Health InsuranceConsumer 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.

Can you name some carriers/companies???

http://www.healthinsurancesort.com/carrier-list.htm

Health Insurance

A person buys insurance and the insurance provider agrees to pay or reimburse for the costs of medical care “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

Introduction

What’s the #1 reason young adults end up in bankruptcy? Large, unexpected medical bills from

• an accident• an illness

Combined with NO health insurance

Why are they uninsured? Insurance costs increase

10%-15% each year Other debts to pay first

• $20K in college loans Convoluted lingo Procrastination Feel invincible

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

“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

Do you really need it?

YES! How much does a broken leg cost?

$5,000 - $20,000

How much does a serious car accident cost? $50,000

History of Health Insurance Before 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

Accident insurance Franklin Health Assurance Company of

Massachusetts. 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

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

Health Insurance Terms Major Medical - form of medical insurance

designed to supplement a basic medical expense plan in the event of extraordinary medical expenses

Example - extreme illness or disability

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.

Insurance Terms Continued 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

Waiting Period – Predetermined amount of time between when

your employment begins and when your insurance coverage actually begins

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 Deductible –

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

Example: • Your yearly deductible - $500.00• Your medical Bill – $2,500.00

Insurance company pays $2,000.00 You pay $500.00

Costs!!

Copayment The amount that the policy-holder must pay

out of pocket before the health plan pays for a particular visit or service.

Example - • 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

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

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 = physician acts as a gatekeeper to

medical services 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

HMO’s vs. non-network Most HMO’s will only pay for medical bills

or services that your PCP approves through referral

HMOs typically provide no coverage for care received from non-network physicians 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 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

PPO’s 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 choose a 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

Surgical Insurance – Specifically pays for fees associated with

surgery Disability Insurance –

Pays for loss of income due to accident or illness

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-

• 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 Funded by state and federal government Eligibility rule vary state to state

• Example 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.

Your family's assets are less than $2,000

Federal Programs for Health Coverage

Medicare – Government health coverage for people 65

years or older 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

WIC – Government Program

Women Infants and Children Program that helps mothers and children

with medical bills Prenatal care Preventive screenings Immunizations Pay for “proper” food and medicines

Federal Programs for Health Coverage

COBRA Consolidated Omnibus Budget Reconciliation

Act (1985) Lose your job - may continue to pay your

insurance premium & maintain coverage 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 coverage

Rankings…

U.S. ranks: 22nd - infant mortality 46th - life expectancy 37th - health system

performance, between Costa Rica and Slovenia

Bad system or Broken System? In a 2007 comparison by the

Commonwealth Fund of health care: USA, Germany, Britain, Australia, New Zealand, and

Canada 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

Sicko

http://www.youtube.com/watch?v=xlDAUKSh9CQ