This document discusses various topics related to health care planning, including identifying sources of health care plans and types of coverage provided. It describes major provisions of plans and policies, as well as the purpose of disability income insurance. The document provides tips for reducing personal health care costs through prevention. It also discusses health insurance as financial protection and as part of risk management. Various types of health care providers, coverage, and policies are defined.

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 Your
Personal 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 and
Financial 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
 surgeon's 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, Teacher's 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 Your
Money 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