More Info on Technical Terms Used to Describe Plan Benefits
Part 1: The Basic Tools, Chapter 2: Understanding the Language of Health Insurance Page 13
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Historically, health insurance plans had their origin in cover age for hospital-based treatment. Over the years, additional benefits were added from time to time. At first, those added benefits could be purchased separately as riders to the original plan. As the years went by, in many cases some of those riders were routinely added to the standard plan until eventually both the original plan and the riders began to be offered as a single group. However, rather than being fully integrated into the plan, the added provisions were sometimes incorporated as separate benefit provisions, such as "major medical" or "basic benefits." That group of benefit provisions, combined with the original hospitalization policy, appears to have evolved into the type of individual and group health insurance plans often provided by insurance companies today.
As a result, although consumers who purchase a health insurance policy at this point may be under the impression that they are purchasing a fully integrated policy -- with a single deductible and a single set of rules -- the reality is that they may be purchasing a group of separate benefit provisions offered as a single policy. Each of those provisions is designed to provide coverage for a different kind of medical treatment, procedure, or type of equipment, and each policy provision may have a different deductible and may follow different rules. For example, many health insurance policies currently include separate provisions for hospitalization, surgery, basic benefits, major medical, durable medical equipment, and for the treatment of mental and emotional illnesses. Policies may also include a variety of separate riders, providing cover age for eyeglasses, prescription medications, and other benefits.
The hospitalization provision and the surgical provision -- sometimes referred to as hospital-surgical -- generally represents the original type of policy offered by insurers decades earlier. It provides coverage for inpatient hospital treatment, including the cost of hospital facilities, nursing care, room, and food. Basic benefits may include coverage for specific medical tests, ambulance service, and oxygen. Basic benefits may be paid even when the yearly deductible -- the amount you must pay each year before the insurance company will begin to reimburse you for claims -- has not yet been met.
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