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CHAPTER 9: INSURING YOUR HEALTH

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Health Insurance Options. Available to individuals ... Health insurance administered by ... Health Insurance Decisions. Evaluate your healthcare cost risk, ... – PowerPoint PPT presentation

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Title: CHAPTER 9: INSURING YOUR HEALTH


1
CHAPTER 9 INSURING YOUR HEALTH
2
Importance of Health Insurance
  • Protect against economic loss in the event of
    serious accidents or illnesses.
  • Protect against the rising cost of health care,
    which is outpacing other costs in general.

3
Health Insurance Options
1. Private Insurance
  • Available to individuals or families.
  • Provided as group health insurance plans through
    various employers.

4
Traditional Indemnity Plans
  • Also called fee-for-service plans.
  • Typically offer unlimited choice of doctors and
    hospitals.
  • You pay a deductible plus a percentage of
    eligible costs.
  • Reimbursements based on usual, customary and
    reasonable (UCR) charges.
  • Health care services are separate from insurer.

5
Managed Care Plans
  • Monthly payments made directly to health care
    providers.
  • Designated group of doctors and hospitals
    provide services.
  • Plans hold down costs by controlling amount of
    care provided and emphasizing prevention of
    illness.
  • Charge monthly fees plus copayments for services.

6
Types of Managed Care Plans
  • Health Maintenance Organizations (HMOs)
  • Group HMOs provide services for members from a
    central facility one stop shopping!
  • Individual Practice Associations (IPAs) contract
    with physicians who operate out of their own
    offices and community hospitals.

7
  • Preferred Provider Organizations (PPOs)
  • Provide broader network of approved physicians
    and also allow use of out-of-network providers
    for a higher copay.
  • Other Managed Care Plans
  • Exclusive Provider Organizations (EPOs) allow
    members to use only affiliated providers or bear
    entire cost out of pocket.
  • Point-of-Service Plans reimburse members similar
    to indemnity plan when providers outside of
    network are used.

8
Blue Cross/Blue Shield Plans
  • Prepaid hospital and medical expense plans rather
    than insurance.
  • Originally non-profit, but now organized as
    for-profit independent corporations.
  • Blue Cross acts as intermediary between groups
    that want healthcare and physicians who contract
    to provide their services.

9
2. Government Health Insurance Plans
  • Medicare program
  • Health insurance administered by Social Security.
  • Available to qualified people 65 and older and to
    those receiving SS disability benefits.
  • Funded by payroll taxes paid by employers,
    employees and the self-employed.

10
Components of Medicare
  • Part ABasic hospital insurance
  • Provided free for those who are qualified.
  • Covers hospital room and board and various other
    inpatient and outpatient care.
  • Deductibles apply, with amounts varying according
    to length of stay.
  • Part BSupplementary medical insurance
  • Optional coverage available for a monthly premium
    to those eligible for Part A.
  • Covers services of doctors and surgeons, lab
    tests, x-rays, and various other services,
    including some home health care.

11
Medicaid
  • State administered healthcare program for people
    of any age of low economic means.
  • Federal government also provides some amount of
    funding.
  • Eligibility and levels of coverage vary by state.

12
Workers compensation insurance
  • Premiums paid by employers for workers injured on
    the job.
  • State administered coverage varies.
  • Coverage typically includes
  • Medical and rehabilitation expenses
  • Disability income
  • Lump-sum payments for death or dismemberment
  • Second-injury funds

13
Health Insurance Decisions
  • Evaluate your healthcare cost risk, considering
  • Medical care and rehabilitation expenses
  • Loss of income from disability
  • Determine available coverage and resources
  • Choose a health insurance plan

14
Medical Expense Coverage and Policy Provisions
  • Hospitalization
  • Pays a portion of per-day room and board charges,
  • Use of hospital facilities, and
  • Selected other services.

15
Surgical expenses
  • Pays cost of surgery either in or out of the
    hospital.
  • Not all procedures are covered, such as cosmetic
    or experimental surgery.
  • Physician expenses
  • Pays physician fees for nonsurgical care in
    hospital.
  • Includes consultation with specialists and lab
    tests.

16
Major medical insurance
  • Broad coverage for illnesses and injuries of a
    catastrophic nature.
  • Amount of coverage is large.
  • May have lifetime limits.
  • Dental insurance
  • Covers necessary dental care and some dental
    injuries.
  • Mostly offered through group insurance plans.

