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

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

Handling Risk Individuals handle risk in three ways: 1.Prepare to bear the costs themselves. 2.Use safety and avoidance measures to try to avoid costly incidents. 3.Transfer risks to another party by purchasing insurance policies.

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.

Types of Coverage  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

Vision Insurance Dental Insurance Medical Benefits Major Medical

Types of Coverage  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.

Disability Insurance Long-Term Care Insurance Accident InsuranceMedigap Insurance

Government Programs Medicare  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 Medicaid  State and federal governments share the cost to pay certain medical bills for low-income persons

Government Programs Children’s Hospital Insurance Programs (CHIP)  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. 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.

Non- Government Programs Health Maintenance Organization (HMO)  A health care group that provides health care services to members for a set fee and a small co-pay. 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 Point of Service (POS)  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. 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  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.

Seek the plan whose features best meets your needs  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  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.

Choosing a Health Care Plan  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