Standard 7.01
Classify types of health insurance and features of types of
coverage.
Essential
Questions
 What are the types of health insurance and things to consider
when selecting options?
Handling Risk
Individuals
handle risk in
three ways:
1.
Prepare to bear the costs themselves.
2.
Use safety and avoidance measures to try to avoid costly
incidents.
3.
Transfer risks to another party by purchasing insurance policies.
Insurance is a risk-management
technique, an arrangement in
which an insured pays money to
an insurer to gain protection
against risks and compensation
for loses.
 Medical benefits
 Pay a large part of hospital and surgical care, may also pay part of
some other medical expenses (doctor’s visits)
 Major Medical
Types of
Coverage
 Pays for long-term illness expenses after basic medical benefits
limits have been reached (cancer)
 Dental Insurance
 Covers all/part of routine services (examination cleanings, Xrays) and
some other procedures
 Vision Benefits
 May cover all or part of eye examinations, glasess, and contact lens
Major Medical
Medical Benefits
Dental Insurance
Vision Insurance
 Disability Insurance
 Supplies all/part of a worker’s pay if unable to work due to illness or
injury.
 Short term vs. Long Term
 Often a waiting period before payments begin
 Long-term care insurance
Types of
Coverage
 Intended to cover the costs of extended home nursing care and
related expenses which are not covered by regular medical benefits
 Accident Insurance
 Covers costs from injuries that occur at an eligible location and/or
time.
 Large group rates keep costs low, but do not cover illness.
 Medigap Insurance
 Private insurance available to citizens 65 and older who have
Medicare A and B plans.
 Covers the cost of co-payments and deductibles.
Accident Insurance
Disability Insurance
Medigap Insurance
Long-Term Care Insurance
Medicare
Government
Programs
 The federal government pays
some of the medical
expenses of the elderly, ages
65 and over, and for some
people with disabilities.
 Client can choose managed
Medicare called “Medicare
Advantage” or get fee-for
service
Medicaid
 State and federal
governments share the cost
to pay certain medical bills
for low-income persons
Children’s Hospital Insurance
Programs (CHIP)
Government
Programs
 Health insurance for children
under eighteen whose
parents earn too much to
qualify for Medicaid, but not
enough to buy private
insurance.
 Federal funds are distributed
by state programs to cover
costs.
COBRA
 Consolidated Omnibus
Budget Reconciliation Act
 Gives the right to pay one’s
own premiums and continue
employer-sponsored group
health insurance plan for a
limited time after leaving a
job.
NonGovernment
Programs
Health Maintenance
Organization (HMO)
Preferred Provider
Organization (PPO)
 A health care group that
provides health care services
to members for a set fee and
a small co-pay.
 An agreement between
health providers with
employers or insurers to
provide services at a reduced
rate to employees.
Point of Service (POS)
NonGovernment
Programs
 Members use a primary
physician who refers them as
needed to participating
specialist or members can
see non-participating health
providers.
 But, members pay more to
use non-participating health
providers.
Fee for Services plan
 A plan in which an insured
can select his/her own
doctors and hospitals, pay
costs at time of visit, and file
form with insurance
company for reimbursement
of covered expenses.
 Health Savings Account
NonGovernment
Programs
 Employer-sponsored plan where monies are automatically
deposited before taxes into a savings account to cover predicted
medical, dental, vision, and child care expenses for a twelve month
period.
 Monies not spent within the year are transferred to the savings
account provider.
 Co-payments
 The percentage of costs you pay once the deductible is met
 Deductible
Seek the plan
whose
features best
meets your
needs
 The amount of medical expenses you pay each term (usually one
year) before insurance will cover any expenses.
 The higher the deductible the lower the premiums
 Pre-existing conditions
 Expenses that are not covered because they existed when coverage
began
 E.g. pregnancy expenses for 10 months after the policy goes into
effect
 Maximum benefit
 The maximum dollar amount the insurance company will pay over
the term and/or a lifetime.
 Chiropractic care often has a term limit and cancer expenses often
have a lifetime limit.
 Open enrollment period
 The period of time during which a person whose is eligible has to
consider their options before enrolling without cost increases or
exclusions.
Seek the plan
whose
features best
meets your
needs
 Preauthorization
 Insurance approval is required in advance for expensive and/or
extensive tests, treatments, and/or surgery.
 Exclusions
 Items that the insurance policy will not cover
 E.g. cosmetic surgery, teen pregnancy, new treatments that do not
yet have FDA approval
 Renewability
 What extenuating circumstances would cause the insurance
company to not renew your policy at the end of the policy contract
period.
 Review several policies to determine exclusions and deductibles
Choosing a
Health Care
Plan
 Consider the costs
 Ask advice from others who have used the plan
 Consider services that may/may not be covered
 Office visits, medical tests, maternity care, physical therapy,
outpatient surgery, inpatient hospital services, prescription drugs,
preventative care, and home health care