VALERIA FERNÁNDEZ HERNÁNDEZ

Individual Medical Expense Benefits

There are two types of medical expense benefits: the earliest form of medical
expense insurance was an additional benefit offered under a disability contract.
This provided for an increased payment in the event of hospitalization.

The most common type of indemnity benefits is for hospital coverage. It involves
naturally from the extra payment provided along with a disability policy. For the
company the higher loss ratios expected from this type of appeal, be it guaranteed
issue or with limited underwriting, are offset by reduced marketing, underwriting
and policy issue expenses.

Some of the early hospital indemnity plans called for a three-day elimination period
for sickness while providing first day coverage for accidents. This did create some
problem in determining whether a given claim was for an accident or sickness.

Hospital expense reimbursement benefits, there are two advantages of benefits

this type of coverage:

 The benefits are limited and should be considered as supplemental

coverage at best.

 The coverage has to be constantly upgraded in an inflationary period if it is

to provide adequeate funds at claim time

Medical Expense reimbursement benefits: expense reimbursement insurance that

oays the fees of physicians or other health care professionals is commonly called
medical expense insurance. Its popularity followed that of hospital expense
coverage and was developed by the same third-party players.

Problems of medical expense insurance:

● Avoid setting up annuities for physicians who could schedule periodic visits
for patients suffering from chronic conditions.
● Writing medical expense insurance in conjunction with surgical coverage
was duplication of benefits. Policies commonly specifies that benefits were
not payable under the medical provisions if they were payable under the
surgical benefits

There are 6 key features of any major medical policy that must be examined in
order to understand the actual policy coverage: eligible medical expense,
deductible, accumulation period, benefit period, coinsurance percentage, maximum
benefit.