Insurance
| Author | Jeffrey Wilson |
| Pages | 861-865 |
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Perhaps there is no area of the law more complex for the average American than insurance law. Health care and disability insurance coverage is no longer a luxury; it is a necessity for most individuals. By far, the majority of private health care insurance policies that are underwritten in the United States are those covered by employer group plans. As such, the sheer number of insureds in each group plan helps to reduce the cost of premiums and helps to standardize many provisions of plan coverage. By contrast, personal insurance purchased by individuals tends to be more costly, less comprehensive, but ostensibly more "portable," (remaining in effect despite job changes, periods of unemployment).
Health insurance policies are contracts that require the insurer to pay benefits according to the terms of the policy, in return for the payment of premiums and the meeting of other conditions or criteria spelled out in the plan. Payment of benefits (upon the occurrence of a qualifying event such as illness, injury, office visit, etc.) may be reduced by a "deductible" paid by the insured, by a "coinsurance" payment shared with the insured, or by the reaching of a "maximum benefit amount," which caps the amount the insurer will pay for a covered charge. In such circumstances, the provider of the service may agree to accept the insurance payment and drop the remaining balance or may charge the remaining amount to the patient/insured.
Health insurance policy protection comes in many forms, some of the major ones are:
Base Plans: These policy plans cover hospitalization and related charges
Medical and Surgical Benefit Plans: These policy plans cover physician and service charges (radiology, laboratory, etc.) whether received as an "inpatient" or "outpatient"
Major Medical or Catastrophic Plans: These policy plans only cover illnesses or injuries meeting the categorical criteria
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Comprehensive Major Medical Plans: Such plans cover all or most of the above under one policy plan
Two other forms of health insurance should be specifically noted and described:
Hospital Indemnity and/or Specified Disease Plans: Instead of paying or reimbursing for a specific hospital charge, indemnity plans reimburse the insured a specified, fixed amount per day of hospitalization, irrespective of the actual hospital charges, and irrespective of any other insurance coverage. Likewise, specified disease plans pay the insured a fixed, flat amount for each day hospitalized as a result of the specified condition(s) or disease(s). It is important to note that these "insurance" plans are not intended to provide insurance coverage, but rather to supplement the needs of insureds who are hospitalized.
Blue Cross and Blue Shield Plans: "Blues" Plans represent a national federation of local, independent community health service corporations operating as not-for-profit service organizations under state laws. They contract with individual hospitals (Blue Cross) and physicians (Blue Shield) to provide prepaid health care to insured "subscribers." The "Blues" plans differ from conventional insurance plans in that they have already negotiated contractual charges with health care providers, so they will usually pay for a semi-private hospital room, or for nursing services, etc., in full rather than paying a fixed sum or "indemnity benefit" toward the total charge.
At one time, most employers contracted with external insurance companies to provide benefits for their employees under a "group plan." The cost to the employer depended upon the number of employees, among other factors. Increasingly, employers have bought into "self-insured" or "self-funded" plans, wherein they establish trust funds or set aside other revenues to pay insureds' expenses. There are variations of these plans; for example, some provide for companies to pay benefits up to a certain amount, after which an insurer will take over and continue benefits. In some states...
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