Background on Health Insurance 1 of 2insurance companies or the government that covers health care expenses incurred by policyholders for necessary medical care... Private Health Insura
Trang 2Chapter Objectives (1 of 2)
Trang 3Chapter Objectives (2 of 2)
within your financial plan
Trang 4Background on Health Insurance (1 of 2)
insurance companies or the government that covers health care expenses incurred by
policyholders for necessary medical care
Trang 5Background on Health Insurance (2 of 2)
obtain it, but which health plan to purchase and how much coverage to purchase
Trang 6Private Health Insurance (1 of 7)
can be purchased from private insurance
companies to provide coverage for health care expenses
– Most common are fee for service (indemnity) plans or
managed care plans
Trang 7Private Health Insurance (2 of 7)
– Most common are fee for service (indemnity) plans or
managed care plans
– Fee for service plan: health insurance that reimburses
individuals for part or all of the expenses they incur from health care providers; individuals are free to seek care from a primary care physician or a specialist
– Managed health care plan: a health insurance policy
under which individuals receive services from specific doctors or hospitals that are part of the plan
Trang 8Private Health Insurance (3 of 7)
– Most common are fee for service (indemnity) plans or
managed care plans
– Health maintenance organization (HMO): a health
insurance plan that covers health care services approved by doctors; a primary care physician provides general health services and refers patients to a
specialist as necessary
– Preferred provider organization (PPO): a health
insurance plan that allows individuals to select a health
Trang 9Private Health Insurance (4 of 7)
Discount on charge arrangement: an arrangement in which the preferred provider organization (PPO) pays a specific
percentage of the health care providers’ charges
Per diem rate arrangement: an arrangement in which the preferred provider organization (PPO) pays the provider a specific sum for each day a patient is hospitalized
Trang 10Private Health Insurance (5 of 7)
– Higher for family coverage
– Self-employed, unemployed or those whose employer
doesn’t offer health care may purchase private coverage
– Quotes and applications available online
Trang 11Private Health Insurance (6 of 7)
– Trade-offs between flexibility in selecting physician and premium
– HMOs and PPOs offer brochures with comparative
information
Trang 12Private Health Insurance (7 of 7)
EXHIBIT 12.1 Comparison of Private Health Insurance Plans
Type of Private Health Plan Premium Selection of Physician
Indemnity Plan High Flexibility to select physician or
specialist Managed Care: HMOs Relatively low Primary care physician refers
patients to specialist Managed Care: PPOs Low, but usually
higher than HMOs
There is a greater number of physicians to choose from in PPOs than HMOs
Trang 13Exhibit 12.2 Questions to Ask When
Considering a Particular HMO or PPO
EXHIBIT 12.2 Questions to Ask When Considering a Particular HMO or PPO
Questions Regarding Your Cost
1 Monthly premium?
2 Deductible?
3 Coinsurance/Co-pay amounts?
4 Limits on coverage?
5 Maximum out-of-pocket expenses per year?
Questions Regarding the Doctors/Health Care Providers
1 How many doctors are in the plan?
2 Who are the doctors in the plan?
3 Which doctors are accepting new patients?
4 How long in advance must you schedule a routine visit to the doctor?
5 Where are the doctors located?
6 What health care services do the doctors provide?
7 What hospitals/labs/diagnostic centers are in the plan?
General Questions
1 Is access to specialists only allowed with a referral from a primary care physician?
2 What coverage is provided if the patient receives services out of the primary network (for example, a visit to an emergency room while out of town)?
3 If a physician is accessed outside of the plan, are there out-of-network benefits?
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types of plans including PPOs and HMOs.
Trang 15Contents of Health Care Insurance
Trang 16Contents of Health Care Insurance
– Pregnancy
– Dental insurance: insurance that covers part or all of
the fees imposed for dental services, including annual checkups, orthodontics, and oral surgery
– Vision insurance: insurance that covers part or all of the fees imposed for optician and optometrist services, including annual checkups, glasses, contact lenses, and surgery
Trang 17Contents of Health Care Insurance
Trang 18Contents of Health Care Insurance
– These should be included in your budget
– Flexible spending account: an account established by
the employer for the employee to use pretax income to pay for medical expenses
Funds cannot be carried over to the next year
Trang 19Government Health Care Plans (1 of 4)
– Provides health insurance to people over age 65
– Part A covers inpatient care in hospitals or nursing
facilities and some home health
– Part B is optional coverage
– Part C is a combination of Part A and Part B provided
through private insurance companies
– Part D provides coverage for prescription drugs
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offered by Medicare, including the specific benefits that are available.
