Exclusions and Cost Containment | Medical Expense Insurance

Exclusions

Exclusions that are common to most ACA-compliant medical expense insurance policies include:

Custodial care in nursing homes
Dental care, unless required due to a covered accident
Vision care
Sickness or accident covered by workers’ compensation
Hearing aids
War-related injury
Intentionally self-inflicted injury
Injury sustained while committing a crime
Cosmetic Surgery
- Elective cosmetic surgery is not an insurable expense. The only exception is in rare cases where it is required under a physician’s orders.
Care in a Government Facility
- Government facilities are operated as an expense of the government and treatment is provided at the government’s expense.

Medical expense insurance exclusions

Cost Containment

Most medical expense policies contain a coordination of benefits provision, requiring that when an insured is covered by more than one policy, one policy is considered to be primary (pays first) and the other excess (pays after the benefit of the first policy is exhausted). Coordination of benefits reinforces the principle of indemnity and prevents the client from recovering more than the actual loss.

Sidenote

Know this...

If a married couple has a child who is covered as a dependent on both parents’ group plans, the parent whose birthday falls first in the calendar year will be the primary insurance.

As health care costs rise, more and more policies provide for some type of administrative control in an attempt to contain costs, commonly called utilization management provisions. Utilization management was established using certain criteria to review the appropriateness of care. A review may be performed on a prospective, concurrent, or retrospective basis.

Cost containment policies

Prospective Review

Also known as pre-certification, this includes the requirement that the insured obtain a second surgical opinion before having elective surgery or that a doctor verify, in advance, that hospitalization is necessary and recommend outpatient treatment if possible.

Concurrent Review

It involves consultation with the provider in an attempt to lower the costs of treatment as it is received. Some plans require the utilization of ambulatory services or require that insureds take advantage of outpatient services in lieu of hospitalization.

Retrospective Review

This is the review of the treatment previously provided, which determines whether or not the treatment was appropriate under the circumstances.

Lesson Summary

Exclusions common in medical expense insurance policies include:

Custodial care in nursing homes
Dental care, unless due to a covered accident
Vision care
War-related injuries
Intentionally self-inflicted injuries

Cost containment measures include coordination of benefits and utilization management provisions such as prospective, concurrent, and retrospective review to ensure appropriate care.

Chapter Vocabulary

Definitions

Ambulatory Services: Health services provided to members who are not confined to a health care institution. Ambulatory services are often referred to as “outpatient” services.
Probationary Period: A specified number of days after the date of the issuance of the policy, during which coverage is not afforded for sickness. Sickness protection does not become effective until after the end of such probationary period. This is a one time event, whereas an elimination period may occur upon each separate disability.