1. Health Insurance Plans Unit 2.4 Dr. Hale
Medical Technologies
Jr. Program

2. Introduction
Cost of health care is a major concern of everyone who needs health services
Statistics show cost of health care is over 15 percent of the gross national product
Health care costs are increasing much faster than other costs of living

4. 4. Most people rely on health insurance plans to pay for health care costs
5. Without insurance, the cost of an illness can become a financial disaster
6. Many different types of plans are available

5. Health Insurance Plans
1. Offered by thousands of insurance agencies
2. Common example is Blue Cross – Blue Shield
3. Premium or payment is made to insurance company
4. If insured individual has expenses covered by the plan, the insurance company pays for the services
5. Amount of payment and services covered vary from plan to plan

6. 6. Insurance terminology
a. Deductibles: amounts that must be paid by the insured individual for medical services before the policy begins to pay
b. Co-insurance: requires that specific percentages of expenses are shared by individual and company

7. 1) 80 – 20 percent co-insurance: company pays 80%, insured pays 20%

8. C. Co-payment
1) Specific amount of money patient pays for a particular service
2) Example: $10 for each physician visit regardless of total cost of visit

9. 8. Many individuals have insurance from place of employment
a. At times, employer pays entire cost of plan
b. At other times, cost is shared by employer and employee
9. Private policies can also be purchased by individuals

10. Health Maintenance Organizations
1. Special type of health insurance plan that provides a managed care plan for the delivery of health care services
2. Monthly fee or premium is paid for membership, and the fee stays the same regardless of the amount of health care used
3. Premium can be paid by employer and/or individual

11. 4. Most pay for total health care including routine examinations and preventive type health care, not usually covered under other plans
5. Advantages: provides ready access to health care, early detection and treatment of disease; individual usually maintains a better state of health

12. 6. Disadvantages: individual can use only HMO affiliated health care providers (doctors, labs, hospitals) for health care; if individual care chooses a nonaffiliated health care provider, the individual must pay for the care

13. Preferred Provider Organizations
1. Another type of managed care insurance plan
2. Usually provided by large industry or company
3. PPO contracts with certain health care agencies
4. Employee restricted to using the specific health care agencies

14. 5. Industry/company using the PPO can provide health care at lower rates 6. PPOs usually require a deductible and a copayment 7. If an enrollee uses a non-affiliated provider, the PPO may require copayments of 40 to 60 percent

15. Medicare 1. Federal government health care plan
2. Provides health care to following individuals
a. Over the age of 65
b. Persons with a disability who have had social security benefits for at least two years
c. Any person with end-stage renal disease

16. 3. Three types of coverage
a. Type A
1) Covers hospital services
2) Covers care by extended care facility or home-health care agency after hospitalization
3) Covers hospice care for people with a terminal illness

17. b. Type B
1) Coverage for doctor’s services, outpatient treatments, therapy, and other health care
2) Individual pays premium for this coverage
3) percent co-insurance: Medicare pays 80% of approved costs and individual pays remaining 20% or has other policy to cover the 20%
c. Type D: assists with pharmaceutical expenses

18. Medigap Policies
1.Health insurance plans that help pay expenses not covered by Medicare 2.Policies are offered by private insurance companies and require the payment of a premium by the enrollee 3.Medigap policies must meet specific federal guidelines 4.Provide options that allow enrollees to choose how much coverage they want to purchase

19. Medicaid
1. Medical assistance program that is jointly funded by the federal government and state government but operated by individual states
2. Benefits and individuals covered vary from state to state because each state has the right to establish its own eligibility standards, determine the type and scope of services, set the rate of payment for services, and administer its own program

21. 3. Usually covers individuals with low incomes, children who qualify for public assistance, and individuals who are physically disabled or blind 4. Generally, all state Medicaid programs provide hospital services, physician’s care, long term care services, and some therapies 5. Some states provide dental care, eye care, and other specialized services

