Types of Health Care Plans by johanpetro

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									Types of Health Care Plans

Traditional Indemnity Plans:
Also called fee-for-service plans,
 you typically choose the doctors and
 hospitals, pay for the service, and
 then get paid back by the insurance
 company.
Managed Care Plans:
Users make monthly payments
 directly to health care providers.

A designated group of doctors and
 hospitals provide services.

No deductibles are paid, just low
 copayments for services.
Types of Managed Care Plans:
Health maintenance organizations (HMOs)
 Comprehensive services usually at one
 facility
Individual practice associations (IPAs)
 Physicians operate out of their own offices
 and community hospitals
Preferred Provider Organizations (PPOs)
 Broader network of “approved” physicians
 and allows use of out-of-network providers
Providers of Health Insurance

Private Insurers:
Insurance companies
Managed care organizations
Blue Cross/Blue Shield (prepaid
 expense plans)
Group plans (may incorporate any of
 the above)
 Government Agencies:
Social Security’s Medicare program
 Part A—basic hospital insurance for
 those 65 and over who are qualified
 Part B—supplementary medical
 insurance; optional coverage available
 for a monthly premium to those eligible
 for Part A
Workers’ compensation insurance
 Premiums paid by employers for
 workers injured on the job
 Coverage includes:
Medical and rehabilitation expenses
Disability income
Lump-sum payments for death or
 dismemberment
Second-injury funds
Other sources of health care:
Homeowner’s and automobile
 insurance policies contain limited
 amounts of medical coverage.

Other government health programs at
 the federal, state and local levels,
 including Medicaid and programs for
 military personnel.
 Types of Medical Expense
        Coverages
Hospital insurance:
pays a portion of per-day room
 and board charges,
use of hospital facilities, and
selected other services.
Surgical expense insurance:
pays cost of surgery either in or out of
 the hospital
not all procedures are covered, such
 as cosmetic or experimental surgery

Physicians expense
 insurance:
pays physician fees for nonsurgical
 care in hospital
includes consultation with specialists
 and lab tests
Major medical insurance:
broad coverage for illnesses and
 injuries of a catastrophic nature
amount of coverage is large

Dental insurance:
covers necessary dental care and
 some dental injuries
mostly offered through group
 insurance plans
Comprehensive major medical:
The most desirable coverage, it
 combines major medical with basic
 hospital, surgical and physicians
 expense coverages.

Usually offered through group plans
 with low deductible.
 Coverages You Don’t Need!
Accident policies
 only cover certain types of accidents, usually
 travel-related ones

Sickness and dread disease policies
 coverage limited to specific disease or
 illness; prohibited in some states

Hospital income policies
 guarantee a per-diem for hospital stays, but
 generally exclude certain illnesses
     Policy Provisions

Terms of Payment:
 How much your medical expense
 plan will pay is usually
 determined by the following 4
 provisions:
Deductible:
the initial amount not covered
determined on a calendar-year or per-
 incident basis

Participation (Coinsurance):
company pays only a portion of the
 medical expenses after the deductible
plan may include a stop-loss provision
 to cap your out-of-pocket expenses
Internal limits:
limits amount paid on certain items to
 usual, customary, and reasonable
 charges even if cost of entire surgery
 or illness is within the norms
Coordination of benefits:
eliminates double payment when
 coverage provided under more than
 one policy
Terms of Coverage:

 Important provisions to consider
 in your health care policy include
 the following items:
Persons and places covered—Who is
 covered and where are you covered?
Cancellation—Obtain a policy that
 cannot be canceled unless premiums
 are not paid.
Continuation of group coverage
 (COBRA)—At your expense, you can
 continue your previous employer’s
 coverage for up to 18 months after you
 leave the job.
Rehabilitation coverage—How much is
 provided?
Preexisting conditions—How are they
 covered?
Pregnancy and abortion—What is the
 extent of the coverage provided?
Mental illness—How restricted is the
 coverage?
  How Insurance Companies Try
 to Keep Costs Down in Policies

Pre-admission certification
Continued stay review
Second surgical opinions
Caseworkers
Waiver of coinsurance
Long-Term Care Insurance

Provides for delivery of
medical and personal care,
other than hospital care, to
persons with chronic medical
conditions due to illness or
frailty.
Long-Term Care Policy Provisions:
Care—What types and levels of care
 are covered?
Benefits—What are the eligibility
 requirements? How much is the daily
 benefit and how long will it last?
Waiting period—Once eligible, how
 long before the payments begin?
Renewability—Is the policy
 guaranteed renewable?
Preexisting conditions—How will
 they be handled?
Premiums—How much are they? Will
 they increase? Is there an inflation
 clause?
 Do You Need Long-Term Care
         Insurance?
Do you have a lot of assets to
 preserve for your dependents?
Can you afford the premiums?
Is there a family history of disabling
 disease?
Will your family be able to care for
 you?
 Considerations in Purchasing
  Long-Term Care Insurance
Buy the policy while you are healthy.
Don’t buy more coverage than you
 need. (But how much is that?)
Increase the waiting period if you can
 cover costs yourself for a certain
 time period.
Understand the policy provisions
 and when benefits are paid.
   Disability Insurance

Provides families with weekly
or monthly income to replace
income lost when the insured
is unable to work due to an
illness or injury.
Estimating Disability Needs
Estimate monthly living expenses
Estimate existing benefits, such as:
 – Social Security
 – Other government benefits
 – Company benefits
 – Group disability policy benefits
Subtract (2) from (1)
Disability Insurance Provisions:
Definition of disability—"own
 occupation" most desirable.
Benefits—How much will they be and
 how long will they last?
Probationary period—how long after
 policy is issued before benefits are
 available?
Waiting period—once disabled, how
 long before benefits begin?
Renewability—Is it guaranteed
 renewable or noncancelable?
Other features—Look for cost of
 living adjustment, guaranteed
 insurability option, waiver of
 premium.
   Shopping for Insurance
Consider your needs.
How much can you afford?
What can you do to lower your
 health care needs?
Compare policies and costs.
What does your employer provide?
Select a quality company with a
 good agent.

								
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