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. Historical Trends in Health Insurance Costs

4. Health Insurance Options Available to individuals or families. Provided as group health insurance plans through various employers.

5. Traditional Indemnity Plans

6. 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.

7. 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.

8. 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. Types of Managed Care Plans

9. How the Most Common Types of Health Plans Compare

10. 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.

11. Government Health Insurance Plans

12. Components of Medicare

13. Medicaid

14. 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

15. 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

16. 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.

17. 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. Medical Expense Coverage and Policy Provisions

18. Broad coverage for illnesses and injuries of a catastrophic nature. Amount of coverage is large. May have lifetime limits. Comprehensive major medical: Combines major medical with basic hospital, surgical and physicians expense coverages. Usually offered through group plans with low deductible. Medical Expense Coverage and Policy Provisions

19. Dental services: Covers necessary dental care and some dental injuries. Mostly offered through group insurance plans.

20. Coverages You Don’t 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

21. 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:

22. 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. Policy Provisions of Medical Expense Plans

23. 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. Policy Provisions of Medical Expense Plans

24. Terms of Coverage

25. Mental illness—How restricted is the coverage? Rehabilitation coverage—How much is provided? Continuation of group coverage (COBRA)—At your expense, you can continue your previous employer’s coverage for up to 18 months after you leave the job. Terms of Coverage

26. Cost Containment Provisions for Medical Expense Plans Pre-admission certification Continued stay review Second surgical opinions Waiver of coinsurance Limitation of insurer’s responsibility

27. 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.

28. 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?

29. Long-Term Care Provisions and Costs Type of care Eligibility requirements Services covered Daily benefits Benefit duration Waiting period Renewability Preexisting conditions Inflation protection Premium levels

30. Typical Provisions in Long-Term Care Insurance Policies

31. How to Buy Long-Term Care Insurance Buy the policy while you are healthy. Buy the right types of coverage, but don’t buy more than you need. Understand what the policy covers and when it pays benefits.

32. Disability Income 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.

33. 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)

34. Estimating Disability Income Insurance Needs

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

36. Waiting period—Once disabled, how long before benefits begin? Renewability—Is it guaranteed renewable or noncancelable? Other features—Look for cost of living adjustment (COLA), guaranteed insurability option, and waiver of premium. Disability Insurance Provisions