Health Insurance Consumer Health Unit

1. Health InsuranceConsumer Health Unit Objectives: TSWBAT differentiate between types of insurance programs and terms. TSWBAT analyze which health insurance plan available would best fit the students’ needs.

2. Can you name some carriers??? http://www.healthinsurancesort.com/carrier-list.htm

3. Health Insurance • A person buys insurance and the insurance provider agrees to pay or reimburse for the costs of medical care • “Gambling analogy” • In 2006, 47 million people in the U.S. (16% of the population) who were without health insurance for at least part of that year

4. Introduction • What’s the #1 reason young adults end up in bankruptcy? • Large, unexpected medical bills from • an accident • an illness Combined with • NO health insurance

5. Why are they uninsured? • Insurance costs increase 10%-15% each year • Other debts to pay first • $20K in college loans • Convoluted lingo • Procrastination • Feel invincible

6. In their own words??? • No one is making me pay for health insurance… [someone is] making me pay for rent, cable, and student loans. Insurance is the only thing I can put off for a little while.” • Nicole Ross, 21, a recent college graduate • “Right now I have $300 to my name. I ate Ramen noodles today. If you don’t have a job yet, how do you even pay for it?” • Andrew Hoffman, a student at Coastal Carolina University

7. Do you really need it? • YES! • How much does a broken leg cost? • $5,000 - $20,000 • How much does a serious car accident cost? • $50,000

8. History of Health Insurance • Before medical expense insurance, patients were expected to pay all other health care costs out of their own pockets • Almost impossible now with the high cost of health care • Accident insurance • Franklin Health Assurance Company of Massachusetts. • Founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents • The first employer-sponsored group disability policy was issued in 1911

9. Group Policies – provided by employer you employer pays for all or most of you insurance plans cost All employees at work have the same health insurance options as you do Commonly called “benefits” Individual Policies – you buy the policy yourself Very similar to the way you get car insurance About 9% of the population gets their health insurance this way Group vs. Individual Insurance

10. Health Insurance Terms • Provider – a hospital, doctor or anyone else who provides a service • Network – Group of hospitals and/or doctors that jointly provide care to a given group of patients covered by health insurance

11. Health Insurance Terms • Major Medical - form of medical insurance designed to supplement a basic medical expense plan in the event of extraordinary medical expenses • Extreme illness or disability • Covered Expense – something that the insurance plan will pay for • Exclusions –Not all services are covered. The policy-holder is generally expected to pay the full cost of non-covered services out of their own pocket.

12. Example of what a plan would look like… http://www.shpnc.org/smartchoice-ppo.html

13. Insurance Terms Continued • Pre-existing Condition – • A health Problem that a person has before they are covered by a certain policy • The policy may or may not pay for expenses associated with these conditions • Waiting Period – • Predetermined amount of time between when your employment begins and when your insurance coverage actually begins • You are not covered during this time

14. Your Costs • Premium – • The amount the policy-holder pays to the health plan each month to purchase health coverage • Deductible – • The amount that the policy-holder must pay out-of-pocket before the health plan pays its share • Deductible could be yearly or could be per injury / illness • Example: • Your yearly deductible - $500.00 • Your medical Bill – $2,500.00 • Insurance company pays $2,000.00 • You pay $500.00

15. Costs!! • Copayment • The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. • Example - • a policy-holder might pay a $45 copayment for a doctor's visit, or to obtain a prescription. • A copayment must be paid each time a particular service is obtained

16. Managed Care Organized system of health care services designed to control health care costs Use of a panel or network of health care providers to provide care to enrollees Managed care usually involves: Standards for selecting providers An emphasis on preventive care Financial incentives to encourage enrollees to use care efficiently

17. Two main kinds of Managed Care Insurance • HMO – Health Maintenance Organization • PPO – Preferred Provider Organization

18. HMO • Manage patients' health care by reducing unnecessary services • Most HMOs require members to select a primary care physician (PCP) • PCP = physician acts a gatekeeper to medical services • PCP authorizes referrals to specialists or other doctors if deemed necessary • This is called a “referral” • Emergency medical care does not require prior authorization from a PCP

19. HMO’s vs. non-network • Most HMO’s will only pay for medical bills for your PCP for services your PCP approves through referral • HMOs typically provide no coverage for care received from non-network physicians • exceptions for emergency care while traveling, etc.

20. HMO Public Image • HMOs often have a negative public image due to their restrictive appearance. • HMOs have been the target of lawsuits claiming that the restrictions of the HMO prevented necessary care • Usually a “cheaper” plan

21. PPO – Preferred Provider Organization • Organization of medical doctors, hospitals and other health care providers • “network” or “preferred provider” • Network is contracted with an insurer to provide health care coverage at a reduced rate (substantial discount) • Some surgeries or procedures may need to require pre-approval by the insurance company

22. PPO’s vs. non-network • PPO may reimburse 90 percent of costs for care received within the network, but only 70 percent of costs for non-network care

23. PPO Public Image • Usually allow more freedom than HMO • Usually a more expensive type of insurance plan • Networks can change • If you choose to get medical care from a provider who is out of network….It costs you more money

24. Fee For Service • You purchase through an insurance agent • You choose doctor – no need for a referral • You pay monthly premium, deductibles, and co-insurance. • Have a “lifetime maximum”

25. Different Types of Medical Insurance • Hospitalization Insurance- • Specifically pays for hospitalization • Surgical Insurance – • Specifically pays for fees associated with surgery • Disability Insurance – • Pays for loss of income due to accident or illness • Usually only a percentage of your salary

26. Co-Insurance • Instead of paying a fixed amount up front (a copayment), the policy-holder must pay a percentage of the total cost. • Example- • member might have to pay 20% of the cost of a surgery, while the health plan pays the other 80%. • Because there is no upper limit on coinsurance, the policy-holder can end up owing very little, or a significant amount, depending on the actual costs of the services they obtain.

27. Federal Programs for Health Coverage • Medicaid – • health insurance for people with lower incomes • Funded by state and federal government • Eligibility rule vary state to state • Example of Medicaid requirements • You're a pregnant woman who meets income requirements. For example, a family of four making $23,225 a year or less qualifies. • Your family's assets are less than $2,000

28. Federal Programs for Health Coverage • Medicare – • Government health coverage for people 65 years or older • ***In many cases Medicare pays a portion of the person’s health care cost. • The rest is paid by the person or supplemental insurance plan

29. WIC – Government Program • Women Infants and Children • Program that helps mothers and children with medical bills • Prenatal care • Preventive screenings • Immunizations • Pay for “proper” food and medicines • http://www.fns.usda.gov/wic/

30. Single Payer System • National Health Care / Universal Health Care • Centrally controlled heath care system (government) • Taxes • Sometime requires supplemental health insurance

31. Rankings… • U.S. ranks: • 22nd - infant mortality • 46th - life expectancy • 37th - health system performance, between Costa Rica and Slovenia

32. Bad system or Broken System? • In a 2007 comparison by the Commonwealth Fund of health care: • USA, Germany, Britain, Australia, New Zealand, and Canada • USA ranked last on measures of quality, access, efficiency, equity, and outcomes • 30% of U.S. health care dollars, or more than $1,000 per person per year, went to health care administrative costs

34. Federal Programs for Health Coverage • COBRA • Consolidated Omnibus Budget Reconciliation Act (1985) • Lose your job - may continue to pay your insurance premium & maintain coverage for up to 18 months • This also applies to children on insured employees • If a child somehow loses full-time student status that child may make a COBRA payment to maintain coverage

35. Sicko http://www.youtube.com/watch?v=xlDAUKSh9CQ