Medical Insurance Copyright © Texas Education Agency, All rights reserved. 19

The Importance of Medical Insurance  Medical insurance provides payment to cover financial loss as a result of illness or injury. Copyright © Texas Education Agency, All rights reserved. 21

Sources of Medical Insurance  1) Two Government Programs  Medicare for individuals over 65 years of age or disabled individuals who qualify for social security  Medicaid-for low-income individuals that covers blind, disabled and needy families with dependent children  2) Employer-provided insurance where there is a group plan and the employer covers some or most of the cost  3) Private insurance where a person purchases health insurance through a private company Copyright © Texas Education Agency, All rights reserved.

Indemnity Plans versus Managed Care  Indemnity plans allow participants to seek health care from any qualified medical provider  Managed care plans limit participants to a specific list of providers Copyright © Texas Education Agency, All rights reserved. 22

Group Plans  Group plans cover a large group of individuals, such as all the employees of a particular company or local government.  Within a group, individuals’risk is spread across the entire pool of members. Copyright © Texas Education Agency, All rights reserved. 24

Pre-existing Conditions  Insurance policies may exclude coverage for pre- existing conditions or health conditions that existed before the policy was granted. Copyright © Texas Education Agency, All rights reserved. 26

Premium  Premium is an amount paid periodically to the insurer by the insured for covering his risk.  You and/or your employer usually pay it monthly, quarterly or yearly. Copyright © Texas Education Agency, All rights reserved.

Deductibles  The amount you owe for covered health care services before your health insurance or plan begins to pay.  Many policies limit the total amount they will pay for some procedures  Some companies cover only certain drugs or provide partial payment for unapproved drugs  Many policies have a co-pay, where the policyholder pays a set amount for a doctor visit or emergency room visit Copyright © Texas Education Agency, All rights reserved. 27

Or there’s coinsurance  Coinsurance- Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service  You pay coinsurance plus any deductibles you owe.  Ex/ a $100 office visit, your coinsurance =20% so you pay $20 and the insurance co. pays the rest. Copyright © Texas Education Agency, All rights reserved.

Provider Networks  Two most common networks  Health Maintenance Organizations (HMO’s)  Preferred Provider Organizations (PPO’s) Copyright © Texas Education Agency, All rights reserved. Both HMO’s and PPO’s provide a list of providers. HMO’s usually provide a more limited list. 28

Comparison of Insurance Plans Type of Health PlanPremiumSelection of Physician Indemnity PlanHighFlexibility to select a physician or specialist Managed Care HMO Relatively lowPrimary care physician refers the patient to specialist Managed Care PPO Low, but usually higher than HMO Greater number of physicians to choose from with PPO’s than HMO’s Copyright © Texas Education Agency, All rights reserved. 29

Disability Insurance The ability to earn a living is one of your most valuable assets. Disability insurance covers your wages if you are in an accident or too ill to work for an extended period of time. Copyright © Texas Education Agency, All rights reserved. 31

Questions? Copyright © Texas Education Agency, All rights reserved. 36