Health Insurance
Can name some carriers???
http://www.healthinsurancesort.co
m/carrier-list.htm
Insurance

A person buys insurance and the insurance
provider agrees to pay or reimburse for the costs
of medical care
 Babylon (1750 BC) – merchant ships
 Great Fire on London (1666)


13,200 houses were burned to the ground
Gambling analogy
 In 2006, there were 47 million people in the U.S.
(16% of the population) who were without health
insurance for at least part of that year
Different Types of 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
Life Insurance
 Car Insurance
 Alien abduction insurance??????
History of Health Insurance

Before the development of 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 was first offered in the
United States by the Franklin Health Assurance
Company of Massachusetts. This firm, 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 of the employees
at you 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 – a hospital, doctor or anyone else who
provides a service
Network – Group of hospitals and/or doctors that jointly
provide care to a given group of patients covered by
health insurance
Major Medical - form of medical insurance designed to
supplement a basic medical expense plan in the event of
extraordinary medical expenses



Extreme illness or disability
Covered Expense – something that the insurance plan
will pay for
Exclusions –Not all services are covered. The policyholder is generally expected to pay the full cost of noncovered 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-ofpocket 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
Copayment The amount that the policy-holder must pay out of
pocket before the health plan pays for a particular visit or service.


For 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
Example of what a plan would
look like…
http://www.tffhp.org/summary_pla
n_description.htm
Managed Care
-
Organized system of health care services
designed to control health care costs
-
One of the most characteristic forms of managed
care is the 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
– Health Maintenance Organization
 PPO – Preferred Provider Organization
 HMO
HMO

HMOs manage their patients' health care by
reducing unnecessary services
 To achieve this, most HMOs require members to
select a primary care physician (PCP)


This physician acts a a gatekeeper to medical
services
most medical needs must first go through the PCP,
who 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 and non-network
 Most
HMO’s will only pay for medical bills
for you PCP of for services your PCP
approves through referral
 HMOs
typically provide no coverage for
care received from non-network
physicians (with 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 and 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
Federal Programs for Health
Coverage
– health insurance for people
with lower incomes
 Medicaid


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
–Government health coverage
for people 65 years or older
 Medicare
 ***In
many cases Medicare pays a portion
of the person’s health care cost. The rest
is paid by the persons Medicaid or
supplemental insurance plan
WIC
 Women
Infants and Children
 Program that helps mothers and children
with medical bills




Prenatal care
Preventive screenings
Immunizations
Pay for “proper” food and medicines
Single Payer System


National Health Care
Centrally controlled heath care system
(government)

Taxes

Sometime requires supplemental health
insurance
 U.S. ranks



22nd in infant mortality
46th in life expectancy
37th in health system performance, between Costa
Rica and Slovenia
Bad system or Broken System?

In a 2007 comparison by the Commonwealth
Fund of health care in the U.S. with that of
Germany, Britain, Australia, New Zealand, and
Canada, the U.S. ranked last on measures of
quality, access, efficiency, equity, and outcomes

30 percent of U.S. health care dollars, or more
than $1,000 per person per year, went to health
care administrative costs
Federal Programs for Health
Coverage
 COBRA



Consolidated Omnibus Budget Reconciliation
Act (1985)
If you lose your job you may continue to pay
your insurance premium and maintain
coverage for up to 18 months
This also applies to children on insured
employees
• If a child somehow looses full-time student status
that child may make a COBR payment to maintain
coverage

Coinsurance Instead of paying a fixed amount
up front (a copayment), the policy-holder must
pay a percentage of the total cost.

For example, the member might have to pay 20% of
the cost of a surgery, while the health plan pays the
other 80%. 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.
Sicko
http://www.youtube.com/watch?v=
xlDAUKSh9CQ