16.2 Exclusions and Cost Containment

Achievable Life & Health

18. Medical Expense Insurance

Exclusions and Cost Containment

4 min read

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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 include a coordination of benefits provision. This provision applies when an insured is covered by more than one policy:

One policy is primary (it pays first).
The other policy is excess (it pays after the primary policy’s benefits are exhausted).

Coordination of benefits supports the principle of indemnity by preventing the insured from collecting 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, many policies include administrative controls designed to contain costs. These are commonly called utilization management provisions.

Utilization management uses specific criteria to review whether care is appropriate. Reviews may be performed on a prospective, concurrent, or retrospective basis.

Cost containment policies

Prospective review

Also known as pre-certification. This may require the insured to obtain a second surgical opinion before elective surgery, or require a doctor to verify in advance that hospitalization is necessary and recommend outpatient treatment when appropriate.

Concurrent review

This involves consultation with the provider while treatment is being received, with the goal of reducing costs. Some plans require the use of ambulatory services or require insureds to use outpatient services instead of hospitalization when possible.

Retrospective review

This is a review of treatment that has already been provided to determine whether 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 help ensure care is appropriate.

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.

Malingering Intentionally faking, exaggerating, or prolonging an illness or disability in order to collect insurance benefits.

Common Exclusions in ACA-Compliant Medical Expense Insurance

Custodial care, dental (unless accident), vision, hearing aids
War-related, self-inflicted, or crime-related injuries
Cosmetic surgery (except physician-ordered), care in government facilities

Coordination of Benefits

Prevents insured from collecting more than actual loss
Primary policy pays first; excess policy pays after
Birthday rule for dependent children: parent with earlier birthday is primary

Utilization Management Provisions

Cost containment through care appropriateness reviews
Types of review:
- Prospective (pre-certification, second opinions)
- Concurrent (during treatment, encourage outpatient/ambulatory services)
- Retrospective (post-treatment appropriateness review)

Key Vocabulary

Ambulatory services: outpatient health services
Probationary period: initial days with no sickness coverage after policy starts
Malingering: faking or exaggerating illness for benefits

Exclusions and Cost Containment

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 include a coordination of benefits provision. This provision applies when an insured is covered by more than one policy:

One policy is primary (it pays first).
The other policy is excess (it pays after the primary policy’s benefits are exhausted).

Coordination of benefits supports the principle of indemnity by preventing the insured from collecting 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, many policies include administrative controls designed to contain costs. These are commonly called utilization management provisions.

Utilization management uses specific criteria to review whether care is appropriate. Reviews may be performed on a prospective, concurrent, or retrospective basis.

Cost containment policies

Prospective review

Also known as pre-certification. This may require the insured to obtain a second surgical opinion before elective surgery, or require a doctor to verify in advance that hospitalization is necessary and recommend outpatient treatment when appropriate.

Concurrent review

This involves consultation with the provider while treatment is being received, with the goal of reducing costs. Some plans require the use of ambulatory services or require insureds to use outpatient services instead of hospitalization when possible.

Retrospective review

This is a review of treatment that has already been provided to determine whether 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 help ensure care is appropriate.

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.

Malingering Intentionally faking, exaggerating, or prolonging an illness or disability in order to collect insurance benefits.

Achievable Life & Health

18. Medical Expense Insurance

Exclusions and Cost Containment

4 min read

Font

Discuss

Feedback

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 include a coordination of benefits provision. This provision applies when an insured is covered by more than one policy:

One policy is primary (it pays first).
The other policy is excess (it pays after the primary policy’s benefits are exhausted).

Coordination of benefits supports the principle of indemnity by preventing the insured from collecting 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, many policies include administrative controls designed to contain costs. These are commonly called utilization management provisions.

Utilization management uses specific criteria to review whether care is appropriate. Reviews may be performed on a prospective, concurrent, or retrospective basis.

Cost containment policies

Prospective review

Also known as pre-certification. This may require the insured to obtain a second surgical opinion before elective surgery, or require a doctor to verify in advance that hospitalization is necessary and recommend outpatient treatment when appropriate.

Concurrent review

This involves consultation with the provider while treatment is being received, with the goal of reducing costs. Some plans require the use of ambulatory services or require insureds to use outpatient services instead of hospitalization when possible.

Retrospective review

This is a review of treatment that has already been provided to determine whether 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 help ensure care is appropriate.

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.

Malingering Intentionally faking, exaggerating, or prolonging an illness or disability in order to collect insurance benefits.

Common Exclusions in ACA-Compliant Medical Expense Insurance

Custodial care, dental (unless accident), vision, hearing aids
War-related, self-inflicted, or crime-related injuries
Cosmetic surgery (except physician-ordered), care in government facilities

Coordination of Benefits

Prevents insured from collecting more than actual loss
Primary policy pays first; excess policy pays after
Birthday rule for dependent children: parent with earlier birthday is primary

Utilization Management Provisions

Cost containment through care appropriateness reviews
Types of review:
- Prospective (pre-certification, second opinions)
- Concurrent (during treatment, encourage outpatient/ambulatory services)
- Retrospective (post-treatment appropriateness review)

Key Vocabulary

Ambulatory services: outpatient health services
Probationary period: initial days with no sickness coverage after policy starts
Malingering: faking or exaggerating illness for benefits

Exclusions and Cost Containment

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 include a coordination of benefits provision. This provision applies when an insured is covered by more than one policy:

One policy is primary (it pays first).
The other policy is excess (it pays after the primary policy’s benefits are exhausted).

Coordination of benefits supports the principle of indemnity by preventing the insured from collecting 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, many policies include administrative controls designed to contain costs. These are commonly called utilization management provisions.

Utilization management uses specific criteria to review whether care is appropriate. Reviews may be performed on a prospective, concurrent, or retrospective basis.

Cost containment policies

Prospective review

Also known as pre-certification. This may require the insured to obtain a second surgical opinion before elective surgery, or require a doctor to verify in advance that hospitalization is necessary and recommend outpatient treatment when appropriate.

Concurrent review

This involves consultation with the provider while treatment is being received, with the goal of reducing costs. Some plans require the use of ambulatory services or require insureds to use outpatient services instead of hospitalization when possible.

Retrospective review

This is a review of treatment that has already been provided to determine whether 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 help ensure care is appropriate.

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.

Malingering Intentionally faking, exaggerating, or prolonging an illness or disability in order to collect insurance benefits.