17
Comprehensive major medical
  • The most desirable coverage, it combines major
    medical with basic hospital, surgical and
    physicians expense coverages.
  • Usually offered through group plans with low
    deductible.

18
Coverages You Dont Need!
  • Accident policies
  • Only cover certain types of accidents, usually
    travel-related ones.
  • Sickness and dread disease policies
  • Coverage limited to specific disease or illness
    prohibited in some states.
  • Hospital income policies
  • Guarantee a per-diem for hospital stays, but
    generally exclude certain illnesses.

19
Policy Provisions of Medical Expense Plans
  • Terms of Payment
  • How much your medical expense plan will pay is
    usually determined by the following 4 provisions

20
Deductible
  • The initial amount not covered.
  • Determined on a calendar-year or per-incident
    basis.
  • Participation (Coinsurance)
  • Company pays only a portion of the medical
    expenses after the deductible.
  • Plan may include a stop-loss provision to cap
    your out-of-pocket expenses.

21
Internal limits
  • Limits amount paid on certain items to usual,
    customary, and reasonable charges even if cost of
    entire surgery or illness is within the norms.
  • Coordination of benefits
  • Eliminates double payment when coverage provided
    under more than one policy.

22
Terms of Coverage
  • Important provisions to consider include
  • Persons and places coveredWho is covered and
    where are you covered?
  • CancellationObtain a policy that cannot be
    canceled unless premiums are not paid.
  • Preexisting conditionsHow are they covered?
  • Pregnancy and abortionWhat is the extent of the
    coverage provided?

23
  • Mental illnessHow restricted is the coverage?
  • Rehabilitation coverageHow much is provided?
  • Continuation of group coverage (COBRA)At your
    expense, you can continue your previous
    employers coverage for up to 18 months after you
    leave the job.

24
Cost Containment Provisions for Medical Expense
Plans
  • Pre-admission certification
  • Continued stay review
  • Second surgical opinions
  • Waiver of coinsurance
  • Limitation of insurers responsibility

25
Long-Term Care Insurance
  • Provides for delivery of medical and personal
    care, other than hospital care, to persons with
    chronic medical conditions due to illness or
    frailty.

26
Do You Need Long-Term Care Insurance?
  • Do you have a lot of assets to preserve for your
    dependents?
  • Can you afford the premiums?
  • Is there a family history of disabling disease?
  • Are you male or female?
  • Do you have family who can care for you?

27
Long-Term Care Provisions
  • Type of careWhat types of care are covered? Ex
    nursing home, in-home.
  • Eligibility requirements Gatekeeper provisions
    determine when insured qualifies for benefits.
  • Services coveredWhat levels of service are
    covered? Ex skilled, intermediate care,
    custodial.

28
  • Daily benefitsWhat is the daily maximum
    reimbursement?
  • Benefit duration How long will the benefits
    last?
  • Waiting period Once eligible, how long before
    the payments begin?

29
  • RenewabilityIs the policy guaranteed renewable?
    Optional renewability NOT desired!
  • Preexisting conditionsHow will they be handled?
  • Inflation protectionCan you increase benefits
    with rising costs?
  • Premium levelsHow much are they? Will they
    increase?

30
How to Buy Long-Term Care Insurance
  • Buy the policy while you are healthy.
  • Buy the right types of coverage, but dont buy
    more coverage than you need.
  • Understand what the policy covers and when it
    pays benefits.

31
Disability Insurance
  • Provides families with weekly or monthly payments
    to replace income lost when the insured is unable
    to work due to an illness, injury or disease.

32
Estimating Disability Needs
  • 1. Calculate monthly take-home pay.
  • 2. Estimate existing benefits, such as
  • Social Security
  • Other government benefits
  • Company disability benefits
  • Group disability policy benefits
  • 3. Subtract the total of (2) from (1)

33
Disability Insurance Provisions
  • Definition of disability"Own Occupation" most
    desirable. Benefits may never kick in if you can
    perform Any Occupation.
  • BenefitsHow much will they be and how long will
    they last?
  • Probationary periodHow long after policy is
    issued before benefit privileges are available?

34
  • Waiting periodOnce disabled, how long before
    benefits begin?
  • RenewabilityIs it guaranteed renewable or
    noncancelable?
  • Other featuresLook for cost of living adjustment
    (COLA), guaranteed insurability option, and
    waiver of premium.

35

THE END!
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