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Health Insurance Consumer Health Unit Objectives: - TSWBAT differentiate between types of insurance programs and terms. - TSWBAT analyze which health insurance plan available would best fit the students’ needs.

JUMP STARTER 1. Why do you need health insurance? 1. Why do you need health insurance? 2. What health insurance do you have? 2. What health insurance do you have?

Why do I need health insurance? Preventative  Well visits  Check ups  Immunizations  Testing  Prescriptive Medicine Post  Illness  Injury/ Fractures  Car accidents  Surgery  Rehabilitation

Health Insurance  A person buys insurance and the insurance provider agrees to pay or reimburse for the costs of medical care “Gambling analogy” “Gambling analogy” In 2006, 47 million people in the U.S. (16% of the population) who were without health insurance for at least part of that year In 2006, 47 million people in the U.S. (16% of the population) who were without health insurance for at least part of that year That number keeps RISING each year That number keeps RISING each year

Introduction  What’s the #1 reason young adults end up in bankruptcy? Large, unexpected medical bills from Large, unexpected medical bills from an accidentan accident an illnessan illness Combined with NO health insurance NO health insurance

Why are they uninsured? Why are they uninsured? Insurance costs increase 10%-15% each year Insurance costs increase 10%-15% each year Other debts to pay first Other debts to pay first $20K in college loans$20K in college loans Convoluted lingo Convoluted lingo Procrastination Procrastination Feel invincible Feel invincible

In their own words In their own words  No one is making me pay for health insurance… [someone is] making me pay for rent, cable, and student loans. Insurance is the only thing I can put off for a little while.” Nicole Ross, 21, a recent college graduate Nicole Ross, 21, a recent college graduate  “Right now I have $300 to my name. I ate Ramen noodles today. If you don’t have a job yet, how do you even pay for it?” Andrew Hoffman, a student at Coastal Carolina University Andrew Hoffman, a student at Coastal Carolina University

Do you really need it?  YES!  How much does a broken leg cost? $5,000 - $20,000 $5,000 - $20,000  How much does a serious car accident cost? $50,000 $50,000

History of Health Insurance  Before the development of medical expense insurance, patients were expected to pay all other health care costs out of their own pockets Almost impossible now with the high cost of health care Almost impossible now with the high cost of health care  First Accident insurance offered by: Franklin Health Assurance Company of Massachusetts. Franklin Health Assurance Company of Massachusetts. Founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents Founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents  The first employer-sponsored group disability policy was issued in 1911

Group vs. Individual Insurance  Group Policies – provided by employer you employer pays for all or most of you insurance plans cost you employer pays for all or most of you insurance plans cost  All employees at work have the same health insurance options as you do  Commonly called “benefits”  Individual Policies – you buy the policy yourself Very similar to the way you get car insurance  About 9% of the population gets their health insurance this way

Health Insurance Terms  Provider – provides a health care service  Network – group of hospitals and/or doctors that jointly provide care to a given group of patients covered by health insurance Network

Health Insurance Terms  Major Medical - form of medical insurance designed to supplement a basic medical expense plan in the event of extraordinary medical expenses Major Medical Major Medical Example - extreme illness or disability Example - extreme illness or disability Read paragraph in notes in italic… Read paragraph in notes in italic…

 Covered Expense – something that the insurance plan will pay for  Exclusions –Not all services are covered. The policy- holder is generally expected to pay the full cost of non- covered services out of their own pocket. Read paragraph in notes in italic… Read paragraph in notes in italic… Think John Q Think John Q

Insurance Terms Continued  Pre-existing Condition – Pre-existing Condition Pre-existing Condition A health problem that a person has before they are covered by a certain policy The policy may or may not pay for expenses associated with these conditions The policy may or may not pay for expenses associated with these conditions Read article in italic in notes… Read article in italic in notes…

 Waiting Period – Predetermined amount of time between when your employment begins and when your insurance coverage actually begins Predetermined amount of time between when your employment begins and when your insurance coverage actually begins You are not covered during this time!!! You are not covered during this time!!!

Your Costs  Premium – The amount the policy-holder pays to the health plan each month to purchase health coverage Premium  Deductible – Deductible The amount that the policy-holder must pay out- of-pocket before the health plan pays its share The amount that the policy-holder must pay out- of-pocket before the health plan pays its share Deductible could be yearly or could be per injury / illness Deductible could be yearly or could be per injury / illness Read italic paragraph in notes… Read italic paragraph in notes… Example: Example: Your yearly deductible - $500.00Your yearly deductible - $ Your medical Bill – $2,500.00Your medical Bill – $2, Insurance company pays $2, Insurance company pays $2, You pay $ You pay $500.00

Costs!!  Copayment Copayment The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. Example - Example - a policy-holder might pay a $45 copayment for a doctor's visit, or to obtain a prescription.a policy-holder might pay a $45 copayment for a doctor's visit, or to obtain a prescription. A copayment must be paid each time a particular service is obtained A copayment must be paid each time a particular service is obtained Read italic paragraph in notes… Read italic paragraph in notes…

Managed Care - Organized system of health care services designed to control health care costs - Use of a panel or network of health care providers to provide care to enrollees - Managed care usually involves: - Standards for selecting providers - An emphasis on preventive care - Financial incentives to encourage enrollees to use care efficiently

