Arrangement between a managed care plan and Centers for Medicare and Medicaid Services (CMS), under which the health plan provides health services and is reimbursed its costs. The beneficiary can use providers outside the plan’s provider network.
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Cost contract (Health Insurance)
A contract between a health care provider and the Health Care Financing Administration. The provider agrees to provide services to people covered under the plan at a reasonable cost.
Cost effectiveness
Efficiency and competence of an insurance plan or program in achieving given intervention outcomes in relation to the program or plan costs. For example, the production of services with the least possible cost or treatment of a medical condition with the least expensive level of care that obtains the desired health outcome of the patient. Also called cost efficiency.
Cost efficiency
See: cost effectiveness.
Cost including charges & freight (CIF)
A shipment term under which the seller assumes the responsibility for the Insurance, and the carriage of goods to the agreed point of destination. These charges are indicated in the invoice along with other charges.
Cost index
Method used to compare the costs of similar plans of life insurance. Policies with smaller index numbers are usually a better buy than comparable policies with larger index numbers.
Cost of insurance (Life Insurance)
A way of determining the net cost of life insurance to the insured. The total amount the insured gets back from the insurer is deducted from the total amount the insured has paid to the insurer.
Cost of insurance charge (Life Insurance)
Synonym for the mortality charge. The charge associated with the pure insurance protection element of a life insurance policy.
Cost of Living Adjustment Rider (COLA)
With this rider, the initial benefit doesn’t change as it does with the automatic increase rider, but the benefit increases after disability. The purpose of this rider is to keep the insured’s purchasing power even with inflation. For example, with a 3% COLA rider and an initial benefit is $5,000 per month, in year 2 the benefit would increase to $5,150 per month or by the amount of inflation if less than 3%.
Cost of living benefit (Health Insurance)
A disability benefit in which the benefit is increased after 12 months and annually thereafter.