Health Insurance Types of Coverage Medical Basic medical coverage helps pay doctors’ fees, medical tests, hospitalization, and surgery. Medications might also be covered. Basic medical is usually combined with major medical coverage, which helps pay for very expensive treatment such as long term rehabilitation, organ transplants, or sophisticated cancer therapies.

Health Insurance Types of Coverage Dental Dental expenses are not usually included in a regular health care plan. Sometimes they can be added for a higher premium. Sometimes you would have to purchase a separate policy.

Dental coverage would apply to the cost of fillings, crowns, and similar procedures. Preventive dental care such as periodic checkups, teeth cleaning, and X rays is often included for a higher premium. Some plans also cover orthodontic care such as braces.

Health Insurance Types of Coverage Vision Vision expenses are not usually not included in a regular health care plan. Vision coverage helps pay for eye examinations, glasses, and contact lenses. Vision correction surgery is often included. Treatment of eye injuries is covered under major medical insurance on many policies.

Health Insurance Types of Coverage Disability Protection is usually not covered in a regular health care plan.

Health Insurance Types of Coverage Long-term care Long term care is usually not covered in a regular health care plan. Coverage for long term care is meant to help pay for extended nursing care that is not covered by medical plans, including Medicare. When a person is unable to care for themselves and needs someone to provide care in the home or in a nursing home, long term care can be very important.

Health Insurance Understanding Costs Premium The premium is the amount you pay to the insurance company for your policy. For health coverage, premiums increase as you get older. Premiums are also higher if you have other risk factors that increase the likelihood of claims.

Deductible Many policies have a deductible. This is a set amount that you pay toward your yearly expenses before your insurance coverage kicks in. Deductible amounts range from $100 to thousands of dollars, depending on the policy.

Coinsurance With some policies, after you meet your deductible you still pay part of each medical bill. Coinsurance, usually expressed as a percentage, indicates how you and the insurance company will share the charges. If your coinsurance is 20 percent, you would pay 20 percent of the hospital bill and the insurance company would pay 80 percent.

Copay When policies have a copay, you pay a flat dollar amount each time you go to a doctor, have a medical test or treatment, or buy a prescription drug. The insurance company pays the rest. In policies with a deductible, the copay begins after the deductible is met.

Out of pocket expenses The amounts that you pay for coverage are called your out of pocket expenses. They include your premiums plus any deductibles, coinsurance, and copays

Health Insurance Sources of Health Insurance Group – many are employer-sponsored Several types of health care coverage might be offered, such as medical, dental, vision, and perhaps even disability. Usually once a year, employees can choose which plan or plans they want to enroll in.

COBRA COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act. It is a federal law that requires employers to let workers temporarily continue with their health insurance plan after leaving the company, usually for up to 18 months. While on COBRA coverage, the former employee pays the entire premium for the policy, which is significantly higher than before, when the employer was paying part of the cost.

Some applications for individual policies are denied. Health Insurance Sources of Health Insurance Individual – Coverage may be denied for preexisting conditions – Short-term policies can fill the gap between jobs

Health Insurance Sources of Health Insurance Group – employer-sponsored Individual Government – Medicare – Medicaid – State-run programs – Workers’ compensation

What do we call the amount you have to pay on yearly health costs before the insurance company begins to pay? A.Deductible B.Co-payment C.PIP D.Annuity E.PPO

What do we call the amount you have to pay on yearly health costs before the insurance company begins to pay? A.Deductible B.Co-payment C.PIP D.Annuity E.PPO

Health Insurance Types of Health Insurance Traditional Any Health Care Provider

Health Insurance Types of Health Insurance Traditional Managed care – HMO – PPO – POS In-Network Doctors and Specialists

Health Insurance Evaluate Health Insurance How much are premiums? What is covered? Can I choose providers? Are preexisting conditions covered? What are co-pay and coinsurance costs? Is there a maximum out-of-pocket each year? Are there maximum lifetime benefits?

Health Insurance Other Options Health savings account (HSA) Flexible spending accounts (FSA) Discount health plans

Health Insurance Disability and Long-Term Care Disability insurance – Short-term vs. long-term – Social Security – Workers’ compensation – Individual supplement

Health Insurance Disability and Long-Term Care Long-term care insurance – Do you need it?

What do you think? Discussion © EMC Publishing, LLC Should the federal government stop insurance companies from denying preexisting condition coverage? Explain. Why does managed care cost less? What are drawbacks to managed care? Advantages? Should we have national health insurance? Explain.

Life Insurance Why Buy It? Pay off debts Provide income to spouse / dependents (beneficiaries) Provide education for children Make charitable donations

Life Insurance Types of Life Insurance Term – Set period of time Permanent (whole) – Entire life

What do we call the person who receives the payment of a life insurance policy? A.Benefactor B.Premier C.Administrator D.Beneficiary E.Sponsor

What do we call the person who receives the payment of a life insurance policy? A.Benefactor B.Premier C.Administrator D.Beneficiary E.Sponsor

Life Insurance Sources of Life Insurance Employer – Fully funded – Partially funded Individual

Life Insurance Determining Premiums Actuarial tables

Life Insurance Determining Premiums Actuarial tables Individual lifestyles – Occupation / hobbies – Smoking / alcohol use – Medical conditions May be denied insurance

Life Insurance Evaluating Life Insurance Term – Less expensive when younger – Less coverage when older

Life Insurance Evaluating Life Insurance Term – Less expensive when younger – Less coverage as age Whole – Investment – Coverage does not change with age

Life Insurance Evaluating Life Insurance How much do you need?

Life Insurance Annuities Payments after you retire

Which of the following would most likely lower your life insurance premium? A.You quit smoking. B.You take up race car driving. C.You find out you have a serious chronic disease. D.The life expectancy average falls. E.All of these would likely lower your premium.

Which of the following would most likely lower your life insurance premium? A.You quit smoking. B.You take up race car driving. C.You find out you have a serious chronic disease. D.The life expectancy average falls. E.All of these would likely lower your premium.

What do you think? Discussion © EMC Publishing, LLC “The chief beneficiary of life insurance policies for young, single people is the life insurance agent” (Wes Smith). What does this quotation mean? When should you carry the most life insurance? Is term or whole life insurance a better choice? Why?