Two main kinds of Managed Care Insurance Two main kinds of Managed Care Insurance  HMO – Health Maintenance Organization  PPO – Preferred Provider Organization

HMO  Manage patients' health care by reducing unnecessary services  Most HMOs require members to select a primary care physician (PCP) PCP = this physician acts a gatekeeper to medical services PCP = this physician acts a gatekeeper to medical services PCP authorizes referrals to specialists or other doctors if deemed necessary. This is called a “referral.” PCP authorizes referrals to specialists or other doctors if deemed necessary. This is called a “referral.” Emergency medical care does not require prior authorization from a PCP Emergency medical care does not require prior authorization from a PCP

HMOs vs. non-network  Most HMOs will only pay for medical bills for you PCP of for services your PCP approves through referral  HMOs typically provide no coverage for care received from non-network physicians exceptions for emergency care while traveling, etc. exceptions for emergency care while traveling, etc.

HMO Public Image  HMOs often have a negative public image due to their restrictive appearance.  HMOs have been the target of lawsuits claiming that the restrictions of the HMO prevented necessary care  Usually a “cheaper” plan

PPO – Preferred Provider Organization  Organization of medical doctors, hospitals and other health care providers “network” or “preferred provider” “network” or “preferred provider”  Network is contracted with an insurer to provide health care coverage at a reduced rate (substantial discount)  Some surgeries or procedures may need to require pre- approval by the insurance company

PPOs vs. non-network  PPO may reimburse 90 percent of costs for care received within the network, but only 70 percent of costs for non-network care

PPO Public Image  Usually allow more freedom than HMO  Usually a more expensive type of insurance plan  Networks can change  If you choose to get medical care from a provider who is out of network….It costs you more money

CAN YOU NAME THREE DIFFERENCES BETWEEN A PPO AND A HMO?

Fee For Service  You purchase through an insurance agent  You chose doctor – no need for a referral  You pay monthly premium, deductibles, and co-insurance.  Have a “lifetime maximum”

Different Types of Medical Insurance  Hospitalization Insurance- Specifically pays for hospitalization Specifically pays for hospitalization  Surgical Insurance – Specifically pays for fees associated with surgery Specifically pays for fees associated with surgery  Disability Insurance – Pays for loss of income due to accident or illness Pays for loss of income due to accident or illness Usually only a percentage of your salary Usually only a percentage of your salary

Co-Insurance  Instead of paying a fixed amount up front (a copayment), the policy-holder must pay a percentage of the total cost.  Because there is no upper limit on coinsurance, the policy-holder can end up owing very little, or a significant amount, depending on the actual costs of the services they obtain. Example- Example- member might have to pay 20% of the cost of a surgery, while the health plan pays the other 80%.member might have to pay 20% of the cost of a surgery, while the health plan pays the other 80%.

Federal Programs for Health Coverage  Medicaid – health insurance for people with lower incomes health insurance for people with lower incomes Funded by state and federal government Funded by state and federal government Eligibility rule vary state to state Eligibility rule vary state to state Example of Medicaid requirementsExample of Medicaid requirements You're a pregnant woman who meets income requirements. For example, a family of four making $23,225 a year or less qualifies. You're a pregnant woman who meets income requirements. For example, a family of four making $23,225 a year or less qualifies. Your family's assets are less than $2,000 Your family's assets are less than $2,000

Federal Programs for Health Coverage  Medicare – Government health coverage for people 65 years or older Government health coverage for people 65 years or older In many cases Medicare pays a portion of the person’s health care cost. In many cases Medicare pays a portion of the person’s health care cost. The rest is paid by the person or supplemental insurance plan The rest is paid by the person or supplemental insurance plan

WICWIC – Government Program WIC  Women Infants and Children  Program that helps mothers and children with medical bills Prenatal care Prenatal care Preventive screenings Preventive screenings Immunizations Immunizations Pay for “proper” food and medicines Pay for “proper” food and medicines

Federal Programs for Health Coverage  COBRA Consolidated Omnibus Budget Reconciliation Act (1985) Consolidated Omnibus Budget Reconciliation Act (1985) Lose your job - may continue to pay your insurance premium & maintain coverage Lose your job - may continue to pay your insurance premium & maintain coverage This also applies to children on insured employees This also applies to children on insured employees If a child somehow loses full-time student status that child may make a COBRA payment to maintain coverageIf a child somehow loses full-time student status that child may make a COBRA payment to maintain coverage

Rankings…  U.S. ranks: 22 nd - infant mortality 22 nd - infant mortality 46 th - life expectancy 46 th - life expectancy 37 th - health system performance, between Costa Rica and Slovenia 37 th - health system performance, between Costa Rica and Slovenia

Bad system or Broken System?  In a 2007 comparison by the Commonwealth Fund of health care: Commonwealth FundCommonwealth Fund USA, Germany, Britain, Australia, New Zealand, and Canada USA, Germany, Britain, Australia, New Zealand, and Canada USA ranked last on measures of quality, access, efficiency, equity, and outcomes USA ranked last on measures of quality, access, efficiency, equity, and outcomes  30% of U.S. health care dollars, or more than $1,000 per person per year, went to health care administrative costs

Single Payer System  National Health Care / Universal Health Care  Centrally controlled heath care system (government) – pay higher taxes  Sometime requires supplemental health insurance

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