RMI 3501 Lecture Notes - Lecture 6: Independence Blue Cross, Long-Term Care Insurance, Cigna
12 Dec 2016
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Topic 6 – Healthcare basics and terminology
Types of Products/Contracts
1. Traditional Indemnity Plans
a. In 2016, < 5% of the market
b. Role of the insurer is to indemnify the insured for covered losses as per the
contract
c. Insurer does not get involved in managing the size of the loss
d. Basic plan for Hospital Care
i. Hospital only plan
ii. Hospital, surgical and regular medical expenses
e. Major Medical Plans
i. Non-hospital based expenses
ii. Catastrophic insurance when basic plan is exhausted
iii. Supplemental M.M. (2 plans)
iv. Comprehensive M.M. (1 plan)
2. Supplemental Coverages
a. Low frequency, low severity events (in most cases)
b. “Insurance”
i. Dental, vision
c. More like “true insurance”
i. Prescription Drug (P.D.)
ii. Long term care insurance
3. Managed Care Plans
a. HMO
b. PPO
c. POS – type HMO
d. EPOs
4. CDHPs
a. HDHP + HAS or HRA
Types of Third Party Plans
1. Commercial Insurers
a. Not the “Blues”
i. EX: United, Cigna, Aetna
b. Indemnity Plans and supplemental coverages
c. Now managed care and CDHPs
2. Blue Cross and Blue Shield
a. Independence Blue Cross (IBC) – Hospital
b. PA Blue Shield – Physician
c. Non-profit organization (mutual)
d. Insurer of last resort
i. Guarantee Issue
ii. Community rated premium
e. Regulation is easier for the Blues
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