Chapter 11: Health Care Planning

1
Chapter 11 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 dont 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 financialloss due to illness
  or injury.
• Part of your overall risk management plan to
  safeguard your familys 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 care
• Rehabilitation
• 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
• 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 Coverages

• Hospital
• Surgical
• Medical expense
• Major medical expense
• Comprehensive health
• Dental expense and vision care

11
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

12
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

13
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.

14
Types of Health Care Coverages
(continued)

• Dental
• group coverage for exams, cleaning, x-rays,
  fillings, oral surgery
• Vision care
• some group plans include exams and glasses
• Long term care
• fastest growing coverage, especially for women

15
Making Sense of Health Benefits
GENERAL TERMS AND PROVISIONS

• Definitions
• Who is covered
• Time period

16
Making Sense of Health Benefits
PAYMENT LIMITATIONS

• Policy Limits
• Deductibles and copayments
• Coinsurance
• Coordination of benefits

17
Making Sense of Health Benefits
COVERAGE LIMITATIONS

• Based on timing of loss
• General exclusions
• Maternity benefits

18
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!