1. Health, Disability and Life Insurance
Chapter 14
Health, Disability and Life Insurance

2. Costs of going to the hospital
Cost of having a child?
$ $11,000
Ambulance Ride
$500 - $1000
Average cost of someone staying in the hospital…
$21,000
Average cost of paying medical insurance without help of job.
$370 per month or about $4500 per year.
Family of 4 almost $13,000 per year.

3. Health Insurance and what does it mean?
Health insurance is a form of protection that eases the financial burden people may experience as a result of illness or injury.
2 subsets of health insurance
Medical expense insurance
Pays for the actual medical cost
Disability income insurance.
If you lose your job and have no medical coverage. You can stay on the plan, but have to pay for it individually.

4. Type of health insurance
Group Health
Many employees are grouped under the same plan so cost is fairly low.
Individual Health Plans
Self-employed people have these, not covered under a group plan.
Can meet special needs.
COBRA
Consolidated Omnibus Budget Reconciliation Act
If an employee looses their job they are covered for a set period of time.
Usually private companies or state or local government are eligible for these benefits.

5. Basic Health Coverage 3 basic types of coverage's Hospital Expenses
Pay for some or all of the costs of room and board during the hospital stay. Routine nursing care, minor medical supplies. Usually have a number of set days that the policy will cover. Usually also a deductable.
Surgical Expenses
Covers all or part of the surgical fees for an operations.
Policies have a list of the total amount that the policy will cover and you have to pay the rest.
For example a appendectomy may be $1000 and your policy only covers $500 so you have to pay $500

6. Physician Expenses
Meets some or all of the costs of a physician care that do not involve surgery.
Physician expense coverage is usually combined with surgical and hospital coverage in a basic health insurance package.

7. Major medical expense insurance.
Coinsurance – is the percentage of the medical expenses the policyholder must pay in addition to the deductible amounts.
Usually 20% to 25% of expense after they have paid the deductible.

8. Stop- Loss Provisions
Is a provision that requires the policyholder to pay all costs up to a certain amount, after which the insurance company pays 100 percent of the remaining expenses covered in the policy.

9. Comprehensive major Medical
Is a type of complete health insurance that helps pay hospital, surgical, medical and other bills.

10. Hospital Indemnity Policy
A hospital indemnity policy pays benefits when you are hospitalized.
Used to supplement – not replace basic health insurance or major medial insurance policies

11. Dental Expense Insurance
Covers many different types of surgical, and examinations for the mouth.
Does not usually cover alternative surgeries.
Teeth whitening ex….

12. Dread Disease Care
Dread Disease, trip accident, death insurance, and cancer policies are usually sold through the mail, and are illegal in some states.
Usually pick on the elderly in a scare type of tactic.

13. Long-term care insurance
It covers a lengthy stay in a nursing home and help at home with daily activities such as dressing, bathing, and household chores.
Premiums can range from $900 to $15,000 depending no age and amount of coverage.
Sending your grandparents or parents to a nursing home can range $60,000 to $100,000 per year.

14. Health insurance trade-offs
Reimbursement vs. Indemnity
Reimbursement policy – is a policy that pays you back for actual expenses
Indemnity policy – pays specified amounts, regardless of how much the actual expenses may cost.
EXAMPLE
Two people go the doctor
1st person has a reimbursement policy – this person has to pay the deductable then the rest is covered for that year.
2nd has a indemnity policy – this person has to pay a certain amount each time.

15. Health Insurance trade-off (con’t)
Internal Limits vs. Aggregate Limits
A policy with internal limits covers only a fixed amount for an expense, such as the daily cost of room and board during a hospital stay.
A policy with aggregate limits may limit only the total amount of coverage (the maximum dollar amount paid for all benefits in a year) such as $1 million in major expense benefits, or it may have not limits at all.

16. Health Insurance trade-off (last page)
Deductibles and Coinsurance
The cost of a health insurance policy is affected by the size of the deductible, which is the set amount that the policyholder must pay toward medical expenses before the insurance company pays benefits.

17. Private and Government Plans
Section 14.2

18. Terms that you hear everyday….
HMO
PPO
Blue Cross/Blue Shield
Medicaid
Medicare

19. Health Insurance Companies
Private Insurance Companies
Provide group health plans to companies
Premiums may be paid fully or partially by employer and balance is paid to the employee
Parkway School District has a Private Insurance company.

20. Health Insurance Companies
Hospital and Medical Service Plans
BLUE CROSS/ BLUE SHIELD
Blue Cross – is an insurance company that provides hospital care benefits.
Blue Shield – is an insurance company that provides surgical and medical services performed by physicians.

21. Managed Care
A plan that directly employs or contracts with selected or preapproved, physician and other medical professionals to provide health care services in exchange for fixed, prepaid monthly premiums.
Based on the idea for preventive care
Pay a small co-payment
Must attend your selected doctor – unless it is an emergency
HMO – Health Maintenance organization