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insurance companies to cover medical expenses that are not covered by Medicare
Trang 22Financial Planning Online (3 of 5)
by Medigap.
Trang 23Government Health Care Plans (3 of 4)
– Medicare Prescription Act
Allows coverage for senior citizens and persons with disabilities
Covers some prescription drugs
Allows seniors to purchase various forms of coverage for prescription drugs
Health savings account: an account that shelters income from taxes and that can be used to pay health care expenses
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search term “health savings account”
accounts.
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care to the aged, blind, disabled, and needy
families with dependent children
Trang 26Legislation Affecting Health Care
(COBRA)
– COBRA allows continuation of coverage provided
through an employer’s plan for 18 months
(HIPAA)
– HIPAA prohibits insurance companies from denying
health insurance coverage based on applicant’s health
Trang 27Legislation Affecting Health Care
– Patient Protection and Affordable Care Act (PPACA) passed in 2010
– Allows young adults to continue on their parent’s plan
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term “Affordable Care Act”
Affordable Care Act
Trang 29Long-Term Care Insurance (1 of 4)
expenses associated with long-term health
conditions that cause individuals to need help with everyday tasks
– Provided by private insurance companies
– Covers care in a nursing home, assisted living facility,
or at home
– Premiums quite expensive
Trang 30Long-Term Care Insurance (2 of 4)
– Eligibility to receive benefits
– Types of services
– Amount of coverage
– Elimination period to receive benefits
– Maximum period to receive benefits
– Continued coverage
Trang 31Long-Term Care Insurance (3 of 4)
premiums
– Provisions of policy
– Health condition
– Shop around and compare premiums
Trang 32Long-Term Care Insurance (4 of 4)
– Consider your family’s health history
– Consider your financial situation
Trang 33Disability Insurance (1 of 5)
provides income to policyholders in the event that they become disabled
– Most liberal is “own occupation” definition
– Most restrictive is “any occupation” definition
Trang 34Disability Insurance (2 of 5)
– Individual disability insurance
– Employer disability insurance
– Insurance from Social Security
Income determined by amount of Social Security contributions you have made
– Insurance from Workers’ Compensation
Trang 35Disability Insurance (3 of 5)
– Amount of coverage
May be a dollar amount or a percentage of your income
– Probationary period: the period extending from the time your disability income application is approved until your coverage goes into effect
Trang 36Disability Insurance (4 of 5)
– Waiting period: the period from the time you are disabled
until you begin to receive disability income benefits
– Length of time for disability benefits
– Non-cancelable provision
– Renewable provision
– Contact private companies or employer
Trang 37Disability Insurance (5 of 5)
EXHIBIT 12.3 Determining Stephanie Spratt’s Disability Insurance Needs
Panel A: Total Coverage Needed
= Typical monthly expenses after excluding work expenses $2,000
Panel B: Coverage That You Expect to Receive from:
Trang 38How Health and Disability Insurance Fit
EXHIBIT 12.4 How Health and Disability Insurance Fit Within Stephanie Spratt’s Financial Plan
GOALS FOR HEALTH AND DISABILITY INSURANCE PLANNING
1 Ensure that my exposure to health problems or a disability is covered by insurance.
2 Determine whether I should increase my health and disability insurance in the future.
ANALYSIS
Type of Insurance Protection Status
Health Protects my assets and wealth I have a good health insurance plan
Trang 39How Health and Disability Insurance Fit
EXHIBIT 12.4 How Health and Disability Insurance Fit Within Stephanie Spratt’s Financial Plan
an additional $1,200 of coverage per month to cover my monthly
expenses of $2,000 if I’m disabled The premium charged to me for
disability insurance is only $10 per month The insurance will provide
adequate coverage for me if I become disabled.
Trang 40How Health and Disability Insurance Fit
EXHIBIT 12.4 How Health and Disability Insurance Fit Within Stephanie Spratt’s Financial Plan
Decision on Health and Disability Insurance Coverage for the Future:
I may switch to a PPO someday if I want more flexibility to select
specialists I will consider long-term care insurance in the future I will also increase my disability insurance if my income or expenses increase over time.