Medical Insurance
Overview
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Many people in the US are uninsured –
they assume all responsibility for health
care costs.
The number of uninsured is sizable and
growing. Why???
Health insurance decreases the patients
out of pocket expenses for health care
services.
How does insurance
work?
 Insurance is more affordable when purchased
in large groups – only a few of the insured will
require constant medical care and use the
insurance in large amounts.
 Co-insurance (i.e. 80%-20%). A percentage
the patient is responsible for on a
given insurance claim
 Companies purchase health
insurance for employees
Obtaining Health Insurance
Coverage Through Your Employer
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Eligibility depends upon continuous
employment
Employees must work 20 or more hours per
week at most companies.
Most companies have a waiting period
before insurance benefits are available (i.e.
30 days, 60 days, etc…).
Pre-existing conditions may be ineligible for
insurance coverage.
Types of Health Insurance
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HMO - Health Maintenance Organization
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A type of managed care medical insurance
Specialist treatment is available with a referral
Insured are limited to contracted physicians for
care.
Out of pocket expenses are set.
Specialty care must be submitted to HMO for
approval – it may be denied.
Types of Health Insurance
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PPO - Preferred Provider Organization
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Physicians contract services for a set fee and
are listed as a preferred provider.
The insured person chooses from a
list of preferred providers.
The insurance company pays a set
amount and the insured pays a set
amount called the co-payment.
Referrals are made to specialists on the list.
Types of Health Insurance
 Agency Plan
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Example: Aetna, Humana,
Blue
Cross/ Blue Shield, etc…
Fees for insurance may be less up front
Pay for larger portion of care when received
May have large deductibles
Usually more freedom in choice of doctors.
Agency may offer several types of plans (HMO,
PPO, etc…)
Types of Health Insurance
 Medicare
 Government program providing health
care to people over age of 65 and those
who are disabled and have received Social Security
benefits for at least 2 years.
 Medicaid
 Medical assistance program
 Operated by the STATE, not the federal government
 Pays for health care of people with low incomes,
children who qualify for assistance, and people who
are physically disabled or blind
Types of Health Insurance
• CHIP
– Children’s Health Insurance Program
– Controlled by the STATE.
– Provides health care to uninsured children of working
families who earn too little to afford private insurance but
too much to be eligible for Medicaid.
 Worker’s Compensation
 Provides treatment for workers injured on
the job and reimburses worker for lost wages (earnings)
 Controlled by the STATE
Health Savings Accounts
 Health Savings Accounts (HSA)
 a type of medical savings account owned by
an individual and is used to pay for current and
future medical expenses.
 HSAs are commonly used in conjunction with a
“High Deductible Health Plan” (HDHP).
 a health insurance plan with lower premiums and higher
deductibles than a traditional health plan
Health Savings Accounts
 High Deductible Health Insurance
 Minimum deductible
 $1,100 (self-only coverage)
 $2,200 (family coverage)
 Maximum out of pocket costs
 $5,600 (self-only coverage)
 $11,200 (family coverage)
Optional Health Insurance
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Cancer Insurance
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Specific insurance for the treatment of
cancers.
In addition to basic health care insurance.
Optional Health Insurance
Disability Insurance
 Provides income upon disability – short
or long term.
 Various waiting periods are available
before benefits begin (12 weeks, pay
80%; 4 weeks, pay 60%, etc…)
Optional Health Insurance
Vision Insurance
 may pay a portion of an eye exam
 Some will cover the cost of glasses or
contact lenses.
Optional Health Insurance
Dental Insurance
 covers a portion of teeth cleaning, fillings,
x-rays, orthodontics and oral surgery
 Most of the time, there is a lifetime limit
for orthodontic care
Life Insurance
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Provides financial payment to a
beneficiary in the event of death.
Benefits can vary, depending on the needs
of the family and individual.
Employers often offer life insurance to their
employees in the amount of the employee's
annual salary.
Individual policies can be purchased
Types of Life Insurance
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Term Life Insurance – specific amount of
money will be paid to a beneficiary.
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Whole Life Insurance – a policy that allows
the holder of the policy to draw on the
insurance as a pension, as well as having
money go to a beneficiary at the time of
death
Let’s Practice…..
You were injured while cheerleading at a
football game and sustained a broken arm.
The emergency department bill costs $489 to
evaluate, x-ray, and apply a cast to your arm.
The deductible is $100 on your health plan.
Your insurance covers 80% of the costs (after
the deductible is met) for the ER visit.
How much will you pay out of pocket for the
broken arm???
ER Visit Answer
$489 total bill
-100 deductible (you pay on arrival)
$389
$389
x 80%
$311.20 insurance company payment
$389
-311.20
$77.80 additional amount you owe
Let’s Practice some more…
 Find your 10 o’clock partner
 With your partner, complete the benefits
packet including all of the math calculations.
 Determine how much money you would
spend each payday on healthcare.