeted to low income families
These two programs marked a substantial infusion of funding to the health care system, which became the driving force behind thee expansion of health care services

9. The History and purpose of health Insurance
HMO Act of 1973: allowed use of federal funds and policy to promote health maintenance organizations (HMOs), which provide managed care to participants
Managed care intended to reduce inefficiencies in medical care and provide better care at a lower cost
The 1970s and 1980s saw a rapid rise in the cost of health care as a result of advancing technology and funding from Medicare and Medicaid

10. The History and purpose of health Insurance
1980s: Diagnosis Related Groups (DRG) implemented by Medicare to help control spending
Mid-1990s: most Americans who had health insurance enrolled in managed care plans
Many insurance companies had adopted hospital payment programs based on DRGs

11. The History and purpose of health Insurance
1995: individuals and companies paid for about half the health care received in United States; government paying for other half through Medicare, Medicaid, other programs
About 60 percent of Americans have health insurance through employer-sponsored plan
Estimated 45 to 50 million Americans have no health insurance coverage
Other industrialized countries, in which the government finances health care and oversees the delivery system, Americans must find their own source of health insurance or apply for government program
About 60% of Americans have health insurance through employer-sponsored plan
Individuals do not have or do not qualify for employer-based coverage, do not qualify of federal programs and cannot afford individual policies
Sliding scale fee schedules based on financial ability
Some cities have free or low-cost clinics established run by volunteers of not-for profit agencies

12. Patient Protection and affordable care act (PPACA)
Referred to as the Affordable Care Act (ACA), Obamacare
Goal of PPACA to help decrease the number of uninsured Americans and reduce the overall costs of health care

13. Patient Protection and affordable care act (PPACA)
PPACA established the health insurance exchange (HIE) to create a more organized and competitive market for buying health insurance
Offer choice of health insurance plans
Certify plans that participate
Provide consumer information regarding options
Serve individuals buying insurance on their own and small businesses with up to 100 employees
Each state may establish its own HIE or may opt to allow federal government to establish and operate it for residents of that state

14. Patient Protection and affordable care act (PPACA)
As of 2014, requires most people to have health insurance and requires them to pay a tax penalty if they do not
Commonly known as the individual mandate, because it requires individuals, rather than organizations, to acquire the insurance
Expanded income criteria for who is eligible for Medicaid
PPACA should decrease number of uninsured people, improve health outcomes, streamline health care delivery, and increase overall expenditures on health care
Exact impact of PPACA unknown
If all states implement the expansion, an additional 21.3 million individuals could gain Medicaid coverage by 2022 (41% increase)
PPACA is expected to have a significant impact on health care delivery and health insurance I the years to come.

15. Role of MA in Health Insurance claims
Must be able to:
Help gather information from patients
Answer patients’ questions regarding how health insurance works, how amounts owed are determined
Verify patient’s insurance coverage and explain coverage
Prepare health insurance claims accurately, follow up on past-due claims and purse unpaid amounts
Depends on the type of practice: Large offices a separate department
smaller offices the MA may have more responsibilities

16. Policy Provisions and Terminology
Knowledge of insurance terminology is critical to helping patients use their health insurance policy
Health insurance, also called medical insurance
Contract between insurance carrier and person who owns insurance policy, known as member, subscriber, insured, or policyholder
Multiple terms that seem similar

17. Policy Provisions and Terminology
Members
Receive insurance through their employers, the member is the employee
Those who buy individual policies, the members is the person who purchased the plan
Covered by government policies, the term beneficiary is often used and refers to the individual who qualifies for the program
VOB (verification of benefits) the process to determine the patient’s eligibility
Many commercial policies allow members to include family members
Dependents: spouse, unmarried domestic partner, children and step children
Inclusion of family members are not automatic, may elect to include some of the members
VOB: to determine if a patient is qualified to receive coverage/paid benefits according to the insurance policy guidelines

18. Policy Provisions and Terminology
Premium: payment for insurance, may be paid on a monthly schedule
Group coverage: the employer often pays the majority of the premium and employees have the remainder to be deducted from paycheck
If dependent coverage is selected: the premium is higher
Some government plans require of premium

19. Policy Provisions and Terminology
Fee schedule: health care providers establish a fee schedule, which lists their charge for each service they provided (physical exam, flu shot)
Organized by type of service and CPT (Current Procedural Terminology): systems of codes established by AMA to identify specific medical, surgical and diagnostic services
Providers may set their charges; however, in most states they are required to charge the same for each patient and insurance company
Known as provider’s usual charge
Insurance companies are not required to pay providers’ usual charges
Amount considered to by appropriate fee is call allowed amount
AMA: American Medical Association
Legally can not discuss with other providers and used information to set prices (known as price fixing)

20. Policy Provisions and Terminology
Patients are responsible for several different kinds of out-of- pocket expenses
Deductibles: an amount patient must pay to the provider for services before insurance benefits will pay
Plans with low deductibles tend to have higher premiums
PPACA: preventive care does not require a deductible
Family plans:
individual deductible ( max. amount per family member)
Family deductible: max. amount for all family membrs