Basic Surgical Expense
MR. WATSON: Now let's talk about the surgical benefit, because the Basic Hospital Expense policy doesn't pay the surgeon's fees, does it?
ALL: No.
MR. WATSON: What do you think Basic Surgical Expense insurance would cover? It's called SAP, S-A-P.
- Surgeons Fees
- Anesthesiologist
- Post-OP
MR. WATSON: So does the surgical policy cover the operating room?
ALL: No.
MR. WATSON: Where was that covered?
STUDENTS: Under the Basic Hospital miscellaneous.
MR. WATSON: What about the anesthesiologist?
ALL: Yes, under the Surgical Expense policy.
MR. WATSON: So it covers the surgeon's fees. What is he going to do before he operates on you? Puts you to sleep. Then what? You wake up. Post-op. Post-op. So what does the "P" stand for?
WOMAN: Pray.
MR. WATSON: I like that as good as I do the other ones.
MR. WATSON: So we know what a surgical policy pays for - SAP. How does it pay the benefits? One of three ways.
- Reasonable & Customary (the average cost of surgeries in a geographical area)
- Surgical Schedule (surgeries are listed in the policy and assigned a maximum dollar amour the company will pay)
- Relative Value (same as above but use points)
MR. WATSON: The first way is what is called reasonable and customary . Generally that's whatever the average is of a certain geographical area. In other words, Palm Beach County, where the rich folk live, they would pay a higher benefit for surgery than they would in Hillsborough County, us poor folk. Do you agree?
ALL: Yes.
MR. WATSON: And Hillsborough County would pay a lot more than, say, Polk County.
MR. WATSON: So, let's say the reasonable and customary charge for a procedure is $500 in your area and the physician charged $550. You would be responsible for paying the extra $50. If the surgeon charged $450, it would pay $450, not $500. You don't get to make a profit and use that extra money for something else. It does not go towards a deductible because, remember, this is a basic policy, there are no deductibles.
MR. WATSON: A surgical schedule. When we say "schedule," that means "listed." Surgical schedule. That means it's listed in the policy. And we assign a dollar amount to it. We're not going to list all the surgeries, but we'll have a good sampling of them in the policy. If you have a surgery and it's not listed in the policy, you call the company's home office and they will tell you what they are going to pay for it.
MR. WATSON: But there is no guessing here. We know for heart surgery we are going to pay this, and for kidney surgery we pay that.
MR. WATSON: If the exam ever asks about benefits being paid on a non-surgical schedule, they are asking about reasonable & customary.
MR. WATSON: Next is called a relative value scale . Relative value. Instead of using a dollar amount, we use a set of points. Everybody's points are the same, no matter what part of the state you live in. In other words, let's say for brain surgery, you are going to get 10,000 points-your points, my points, everybody's points. Heart surgery? Maybe for heart surgery we get 5,000 points. Setting a broken finger is only going to get you 100 points.
MR. WATSON: Now, what separates the premium for everybody? Say there's another man like me 48 years old. I buy a $20-per-point factor. He bought a $10-per-point factor. If everything was the same between him and me, my premium would be twice as much as his. Do you agree?
ALL: Yes.
MR. WATSON: But look what mine would pay for brain surgery, $20 by 5,000 points. For a broken finger, it would be $20 multiplied by 100 points. In those same scenarios his policy would only pay $10 per point so he would pay more out of pocket for the same surgeries than I would. You have to do a little math. Does that make sense?
ALL: Yes. Maybe he had a smaller brain.
MR. WATSON: There are three ways for the surgical policy to pay the benefits:
- reasonable and customary
- surgical schedule
- relative value
MR. WATSON: Again, don't rush this. Make sure you understand what is covered and how the benefits are paid.
Basic Physicians (non-surgical) Expense
MR. WATSON: The next policy is a Basic Physicians (non-surgical) Expense policy.
MR. WATSON: Examples covered under the basic physicians expense policy includes office visits and the care of a physician while you are hospitalized for a non-surgical reason. If you are hospitalized for a non-surgical reason. Tests. Got it?