22. 6. State Children’s Health Insurance Program (SCHIP) a
6.State Children’s Health Insurance Program (SCHIP) a. Established in 1997 to provide health care to uninsured children of working families who earn too little to afford private insurance but too much to be eligible for Medicaid b. Provides inpatient and outpatient hospital services, physician’s surgical and medical care, laboratory and X-ray tests, and well baby and well child care, including immunizations

23. Worker’s Compensation
1. Provides treatment for workers injured on the job
2. Administered by the state
3. Payments made by employers and the state
4. Provides payment for health care and lost wages

24. United States government plans
1. Provide health care for all military personnel
2. TRICARE, formerly called CHAMPUS (Civilian Health and Medical Programs for the Uniform Services
a. Care for all active duty members and their families
b. Care for survivors of military personnel and retired members of the Armed Forces
3. Veterans Administration provides for military veterans

25. Managed Care 1. Developed because of the rising cost of health care
2. Employers and insurance companies want to see that money is spent efficiently, rather than wastefully
3. Principle is that all health care provided to a patient must have a purpose
4. Second opinion or verification of need is frequently required

26. 5. Every effort is made to provide preventive care and early diagnosis of disease
6. Usually provides routine physical examinations, well baby care, immunizations, and wellness education to promote good nutrition, exercise, weight control, and health living practices

27. 7. Employers and insurance companies create a network of doctors, specialists, therapists, and health care facilities that will provide care at the most reasonable cost

28. a. HMOs and PPOs (Preferred Provider Organization) are the main providers
b. Private insurance companies are also setting up health care networks to provide care
c. As these networks compete for the consumer dollar, they are required to provide quality care at lowest possible cost

29. 8. Health care consumer receives quality care at the most reasonable cost, but is restricted in choice of health care providers

30. Health Insurance Portability and Accountability Act (HIPAA)
1.As the cost of insurance increases, many employers are less willing to offer health care insurance 2.Individuals with chronic illnesses often find they cannot obtain insurance coverage if their place of employment changes 3.One reason the federal government passed HIPAA in 1996

31. 4.Five main components of HIPPA
a. Health care access, portability, and renewability
1) Limits exclusions on preexisting conditions to allow for the continuance of insurance even with job changes
2) Prohibits discrimination against an enrollee or beneficiary based on health status

32. 3) Guarantees renewability in multiemployer plans 4) Provides special enrollment rights for individuals who lose insurance coverage in certain situations, such as divorce or termination of employment

33. b.Preventing health care fraud and abuse, administrative simplification, and medical liability reform 1) Establishes methods for preventing fraud and abuse and sanctions or penalties if fraud or abuse occur

34. 2)Reduces the costs and administration of health care by adopting a single set of electronic standards to replace the wide variety of formats used in health care 3)Provides strict guidelines for maintaining the confidentiality of health care information and the security of health care records 4)Recommends limits for medical liability

35. c.Tax related health provisions 1) Promotes the use of medial savings accounts (MSAs) by allowing tax deductions for monies placed in the accounts 2) Establishes standards for long term care insurance 3) Allows for the creation of state insurance pools 4) Provides tax benefits for some health care expenses

36. d.Application and enforcement of group health plan requirements: establishes standards that require group health care plans to offer portability, access, and renewability to all members of the group e.Revenue offsets: provides changes to the Internal Revenue Code for HIPAA expenses

37. 6.Regulations have not solved all problems of health care insurance, but they have provided consumers with more access to insurance and greater confidentiality in regards to medical records

38. 7.Standardization of electronic health care records, reductions in administrative costs, increased tax benefits, and decreasing fraud and abuse in health care have reduced health care costs for everyone

39. Summary
1.Health insurance plans do not solve all the problems of health care costs 2.Do help many people pay for all or part of cost 3.Important for individuals to understand what plan covers 4.Also need understanding of coinsurance and other restrictions plans may have