Health Insurance: Coverage, Cost Sharing, and Reimbursement
The Structure of Health Coverage
Health insurance pools risk and covers medical care for insured persons and dependents. Candidates must know who is insured, what is covered, and how costs are shared.
Concepts You Must Master
- Insured categories: employee insured, dependent, and the rules for qualifying as a dependent. The trap is assuming any family member qualifies.
- Cost sharing: the insured bears a fixed share of covered costs; know the concept of the co-payment and the rules for high-cost cases.
- Benefits in kind versus reimbursement: most care is provided in kind; reimbursement applies in specific cases such as emergency care abroad.
- Exclusions: cosmetic procedures and certain non-medical services are generally not covered.
- Insurer finances: premiums are shared between employer and employee for employee insured persons.
Traps to Watch
The most common error is treating a service as covered because it is medical in nature. Coverage depends on whether it is a covered benefit. Another trap is confusing the dependent test with household registration.
Worked Example
A worker receives treatment for an illness. The provider bills the insurer for the covered portion, and the worker pays the co-payment. If the worker paid the full amount abroad in an emergency, reimbursement may apply subject to conditions. Rule of thumb: is it a covered benefit? → who pays what share?
Study Tip
Make a two-column list: covered versus excluded, and in-kind versus reimbursement.