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HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
HUSC 3366 Chapter 9 Health and Disability Insurance
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HUSC 3366 Chapter 9 Health and Disability Insurance

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Fundamentals of Family Financial Planning Course Powerpoint Lectures

Fundamentals of Family Financial Planning Course Powerpoint Lectures

Published in: Economy & Finance, Business
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  • 1. Health and Disability Insurance Chapter 9
  • 2. Objectives
    • In this chapter, you will learn to:
    • Recognize the importance of health insurance in financial planning.
    • Analyze the costs and benefits of various types of health insurance coverage as well as major provisions in health insurance policy.
    • Assess the trade-offs of different health insurance plans.
  • 3. Objectives Cont’d
    • Evaluate the differences among health care plans offered by private companies and the government.
    • Explain the importance of disability income insurance in financial planning and identify its sources.
    • Explain why the costs of health insurance and health care have been increasing
  • 4. Health Insurance and Financial Planning Lesson: 1
  • 5. What is Health Insurance?
    • 45 million Americans have no health insurance.
    • An older student population is not covered by their family’s policy. 40% are older than age 25.
    • Health insurance limits the financial burdens people suffer due to illness or injury.
      • You pay a premium or fee, to the insurer. In return depending on the policy the company may reimburse you for
      • Hospital stays
      • Doctors visits
      • Medications and
      • Sometimes vision and dental care
    11-7
  • 6. What is Health Insurance?
    • It’s part of your overall risk management plan to safeguard your family’s economic security.
      • Medical expense insurance typically pays only the actual medical costs
      • Disability income insurance protects your most valuable asset - your ability to earn an income.
  • 7. Health Insurance and Financial Planning
    • Group Health Insurance comprise more than 90% of all health insurance.
    • Most group plans are employer sponsored; employer pays part or most of the cost.
    • 1996 Health Insurance Portability and Accountability Act provides federal portability standards, nondiscrimination in health insurance, and guaranteed renewability.
      • If you changes jobs you need not lose your health insurance.
    (continued) 11-8
  • 8. Health Insurance and Financial Planning
    • You can supplement your group policy.
      • The coordination of benefits provision in a policy says that benefits received from all sources are limited to 100% of allowable medical expenses.
    • Individual health insurance is also available buying it directly from the company of your choice for you or your family.
      • Self-employed
      • Simply dissatisfied
    (continued) 11-9
  • 9. Health Insurance and Financial Planning
    • COBRA – (Consolidated Omnibus Budget Reconciliation Act of 1986)
    • Requires many employers to offer employees and dependents the option to continue their group coverage for a set period of time following a divorce or job lay-off.
    • The individual must pay the premiums themselves.
  • 10. Health Insurance Coverage Lesson: 2
  • 11. A Good Health Insurance Plan Should..
    • Offer basic coverage for hospital and doctor bills.
    • Cover at least 120 days hospital room and board.
    • Provide at least $1,000,000 lifetime maximum for each family member.
    • Pay at least 80% of out-of-hospital expenses after yearly deductible of $500-$1,000/person is met .
    • Impose no unreasonable exclusions.
    • Limit your out-of-pocket expenses to no more than $3,000 to $5,000 in a year, excluding dental, optical, and prescription costs.
    11-10
  • 12. Types of Health Care Coverages
    • Basic includes…
      • Hospital expense insurance.
        • Hospital room and board and other charges.
      • Surgical expense insurance.
        • Surgeon's fee for an operation.
      • Physician expense insurance.
        • Pays for physician’s care that does not include surgery, such as office visits, lab tests and X-rays.
    11-11
  • 13. Types of Health Care Coverages
    • Major medical expense insurance.
      • Covers expenses for a serious injury or long-term illness. Has a deductible, coinsurance, and a stop-loss provision.
    • Comprehensive major medical insurance.
      • Low deductible offered without a separate, basic plan. Covers hospital, surgical, and other bills.
    • Dread disease and cancer insurance policies.
      • Focus on unrealistic fears, and only pays out for very specific conditions. Often sold by people working on commission. Poor value.
    (continued) 11-12
  • 14. Types of Health Care Coverages
    • Hospital indemnity.
      • Pays a fixed amount for each day you are in a hospital. Best for people in high-risk groups .
    • Dental expense insurance.
      • Covers exams, cleaning, x-rays, fillings, root canals, and oral surgery.
    • Vision care.
      • Exams, contact lenses, and glasses.
    • Long term care insurance.
      • Growing faster than any other form of insurance.
    (continued) 11-13
  • 15. Health Insurance Policy Provisions
    • Eligibility.
      • Varies with age, marital status, and dependency .
    • Assigned benefits.
      • Insurance pays your doctor or hospital directly.
    • Internal limits.
      • Fixed amount per day for a hospital room.
    • Copayment.
      • Cost sharing in the form of a flat dollar amount you pay, such as $15.00 per office visit or $10 per prescription.
    11-14
  • 16. Health Insurance Policy Provisions
    • Service benefits vs. fixed $ amount
    • Benefit limits - maximum $ amount or maximum # of days in the hospital.
