The text used to be a part of http://www.cna.com/ site. Later the site underwent alterations and the page was eliminated. This copy of the original text is used only for educational purposes.
Health Insurance Overview
General Explanation of Health Insurance in the USA
Cultural and educational exchange students and international students/scholars visiting the USA to study may be required to purchase health insurance.
In the USA there is no national health care program. Each individual is responsible for paying the costs of his or her own medical care. The high cost of medical and hospital care makes the purchase of health insurance highly recommended.
Here's how insurance works in the USA: independent insurance companies collect a premium from each individual purchasing medical insurance. Each company puts this money into a fund and uses it to pay for medical care for the participants who need it after claims are submitted to the insurance companies.
When you purchase a medical insurance policy, you will receive written confirmation from the insurance company (or program administrator) that your insurance is in force. The confirmation document will usually include a personal identification number and a phone number to call in case of a medical emergency.
If you become sick or injured, you are required to notify the insurance company (or claim administrator). You will be sent a claim form. This must be completed and returned. After reviewing the form, the company (or claim administrator) will make payment, if your claim is eligible. Payment may be made either to you directly or to the medical care provider.
Health insurance in the USA is offered by private insurance companies. The kind of coverage you receive and the cost for this insurance may differ from company to company. Although you may be required to purchase medical insurance as a condition for your visit to the USA, you have the option of selecting the insurance company and program.
There are several factors to be considered in deciding what insurance policy to purchase. The first is the history and stability of the company offering the policy. Find out how long the company has been in business and how long it has been offering medical insurance to students and scholars.
You will want to purchase a policy from a company that is financially stable and that always has funds available to promptly pay the covered medical expenses of its insureds. One way to do this is to ask about the company's A.M. Best rating. A.M. Best is an independent company that rates insurance companies on their financial stability and their ability to pay claims.
Understand the features of each policy. Often, purchasing the lowest cost policy can be a mistake if you find that the policy you purchased won't pay for the medical treatment or care that you need. Review the limitations and exclusions of the policy carefully before you purchase it.
An insurance policy is a contract between the person insured and the insurance company. As with any contract, the policy will state (1) when the company will pay for medical expenses, (2) how much and for how long the company will pay and (3) the process to be followed to have the company pay the covered medical expenses.
To understand the terms of insurance policies issued by insurance companies, be familiar with the definitions of insurance terms and ask questions.
Definitions of Insurance Terms
The following are general definitions of some common insurance terms related to insurance companies and medical insurance policies.
A.M. Best Rating:
A.M. Best is an independent company that rates insurance companies based
on their financial ability to pay claims. Companies are rated on a
scale of A to F with A++ being the best rating and F5 the worst rating. Companies
rated from A++ down to A- are considered secure. This means they are judged to
have the resources to pay off their claims, even if a large number of claims are filed at
once. Companies rated from B to F5 are considered vulnerable. This means if they
receive a large number of claims at once, they may not have the financial resources to
pay them all. Most experts recommend that you purchase insurance from companies
with A.M. Best ratings of A or higher.
Claim:
A claim is a request for payment from your insurance company for medical
expenses incurred due to an illness or injury covered under the terms of the policy.
Each company has requirements for how a claim is to be made; what forms must be
completed by you and your doctor(s); and what additional information, forms, or
reports are required before payment can be made. One of the biggest problems with
claims made by students is that forms are not completely filled out. This means the
insurance companies (or claim administrators) cannot pay the claim. Some insurance
companies require you provide the original bill(s) along with the claim form.
You should keep photocopies of all the documents you submit for a claim.
Covered Injury:
This is an injury that occurs while your insurance policy is in force and for which you
have received medical services, supplies or treatment after the accident. A bacterial infection that occurs through an accidental cut or wound of from a medical or surgical treatment of a sickness may be a covered injury.
Covered Sickness:
This is a sickness which is first diagnosed or treated while your insurance policy is in force.
Co-Insurance:
The co-insurance clause requires you to pay a percentage (or a fixed dollar amount) of your covered medical expenses. The percentage is usually expressed as "80/20" co-insurance. This means after you have paid the deductible amount (if any) as stated in your policy, you will pay 20% of the medical bills and the insurance company will pay the remaining 80% of the covered medical expenses. When your total expenses reach a dollar amount stated in your policy, the insurance company pays 100% of the covered expenses up to the maximum benefit of your policy (from $2000 to $50,000.)
