HIA flashcards
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33 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Risk pooling
- Combining many similar exposure units so that the cost of losses is spread across the group, making individual premium more predictable than any single person's loss.
- Adverse selection
- The tendency of higher-risk individuals to seek or retain more coverage than lower-risk individuals, which can raise average claims unless controlled by underwriting or waiting periods.
- Moral hazard
- Behavior change caused by having insurance, such as using more services because the insured bears little cost; deductibles and coinsurance reduce it.
- Loss ratio
- Incurred claims divided by earned premium, expressed as a percentage; it measures how much of premium is consumed by claims.
- Indemnity principle
- Benefits should restore the insured to approximately the pre-loss financial position, not create profit; this justifies benefit limits and coordination of benefits.
- Incontestability clause
- After the policy has been in force for a stated period, usually two years, the insurer cannot void coverage for misstatements except fraud or nonpayment.
- Grace period
- A period after the premium due date during which the policy remains in force; commonly 7, 10, or 31 days depending on premium mode.
- Free-look provision
- A right allowing the policyholder to return a newly issued policy within a stated period, commonly 10 to 30 days, for a full premium refund.
- Coordination of benefits
- Rules determining which plan pays first when a person has multiple coverages; the primary plan pays first and the secondary pays the remaining balance.
- Entire contract clause
- States that the policy, attached endorsements, and the application form the complete agreement, and that agents cannot orally modify its terms.
- Reinstatement provision
- Restores a lapsed policy after payment of overdue premium and evidence of insurability; a new contestable period may apply to new statements.
- HMO
- A health maintenance organization provides care through a closed network with a primary care gatekeeper and generally no out-of-network coverage except emergencies.
- PPO
- A preferred provider organization contracts with providers for discounted rates; in-network care costs less, but out-of-network care is allowed with higher cost sharing.
- Health savings account
- A tax-advantaged account paired with a qualifying high-deductible health plan; contributions and qualified withdrawals are tax-free and funds are portable.
- Own-occupation disability
- A disability definition that pays benefits when the insured cannot perform the duties of their own specific occupation, generally broader than any-occupation.
- Long-term care insurance
- Coverage for custodial and chronic care, typically triggered by inability to perform two of six activities of daily living or by cognitive impairment.
- Medicare Part A
- Hospital insurance covering inpatient hospital stays, skilled nursing facility care after a qualifying stay, hospice, and some home health services.
- Medicare Part D
- The outpatient prescription drug benefit delivered through private stand-alone plans or included in Medicare Advantage plans.
- Medicaid
- A jointly federal- and state-funded, state-administered program providing health coverage to low-income and categorically eligible individuals.
- COBRA continuation
- A law allowing continuation of group health coverage after a qualifying event, generally up to 18 months, with the individual paying the full premium.
- CHIP
- The Children's Health Insurance Program provides coverage to low-income children whose family income exceeds Medicaid limits but falls below state thresholds.
- Field underwriting
- The agent's role in gathering accurate application information, reporting known material facts, and collecting the initial premium when required.
- Community rating
- A rating method charging the same premium to all members of a pool regardless of individual health status or claims experience.
- Experience rating
- A rating method that adjusts a group's premium based on that group's own past claims experience relative to expected losses.
- Guaranteed renewable
- A policy the insured may renew at their option; the insurer may raise premiums by class but cannot cancel or single out an individual for health reasons.
- Combined ratio
- The sum of the loss ratio and expense ratio; a value above 100 percent indicates an underwriting loss for the insurer.
- Coinsurance
- The insured's percentage share of covered expenses after the deductible is met, such as 20 percent of the allowed charge.
- Out-of-pocket maximum
- A cap on the insured's cost sharing for covered in-network services during a benefit period, after which the plan pays covered costs in full.
- Usual, reasonable, customary
- A reimbursement benchmark limiting payment to prevailing charges for similar services in a geographic area; charges above it may be balance billed.
- Subrogation
- The insurer's right to recover benefits it paid from a third party legally responsible for the insured's injury or loss.
- Explanation of benefits
- A statement itemizing charges, allowed amounts, insurer payment, and patient responsibility; it is not a bill.
- McCarran-Ferguson Act
- A federal law leaving regulation of the business of insurance primarily to the states, provided state regulation is adequate.
- Twisting
- Misrepresentation or incomplete comparison that induces a policyholder to lapse or surrender existing coverage, an unfair trade practice prohibited by state law.