    • Exclusions and limitations.
    • Coordination of benefits - coverage under more than one policy.
    • Guaranteed renewable.
    • Cancellation and termination - explains the circumstances.
    (continued) 11-15
  • 17. Health Insurance Trade-Offs Lesson: 3
  • 18. 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.
    • Health information online can provide information when you are comparing policies.
    11-16
  • 19. Private Health Care Plans and Government Health Care Programs Lesson: 4
  • 20. Private Sources of Health Insurance and Health Care
    • Private insurance companies.
      • Individual policy.
      • Group policy sold to an employer.
    • Hospital and medical service plans.
      • Blue Cross - hospital care benefits.
      • Blue Shield - surgical and medical services benefits.
      • Managed care.
        • Prepaid health plan.
        • Primary care physician.
    11-17
  • 21. Types of Managed Care
    • Health Maintenance Organization.
      • Contracts with selected care providers.
      • Fixed pre-paid monthly premium.
      • Focus is on prevention and wellness.
      • Basic and supplemental services.
    • Preferred Provider Organization.
      • Several providers to choose from.
      • Costs more than a HMO, but you have more choices, fewer restrictions.
      • If you go to a non PPO provider, you pay more.
    11-18
  • 22. Government Health Care Programs
    • Medicare - federal program for those age 65 and older, and certain disabled persons.
      • Part A - compulsory.
        • - Covers hospital costs including doctor
      • Part B - voluntary if have proof of coverage.
      • - Doctor’s visits and prescriptions
      • Parts C & D – Medicare +Choice Plan
    • Medigap - may pay what Medicare doesn’t.
    • Medicaid.
      • Low income people of all ages.
      • State administered with federal guidelines.
    11-19
  • 23. Medical Websites
    • www.nlm.nih.gov
    • www.drugdigest.org
    • www.mayoclinic.com
    • www.oncolink.com
    • www.nimh.nih.gov
    • www.nationalhealthcouncil.org
    11-20
  • 24. Disability Income Insurance Lesson: 5
  • 25. Long Term Care ?’s
    • Maximum Daily benefit?
    • How long does coverage last?
    • Maximum policy limit?
    • Elimination period?
    • Coverage if you stay at home?
    • Insurer safety?
    11-21
  • 26. Disability Income Insurance and Financial Planning
    • Disability is more likely than death at any age.
    • Young, healthy people don’t think about risks related to all their future earning potential.
    • Provides regular cash income lost as the result of an accident, illness or pregnancy.
    • If you become disabled your income drops but your expenses go up.
    11-22
  • 27.
    • Carefully read a policy’s definition of disability.
      • May only pay if you can’t work at any job.
      • Look for a policy that pays if you are unable to work at your regular job.
    • Aim for a benefit that when added to your other income will equal 60-70% of your gross pay.
    • How long do benefits last? To age 65? For life?
    • How long is the waiting period? 30 days? 90 days?
    • Look for a policy that is both noncancelable and guaranteed renewable.
    Disability Income Insurance and Financial Planning (continued) 11-23
  • 28. Four Sources of Disability Income
    • Employer
      • Group disability policy may be short or long term.
    • Social Security.
      • Covers total disability that lasts more than twelve months.
    • Workman’s Compensation.
      • If you are injured at work or your injury is a result of your type of employment.
    • Disability insurance.
      • Benefits limited to 70-80% of your take home pay.
    11-24
  • 29. High Medical Costs Lesson: 6
  • 30. Health Care Costs
    • The US has the highest per capita medical expenditures of any industrialized country in the world.
      • $7,761 health care costs per person in 2005.
      • This amount is twice as much spent on health care as the average for the 24 industrialized countries in Europe and North America.
      • Medical expenditures were 6% of the GDP in 1965, but rose to 16% of our GDP in 2005 and are predicted to be 17% in 2011.
    11-2
  • 31. Why Does Health Care Cost So Much?
    • High administrative costs.
      • 26% of health care dollar vs. 1% in Canada.
    • Use of sophisticated, expensive technologies.
    • Duplication of tests and technologies.
    • Increases in the variety and frequency of treatments.
    • Increasing number and longevity of elderly people.
    • Regulations that result in cost shifting rather than cost reduction.
    11-3
  • 32. Why Does Health Care Cost So Much?
    • Increasing number of accidents, crimes that require emergency services.
    • Limited competition, restrictive work rules in the health care delivery system.
    • Labor intensiveness, rapid earnings growth for health care professionals.
    • Innovative treatments for AIDS, cancer.
    • Built in inflation in health care delivery system.
    • Malpractice Insurance.
    • Aging baby boomers
    11-4
  • 33. What is Being Done About the High Costs of Health Care?
    • Careful review of fees and charges.
    • Establish incentives for...
      • Preventive care.
      • Services provided out of the hospital where medically acceptable.
    • Involve community in balancing health care needs, health care resources.
    • Encourage prepaid group practices.
    • Support community health education programs so people take better care of themselves.
    11-5
  • 34. What Can You do to Reduce Your Personal Health Care Costs?
    • Stay well - focus on prevention.
      • Eat a balanced diet, keep your weight under control.
      • Avoid smoking, don’t drink to excess.
      • Get enough rest, relaxation, and exercise.
      • Drive carefully, watch out for accident and fire hazards in the home.
    11-6

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