Deductible:
This is the amount you pay before the insurance company pays anything.
There are two types of deductibles: an annual deductible and a per occurrence
deductible.
Under an annual deductible, you will pay all expenses up to the amount of the deductible. Once you have paid the deductible during the policy year, the insurance company will pay for covered medical expenses for the rest of the policy year in accordance with the terms of the policy.
Under a per occurrence deductible, you must pay the deductible amount for each separate sickness or injury. If you have five claims in one year, you would have to pay the deductible five times.
Co-insurance/Deductible Examples:
Example #1: Your total medical expense is $12,000. Your policy has a deductible of $100. The co-insurance clause is 80/20 up to $5000. You must pay the $100 deductible. Then, you will pay 20% of the $5000, or $1000. Your insurance company will pay 80% of the $5,000, or $4,000. The insurance company will pay for 100% of the remaining $6900 in costs.
Example #2: Your policy may state you have to pay $20 per each physician office visit. The insurance company will pay its share of any additional expense.
Exclusions:
These state the types of injuries or illnesses that are not covered.
All policies have exclusions. The most common types of exclusions are pre-existing conditions, self-inflicted injuries, and injuries incurred while committing a criminal act. Injuries resulting from some specific activities may also be excluded. For example, if you plan to drive a car or snow ski, these activities may be excluded. Never assume you will always be covered. Check the exclusions before you purchase insurance.
Health Maintenance Organization (HMO):
Under this
alternate type of health care, you receive all medical services from
the HMO for a pre-determined fee. If you do not use the medical
services from the HMO to which you belong, you will have to pay for
your medical care. If the HMO ceases to operate, you will also have
to pay for your own medical care.
Inpatient:
If you receive medical care at a hospital or clinic for at least one full
day and are charged room and board, you are an inpatient.
Limits:
All insurance policies in the USA have stated limits for the medical
benefits they will pay. They also have maximum limits for what will be
paid for certain services. For example, the policy may state limits to
what it will pay for a daily hospital room, surgical or physician fees.
Medical Evacuation and Repatriation:
Evacuation means the company will pay the cost of transporting you to a
special medical facility or to your home because of a covered medical
condition. Repatriation means the insurance company will pay
transportation costs to return your remains home if you die while in the
USA. These are both important forms of coverage for cultural
exchange/international students/scholars.
Necessary Treatment:
This is medical or dental treatment that is (a) consistent with
generally accepted medical practice for the covered injury or covered
sickness; (b) in accordance with "approved" and generally accepted
medical, surgical or dental practice as determined by the insurance
company; (c) accepted as safe, effective and reliable by a medical
specialty or board recognized by the American Board of Medical
Specialties; and (d) not "experimental or investigational" treatment
as determined by the insurance company.
Outpatient:
If you receive medical treatment from a physician or in a hospital or
clinic, but are not confined or charged room or board, you are an
outpatient.
Pre-existing Conditions:
This refers to any medical conditions that existed before your policy
goes into effect. If you are to arrive in the USA on August 1 and your
policy goes into effect that day, any medical condition that existed
before August 1 would not be covered. Some policies have a waiting
period (such as 6 months) after which pre-existing conditions may be
covered.
Preferred Provider Organization (PPO):
This is a network of physicians, hospitals and clinics that provide
services for pre-negotiated fees. When you need medical care, you can
go to a PPO or a non-PPO provider. The insurance company will pay a
greater portion of your medical expenses if you go to the PPO.
Premium:
This is the amount of money you will be required to pay for your
insurance coverage. It is generally expressed in monthly terms.
You will pay the monthly premium in US dollars for each month of
coverage you purchase. If the premium is not paid, the policy will
not be in force.
Reasonable Expense:
This is the reasonable and customary fee or charge for services, supplies
and treatment in the area in which they are received.
The text used to be a part of http://www.cna.com/ site. Later the site underwent alterations and the page was eliminated. This copy of the original text is used only for educational purposes.