chapter 27 Health insurance Basics

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    What is insurance?

    A contract that provides financial protection against specified losses.

    What is a premium?

    The periodic payment made for an insurance policy.

    What is cost-sharing?

    The portion of healthcare expenses paid by the policyholder.

    What is a deductible?

    The amount a policyholder pays before insurance coverage begins.

    What is coinsurance?

    The percentage of costs a policyholder pays after the deductible.

    What is a copayment?

    A fixed amount paid by the policyholder for each healthcare service.

    How does health insurance differ from auto insurance?

    Health insurance covers medical expenses, while auto insurance covers vehicle-related damages.

    What is Medicare?

    A federal program providing health coverage for individuals over 65 or with disabilities.

    What are the four parts of Medicare?

    Part A covers hospital care, Part B covers outpatient care, Part C is private plans, and Part D covers prescriptions.

    What is Medicaid?

    A program assisting low-income individuals with healthcare costs.

    What is the Children’s Health Insurance Program (CHIP)?

    A program providing health coverage for children in families with incomes too high for Medicaid.

    What is workers' compensation?

    Insurance providing benefits to employees injured on the job.

    What is a managed care organization (MCO)?

    A health insurance plan that provides care through a network of providers.

    What is a Health Maintenance Organization (HMO)?

    A type of managed care plan requiring members to use a primary care provider.

    What is a Preferred Provider Organization (PPO)?

    A managed care plan allowing members to see any provider but offering lower costs for in-network services.

    What is preauthorization?

    A process requiring approval from the insurance company before certain services are provided.

    What is the Affordable Care Act (ACA)?

    Legislation aimed at increasing health insurance coverage and reducing costs.

    What is a claim?

    A formal request for payment from an insurance company for services rendered.

    What is a subscriber?

    The individual responsible for paying the insurance premium.

    What is a participating provider (PAR)?

    A healthcare provider who has a contract with an insurance plan to provide services.

    What is utilization management?

    A process used by insurers to evaluate the necessity of medical services.