Accident & Health Insurance
Definition
Accident & Health insurance provides benefits to the insured for treatment as
the result of illness or injuries. Accident & Health insurance varies
significantly by coverage. Basic Medical Coverage usually includes coverage for
hospital stays (a portion of room and board), and surgical and medical costs
associated with treatment. Basic coverage usually pays a fixed amount to
providers based on a "usual, reasonable and customary" standard. In addition to
the basic benefits, Major Medical Coverage may pay for a portion of blood
transfusions, prescription drugs, and out-of-hospital costs, including doctor's
visits.
Accident & Health insurance can also vary by delivery method. Traditional
Health (or indemnity coverage) typically allows the insured to select any doctor
or hospital and reimburses a portion of these costs. Managed Care plans usually
involve a network of doctors and hospitals, and provide financial incentives to
utilize the network; each plan has different reimbursement and costs schedules
for "out-of-network" providers. Some managed care arrangements include: Health
Maintenance Organizations (HMOs), Exclusive Provider Organizations (EPOs),
Preferred Provider Organizations (PPOs), and Point-of-Service Plans.
Federal Healthcare Reform