Standard 7.01

1. Standard 7.01 Classify types of health insurance and features of types of coverage.

2. What are the types of health insurance and things to consider when selecting options? Essential Questions

3. Prepare to bear the costs themselves. • Use safety and avoidance measures to try to avoid costly incidents. • Transfer risks to another party by purchasing insurance policies. Handling RiskIndividuals handle risk in three ways:

4. Insurance is a risk-management technique, an arrangement in which an insured pays money to an insurer to gain protection against risks and compensation for loses.

5. Medical benefits • Pay a large part of hospital and surgical care, may also pay part of some other medical expenses (doctor’s visits) • Major Medical • Pays for long-term illness expenses after basic medical benefits limits have been reached (cancer) • Dental Insurance • Covers all/part of routine services (examination cleanings, Xrays) and some other procedures • Vision Benefits • May cover all or part of eye examinations, glasess, and contact lens Types of Coverage

6. Major Medical Medical Benefits Dental Insurance Vision Insurance

7. Disability Insurance • Supplies all/part of a worker’s pay if unable to work due to illness or injury. • Short term vs. Long Term • Often a waiting period before payments begin • Long-term care insurance • Intended to cover the costs of extended home nursing care and related expenses which are not covered by regular medical benefits • Accident Insurance • Covers costs from injuries that occur at an eligible location and/or time. • Large group rates keep costs low, but do not cover illness. • Medigap Insurance • Private insurance available to citizens 65 and older who have Medicare A and B plans. • Covers the cost of co-payments and deductibles. Types of Coverage

8. Accident Insurance Medigap Insurance Long-Term Care Insurance Disability Insurance

9. Medicare Medicaid State and federal governments share the cost to pay certain medical bills for low-income persons Government Programs • The federal government pays some of the medical expenses of the elderly, ages 65 and over, and for some people with disabilities. • Client can choose managed Medicare called “Medicare Advantage” or get fee-for service

10. Children’s Hospital Insurance Programs (CHIP) COBRA Consolidated Omnibus Budget Reconciliation Act Gives the right to pay one’s own premiums and continue employer-sponsored group health insurance plan for a limited time after leaving a job. Government Programs • Health insurance for children under eighteen whose parents earn too much to qualify for Medicaid, but not enough to buy private insurance. • Federal funds are distributed by state programs to cover costs.

11. Health Maintenance Organization (HMO) Preferred Provider Organization (PPO) An agreement between health providers with employers or insurers to provide services at a reduced rate to employees. Non-Government Programs • A health care group that provides health care services to members for a set fee and a small co-pay.

12. Point of Service (POS) Fee for Services plan A plan in which an insured can select his/her own doctors and hospitals, pay costs at time of visit, and file form with insurance company for reimbursement of covered expenses. Non-Government Programs • Members use a primary physician who refers them as needed to participating specialist or members can see non-participating health providers. • But, members pay more to use non-participating health providers.

13. Health Savings Account • Employer-sponsored plan where monies are automatically deposited before taxes into a savings account to cover predicted medical, dental, vision, and child care expenses for a twelve month period. • Monies not spent within the year are transferred to the savings account provider. Non-Government Programs

14. Co-payments • The percentage of costs you pay once the deductible is met • Deductible • The amount of medical expenses you pay each term (usually one year) before insurance will cover any expenses. • The higher the deductible the lower the premiums • Pre-existing conditions • Expenses that are not covered because they existed when coverage began • E.g. pregnancy expenses for 10 months after the policy goes into effect • Maximum benefit • The maximum dollar amount the insurance company will pay over the term and/or a lifetime. • Chiropractic care often has a term limit and cancer expenses often have a lifetime limit. Seek the plan whose features best meets your needs

15. Open enrollment period • The period of time during which a person whose is eligible has to consider their options before enrolling without cost increases or exclusions. • Preauthorization • Insurance approval is required in advance for expensive and/or extensive tests, treatments, and/or surgery. • Exclusions • Items that the insurance policy will not cover • E.g. cosmetic surgery, teen pregnancy, new treatments that do not yet have FDA approval • Renewability • What extenuating circumstances would cause the insurance company to not renew your policy at the end of the policy contract period. Seek the plan whose features best meets your needs

16. Review several policies to determine exclusions and deductibles • Consider the costs • Ask advice from others who have used the plan • Consider services that may/may not be covered • Office visits, medical tests, maternity care, physical therapy, outpatient surgery, inpatient hospital services, prescription drugs, preventative care, and home health care Choosing a Health Care Plan