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MSA (Medical Savings
Account)
A tax-advantaged personal savings account used in conjunction with a high
deductible health policy. Individuals can contribute money to this account
on a pre-tax basis to set aside money for qualified medical care and expenses,
including annual deductibles and copayments.
Major Hospitalization
Policy
The same as Major Medical Insurance, except that it applies to expenses incurred
only when the insured is hospitalized. See also Major Medical Insurance.
Major Medical Insurance
A type of Health Insurance that provides benefits up to a high limit for most
types of medical expenses incurred, subject to a large deductible. Such contracts
may contain limits on specific types of charges, like room and board, and
a percentage participation clause sometimes called a coinsurance clause. These
policies usually pay covered expenses whether an individual is in or out of
the hospital.
Managed Care
A system of health care where the goal is a system that delivers quality,
cost effective health care through monitoring and recommending utilization
of services, and cost of services.
Managed Care Organization
(MCO)
An umbrella term for health plans that provide health care in return for a
set monthly payment and coordinate care through a network of physicians and
hospitals. Health maintenance organizations and point-of-service plans are
managed care organizations.
Manual Rates
Rates based on average claims data for a large number of groups. These rates
are then adjusted for specific groups based on that group's characteristics,
such as the type of industry, changes in benefits from the standard, etc.
Maximum Allowable Costs (MAC) List
A list of prescriptions where the reimbursement will be based on the cost
of the generic product.
Maximum Out-of-Pocket
Costs
The most a member will pay considering copayments, coinsurance, deductibles,
etc.
Managed Care Organization
A general term for health plans that provide health care in return for pre-set
monthly payments and coordinate care through a defined network of primary
care physicians and hospitals.
Medical Expense Insurance
A form of Health Insurance that provides benefits for medical, surgical, and
hospital expenses. This term is used to include coverage under the names Hospital-Surgical
Expense Insurance and Medical Care Insurance.
Medical Information
Bureau (MIB)
A data pool service that stores coded information on the health histories
of persons who have applied for insurance from subscribing companies in the
past. Most Life and Health insurers subscribe to this bureau to get more complete
underwriting information.
Medical Loss Ratio
Total health benefits divided by total premium.
Medical Supplies
Any items which are essential in carrying out the treatment of a patient's
illness or injury.
Medically Necessary
A service or treatment which is absolutely necessary in treating a patient
and which could adversely affect the patient's condition if it were omitted.
Medicaid
A state-funded health care program for low income or disabled persons.
Medicare. A nationwide, federally administered health insurance program authorized in 1965 to cover the cost of hospitalization, medical care, and some related services for most people over age 65. In 1972, coverage was extended to people receiving Social Security Disability Insurance payments for 2 years, and people with ESRD. Medicare consists of two separate but coordinated programs-Part A (hospital insurance, HI) and Part B (supplementary medical insurance, SMI). Almost all persons aged 65 or over or disabled entitled to HI are eligible to enroll in the SMI program on a voluntary basis by paying a monthly premium. Health insurance protection is available to Medicare beneficiaries without regard to income.
Medicare Beneficiary
Anyone entitled to Medicare benefits based on the designation by the Social
Security Administration.
Medicare+Choice
An expanded set of options for the delivery of health care under Medicare
established by the Balanced Budget Act of 1997. Most Medicare beneficiaries
can choose to receive benefits through the original fee-for-service program
or through one of the following Medicare+Choice plans (1) coordinated care
plans (such as health maintenance organizations, provider sponsored organizations,
and preferred provider organizations); (2) Medical Savings Account (MSA)/High
Deductible plans (through a demonstration available to up to 390,000 beneficiaries);
or (3) private fee-for-service plans.
Medicare Economic Index
(MEI)
An index which is often used in the calculation of the increases in the prevailing
charge levels that help to determine allowed charges for physician services.
In 1992 and later, this index is considered in connection with the update
factor for the physician fee schedule.
Medicare Supplement
Insurance
Insurance coverage sold on an individual or group basis which helps to fill
the gaps in the protection provided by the Medicare program. Medicare supplements
cannot duplicate any benefits provided by Medicare, but may pay part or all
of Medicare's deductibles and copayments, and may cover some services and
expenses not covered by Medicare.
Member
Anyone covered under a health plan (enrollee or eligible dependent).
Mental Health Services and Supplies
Items required for treatment of mental illness, including substance abuse
and alcoholism.
Minimum Premium
A cost plus arrangement whereby the employer pays the insurer only a portion
of the premium which is to be used for administration costs. The remainder
is placed in a "bank account" which is then used by the insurer
to pay claims.
Miscellaneous Expenses
Ancillary expenses, usually hospital charges other than daily room and board.
Examples would be X-rays, drugs, and lab fees. The total amount of such charges
that will be reimbursed is limited in most basic hospitalization policies.
Modified Community
Rating
A method of determining rates for medical services based on data from a given
geographic area.
Modified Fee-For-Service
A situation where reimbursement is made based on the actual fees subject to
maximums for each procedure.
National Association of Insurance Commissioners (NAIC)
National organization of state officials charged with regulating insurance.
It has no official power, but wields significant influence. NAIC was formed
to provide national uniformity in insurance regulations.
National Drug Code
(NDC)
A system for identifying drugs.
Noncancellable
A health insurance policy that the insured has a right to continue in force
by payment of premiums, as set forth in the contract, for a substantial period
of time, also as set forth in the contract. During that period of time, the
insurer has no right to make any change in any provision of the contract.
Nonduplication of Benefits
A provision in some health insurance policies specifying that benefits will
not be paid for amounts reimbursed by others.
Nursing Home
A licensed facility which provides general nursing care to those who are chronically
ill or unable to take care of necessary daily living needs.
Open Enrollment Period
A period during which members can elect to come under an alternate plan, usually
without providing evidence of insurability.
Optional Renewable Policy
Contract that grants the insurer the right to terminate a policy on any anniversary,
or, in some cases, on a premium date.
Out-of-Network Care
Medical services obtained by managed care plan members from unaffiliated or
on contracted health care providers. In many plans, such care will not be
reimbursed unless previous authorization for such care is obtained.
Out-of-Pocket Costs
Health care costs the covered person must pay out of his or her own pocket,
including such things as coinsurance, deductibles, etc.
Out-of-Pocket
Maximum
The most money you will be required to pay in a year for deductibles and coinsurance
in addition to regular premiums.
Outpatient
A patient who is not a bed patient in the hospital in which he or she is receiving
treatment.
Over-The-Counter Drugs (OTC)
A drug that can be purchased without a prescription.