1. Chapter 9 Health and Disability Income Insurance McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Health and Disability Income Insurance Chapter Objectives
Recognize the importance of health insurance in financial planning.
Analyze the costs and benefits of various types of health insurance coverage as well as major provisions in health insurance policies.
Assess the trade-offs of different health insurance plans.
Evaluate the differences among health care plans offered by private companies and by the government.
Explain the importance of disability income insurance in financial planning and identify its sources.
Explain why the costs of health insurance and health care have been increasing.
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3. Objective 1 Recognize the Importance of Health Insurance in Financial Planning
Eases the financial burden people may experience as a result of illness or injury
Includes:
Medical expense insurance
Disability income insurance
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4. Health Insurance Group Plans: The Health Insurance Portability and
Accountability Act of 1996:
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5. Health Insurance Group Policy Supplements Individual Health Insurance
COBRA
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6. Types of Health Insurance Coverage
Objective 2 Analyze the Costs and Benefits of Various Types of Health Insurance Coverage as well as Major Provisions in Health Insurance Policies
Types of Health Insurance Coverage
Basic
Major medical
Both
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7. Types of Health Insurance Coverage
Basic Health Insurance
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8. Types of Health Insurance Coverage
Major medical expense insurance
Comprehensive major medical insurance
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9. Types of Health Insurance Coverage
Hospital indemnity
Dental expense insurance
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10. Types of Health Insurance Coverage
Vision care
Dread disease policies
Long term care insurance
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11. Major Provisions in a Health Insurance Policy
Eligibility
Assigned benefits
Internal limits
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12. Major Provisions in a Health Insurance Policy
Copayment
Service benefits
Benefit limits
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13. Major Provisions in a Health Insurance Policy
Exclusions and limitations
Guaranteed renewable
Cancellation and termination
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14. Objective 3 Assess the Trade-offs of Different Health Insurance Plans
Trade-Offs in Choosing a Policy
Reimbursement versus indemnity
Reimbursement pays actual costs
Indemnity pays specific amounts
Internal limits versus aggregate limits
Deductibles and coinsurance
Out-of-pocket limit
Benefits based on reasonable and customary charges
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15. Health Insurance Must-Haves
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16. Objective 4 Evaluate the Differences Among Health Care Plans Offered by Private Companies and by the Government
Private Health Care Plans
Private Insurance Companies
Individual policy
Group policy sold to an employer
Hospital and Medical Service Plans
Blue Cross = hospital care
Blue Shield = surgical and medical services
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17. Private Health Care Plans
Health Maintenance Organization (HMO)
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18. Private Health Care Plans
Preferred Provider Organization (PPO)
Point-of-Service (POS)
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19. Private Health Care Plans
Home Health Care Agencies
Employer Self-Funded Health Plans
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20. New Health Care Accounts
Health Spending Accounts (HSA)
Health Reimbursement Accounts (HRA)
Flexible Spending Accounts (FSA)
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21. Government Health Care Programs
Medicare
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22. MEDICARE
Part A:
Hospital insurance
Part B:
Medical insurance
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23. MEDICARE Part C: Part D:
Medicare Advantage plans available in many areas
Part D:
Prescription drug coverage
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24. MEDICARE
Medicare Choice
Medigap (MedSup)
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25. Government Consumer Health Information Websites
Healthfinder
Medline Plus
NIH Health Information Page
FDA
Medicare
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26. Disability Income Insurance
Objective 5 Explain the Importance of Disability Income Insurance in Financial Planning and Identify its Sources
Disability Income Insurance
Originally designed to protect against loss of income
Young, healthy people don’t consider the risks related to their future earning potential
Provides regular cash income lost by employees as the result of an accident or illness
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27. Sources of Disability Income
Workman’s Compensation
Employer Plans
Social Security
Private Income Insurance Programs
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28. Disability Income Insurance Trade-Offs
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29. Objective 6 Explain Why the Costs of Health Insurance and Health Care have been Increasing
2009 Health care costs ≈ $2.56 trillion
U.S. has highest per capita health care cost of any country in the world.
Rapid increase in medical expenditures
16.9% of GDP in 2009
High administrative costs
Admin = 26% of health care costs
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30. Reasons for High Health Care Costs
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31. What is Being Done About the High Costs of Health Care?
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32. What Can You Do to Reduce Personal Health Care Costs ?
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