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

2. What is Health Insurance?
Form of protection that eases the financial burden people may experience as a result of illness or injury
Coinsurance- percentage of medical expenses the policyholder must pay in addition to the deductible amount
Stop-loss provision- requires policyholder to pay all costs up to a certain amount, after which the insurance company pays 100% of the remaining expenses covered in the policy
Things covered: hospital stays, doctors’ visits, medications, & sometimes vision or dental care.
20-25% of expenses are paid by policyholders after they have paid the deductible.

3. Co-payment
Flat fee that you pay every time you receive a covered service
Managed care- prepaid health plans that provide comprehensive health care to their members
Blue cross/Blue Shield- statewide organizations that provide hospital care benefits as well as surgical & medical services performed by physicians.
Fee is usually between $5 & $20. and the insurer pays the balance of the cost of the service.
23% of employed Americans are enrolled in some form of managed care, due to rising health care costs.

4. Health Maintenance Organizations (HMO)
Health insurance plan that directly employs or contracts with selected or preapproved physicians to provide health care services in exchange for a fixed, prepaid monthly premium
Preferred provider organization (PPO)- group of doctors & hospitals that agree to provide specified medical services to members at prearranged fees
Point-of-service (POS) plan- combined features of HMO’s & PPO’s
ex. Of preventive services: routine immunizations & checkups, screening programs, & diagnostic tests
PPOs allow members greater flexibility…members can either visit a preferred provider (selected from pre-approved list) or go to their own physician. Patients who decide to use their own doctors do not lose coverage as they would with an HMO. However, they must pay deductibles & larger co-payments.

5. Medicare
Federally funded health insurance program available to people over 65 and to people with certain disabilities
Two parts
Hospital insurance
Medical insurance
Medicaid- medical insurance program offered to certain low-income individuals & families.
Financial risk…health care costs continue to grow, & the population of senior citizens in the U.S. is increasing. This situation puts Medicare in danger of running out of funds. The program may be bankrupt by the year 2019 if no changes are made.
Part a is funded by part of the Social Security payroll tax.
Part B helps pay for doctors’ services & a variety of other medical services & supplies not covered by part A.

6. Disability income insurance
Provides regular cash income when an employee is unable to work due to pregnancy, a non-work-related accident, or an illness
Life insurance
Beneficiary- person named to receive the benefits from an insurance policy
Types:
Term
Whole life
Term – protects against loss of life for a period of time
Whole life – permanent policy for which you pay a specified premium each year for the rest of your life.