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Health care planning

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  • 1. Health Care Planning
  • 2. Objectives  Identify the major sources of health care plans.  Describe the major types of coverage provided by health care plans.
  • 3. Objectives  Explain the major provisions of health care plans and insurance policies.  Describe the purpose and major features of disability income insurance.
  • 4. How Can You Reduce YourPersonal Health Care Costs? Stay well - focus on prevention  eat a balanced diet and keep your weight under control  avoid smoking and don’t drink to excess  get enough rest, relaxation, and exercise  drive carefully and look for accident and fire hazards in your home
  • 5. Health Insurance andFinancial Planning Protection against financial loss due to illness or injury. Part of your overall risk management plan to safeguard your family’s economic security  medical expense insurance  disability income insurance to protect your most valuable asset - your ability to earn an income
  • 6. Health Care Planning FOUR LOSS TYPES:  Direct medical care  Recuperative (Recovery) care  Rehabilitation (Mental Health)  Replacement of income
  • 7. Health Care Providers  Individual  Group  Lower rates  Employee fringe  Coverage for existing health problems
  • 8. Health Insurance and Financial Planning (continued) Group plans comprise more than 85% of all health insurance issued Most group plans are sponsored by employers, with the employer paying most or all of the cost Group plans can be supplemented with individual plans ( Top Up). Following divorce, a former spouse can remain covered for three years, but the premiums can be as high as $4,000 a year
  • 9. Health Care Providers Private insurance companies Managed care plans  Preferred provider  Health maintenance
  • 10. Health Care Providers  Government plans  Medicare  Medicaid
  • 11. Health Care Coverage  Hospital  Surgical  Medical expense  Major medical expense  Comprehensive health  Dental expense and vision care
  • 12. A Good Health Insurance Plan Should..  Provide quality care at a reasonable cost  Offer basic coverage for doctor and hospital bills  Cover 120 days’ hospital room and board  Provide at least $1,000,000 lifetime maximum per person  Pay 80% of out-of-hospital expenses after the deductible is met  Have no unreasonable exclusions  Limit out-of-pocket expenses
  • 13. Types of Health Care Coverages Hospital  hospital room, operating room, lab tests, X-rays, medicine Hospital indemnity  pays a fixed amount for each day in hospital. Best for people in high risk groups Surgical  surgeons fee Physician  office visits, lab tests and X-rays
  • 14. Types of Health Care Coverages (continued)  Major medical  covers expenses for a long term injury or illness  Comprehensive major medical  low deductible offered without a separate, basic plan  Dread disease  focuses on unrealistic fears, and only pays out for very specific conditions. Often sold by people working on commission.
  • 15. Types of Health Care Coverages (continued) Dental  group coverage for tests, cleaning, x-rays, fillings, oral surgery Vision care  some group plans include test and glasses Long term care  fastest growing coverage, especially for women
  • 16. Health Care Coverage  Medicare supplement (Medigap)  Long-term care  Accident and dread disease
  • 17. Why Do People Buy Long-Term Care Insurance? To avoid losing assets To avoid dependence 23.0% 25.0% Protect standard of living Other reasons 25.0% 15.0% Guarantee services 12.0%1996, Teachers Insurance and Annuity Association
  • 18. Making Sense of Health Benefits GENERAL TERMS AND PROVISIONS:  Definitions  Who is covered  Time period
  • 19. Making Sense of Health Benefits PAYMENT LIMITATIONS:  Policy Limits  Deductibles and co-payments  Coinsurance  Coordination of benefits
  • 20. Making Sense of Health Benefits COVERAGE LIMITATIONS:  Based on timing of loss  General exclusions  Maternity benefits
  • 21. Disability Income Insurance Disability income insurance replaces a portion of the income lost when you cannot work because of illness or injury.  The chances of becoming disabled for at least three months are seven times greater than the chances of death!
  • 22. Disability Income Insurance  Level of need  Important policy provisions  Elimination period  Benefit period  Degree of disability
  • 23. Disability Income Insurance  Important policy provisions (continued)  Residual clause  Social Security rider  Cost-of-living adjustments
  • 24. How Long YourMoney Will Last
  • 25. Trade-Offs in Choosing a Policy  Reimbursement versus indemnity  Inside limits versus aggregate limits  Deductibles and coinsurance  Out-of-pocket limit, or stop-loss  Benefits based on reasonable and customary charges
  • 26. How to Choose an HMO Consider the following factors  accessibility  convenient office hours  alternative physicians  second opinions  type of coverage  appeal procedures  price