CSM 204 Chapter 11 LectureOutline of Previous LectureI. What is insurance?II. Insurance TermsIII. Planning an Insurance ProgramIV. Property and Liability InsuranceV. Home and Property InsuranceVI. Homeowner’s CoverageVII. Factors Affecting Home Insurance CostsVIII. Automobile Insurance CoverageIX. Amount of CoverageX. Automobile Insurance Premium FactorsXI. Reducing Automobile Insurance CostsXII. Quiz 4-1Outline of Current LectureI. Health Care CostsII. Why does health care cost so much?III. Controlling Health Care CostsIV. Health Insurance and Your Financial PlanV. Plan TypesVI. Types of Medical CoverageVII. Major Provisions in Health InsuranceVIII. Health Insurance Trade-OffsIX. Private Health InsuranceX. Government Health Care PlansXI. Patient Protection and Affordable Health Care Act of 2010XII. Disability Income InsuranceXIII. Sources of Disability IncomeXIV. Quiz 4-2Current LectureChapter 11 – Health, Disability and Long-Term Care InsuranceHealth Care CostsUS has highest per capita medical costsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Twice as much as spent in other industrialized countriesHigh administrative costsWhy does health care cost so much?TechnologyDuplication of diagnostic testsAging of the populationRegulation burdensIncreasing emergenciesLimited competitionInflationMalpractice insuranceControlling Health Care CostsReview fees and ChargesSeek preventive careAsk for generic drugsAs opposed to preferred drugsPractice preventive care and stay wellConsider a high deductibleUse a flexible spending planHealth Insurance and Your Financial PlanLimits the financial burden of illness or injuryPart of your overall risk management planIncludes disability income insurance to protect your most valuable asset – your ability to earn an incomePlan TypesGroup Health InsuranceInsurance through your workplaceComprise more than 90% of health insurance plansUsually employer-sponsoredUsually portableCOBRAComprehensive Omnibus Budget Reconciliation Act18 MonthsIf you quit, you can keep the health insurance for 18 monthsYou will have to pay the whole thingIf you have to wait to be on your new jobs health insurance or are unemployed for a short periodSupplemental policies availableIf your group insurance is not adequateIndividual Health InsuranceSupplements to Group Health InsuranceTypes of Medical CoverageComprehensive major medical insuranceHospital Expense InsuranceRoom and boardSurgical Expense InsuranceStarting with the pre op area, the procedure, and the recovery roomPhysician Expense InsuranceEverything elseMajor Medical InsuranceAfter deductiblesHospital indemnityPays benefits directly to you only when you’re hospitalized and used to pay expenses you may have that you insurance doesn’t coverDental Expense InsuranceVision Care InsuranceLong-term Care InsuranceNursing home and home health care coverageVery important insurance to have by the time you turn 50Major Provisions in Health InsuranceEligibilityAssigned benefitsInternal limitsWhat’s reasonable and customary to charge for somethingCo-paymentsService BenefitsExclusions and limitationsCoordination of benefitsCancellation and terminationHealth Insurance Trade-offsReimbursement vs. indemnityYou want reimbursement so that they pay the provider, not pay you then you pay the providerInternal limits vs. aggregate limitsDeductibles vs. co-insuranceHigher deductibles have lower co-pays and vice versaOut-of-pocket limit (stop loss)Reasonable and customary chargesPrivate Health InsurancePrivate insurance companiesAs opposed to the governmentHospital and medical service plansTied to a certain hospital systemManaged Care and health maintenance organizations (HMOs)Blue Cross Blue Shield of your statePreferred provider organizations (PPOs)Home health care agenciesHealth insurance marketplacesEmployer self-funded plansNew health care accountsGovernment Health Care PlansMedicarePart A – HospitalPart B – MedicalPart C – Medicare AdvantagePart D – Prescription drugsMedigapMedicaidPatient Protection and Affordable Health Care Act of 2010Tax credits to small business to make providing health care more affordableProhibits denying children for pre-existing conditionsAccess to health care for people with preexisting conditionsNo co-pay for preventive servicesCan remain on parent’s policy until age 26Prohibits lifetime capsRestricts use of annual limitsGives consumers access to an internal appeals processIncreases funding for Community Health CentersInvestment to increase number of physicians, nurses, nurse practitioners, and physician’s assistantsRequires justification for all premium increasesDisability Income InsuranceDisability is more likely than deathProvides regular cash incomeDisability decreases income and increases expensesPay attention to “Definition of disability”Aim to replace 60-70% of gross incomeBenefit periodThe shorter the benefit period, the cheaper the policy will beWaiting periodThe longer the waiting period, the cheaper the policy will beAccident and sickness coverageNon-cancellable and guaranteed renewableSources of Disability IncomeEmployerSocial SecurityWorkmen’s CompensationPrivate Disability InsuranceQuiz 4-21. True2. Surgical3. Medicaid4. Making Poor Diet Choices5.