Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceHard
A Florida agent is advising a client about a new medical expense policy that states the insurer will only pay a specific, fixed amount for certain procedures, regardless of the actual charges. The client is responsible for any difference. What type of benefit schedule is this policy utilizing?
- ARelative Value Scale (RVS)
- BService Benefit
- CUsual, Customary, and Reasonable (UCR)
- DScheduled Benefit
Show answer & explanationAnswer & explanation
Correct answer: D. Scheduled Benefit
A Scheduled Benefit policy pays a specific, fixed dollar amount for each medical procedure listed in the policy, regardless of the actual cost charged by the provider. The insured is responsible for any amount exceeding the scheduled benefit.
Why the other options are wrong
- A. RVS assigns points to procedures, which are then multiplied by a conversion factor to determine payment, not a direct fixed amount per procedure.
- B. Service Benefit plans typically pay directly to the provider for the service provided, often covering 100% after deductibles/coinsurance, not a fixed amount.
- C. UCR plans pay based on what is typical for a service in a geographic area, not a fixed amount.
Scheduled Benefit Policy
A medical expense policy that pays a predetermined, fixed dollar amount for each specific medical procedure or service, with the insured being responsible for any remaining balance.
- Fixed dollar amount per service
- Insured pays difference if actual cost is higher
- Common in older or more basic plans
- Contrast with UCR or service benefit plans
Memory trick: Scheduled Benefits are Fixed; UCR is Flexible; Service is Full.