Health Insurance

Difference between Indemnity Plan and Managed Care Plan

Indemnity plan allows participants to seek health care from any qualified medical provider. Managed care plan limits participants to a specific list of providers.

Premiums

Regular payments in return for insurance coverage

Beneficiary

the person who received the payment from the life insurance

Whole life insurance

• Also permanent insurance • Provides coverage for as long as the policyholder continues to pay premium • Build up savings for policyholder over time • As account builds a "cash value", you can borrow or take cash out • At some point, cash value can be used to pay your premiums until your death • Can serve as a source of liquidity and a kind of investment in your financial plan

Deductible

• Amount of money you pay before your insurance starts to cover you • Removes some of the financial burden from the insurance company • The higher the deductible, the lower your premiums

HMO (Health Maintenance Organization)

• Based on negotiated agreements with specific doctors to provide health care • Individuals choose a primary care physician from an approved list and must be referred for any specialized care • The primary care doctor may approve and arrange for care from a specialist—and set limits on # of times patient may visit

COBRA

• Consolidated Omnibus Budget Reconciliation Act • Allows you to continue health insurance coverage for up to 18 months after your employment ends • You will be required to pay the premiums that your previous employer was paying for coverage

Medicare

• Government-sponsored health insurance plan funded by taxes • Provides benefits to individuals who are at least 65 and qualify for Social Security, or to individuals who are disabled • Part A-Hospital insurance- no cost • Part B- Doctor visits and outside hospital- must pay premium

Medicaid

• Government-sponsored program that provides health insurance for low-income individuals • Eligibility may differ from state to state • Coverage designed for the elderly, blind, disabled, and needy families with dependent children

HIPAA

• Health Insurance Portability and Accounting Act • Ensures that workers can continue their health insurance coverage even if they switch jobs • Prohibits insurance companies from denying new employees access to coverage based on their health or preexisting conditions

Pre-existing conditions

• Health conditions that existed before your policy was granted • Insurance policies may exclude coverage for preexisting conditions

Group plan

• Insurance plans that cover a large group of individuals • Ex: all the employees of a particular company or local government • An individual's high risk or loss is spread across the entire pool • Pay same amount of coverage • Contrast- an individual or family not part of a group may pay much more for coverage if there is any history of illness or significant health risk

Term life insurance

• Life insurance provided over a specific period of time • Ranges from 5-20 yrs. • Builds no savings and is not an investment • Lower premiums

Coverage limits

• Many policies limit total amount they will pay for certain procedures • Some may exclude procedures completely if they are voluntary (plastics) • Typically, experimental treatments are not covered • Limit # of days of hospital care they will pay for nor the frequency of certain treatments • If you have a bill that exceeds coverage limits, you have to pay the difference • Policies differ on coverage for prescription drugs • Some cover only certain drugs or provide only partial payment for unapproved drugs

PPO (Preferred Provider Organizations)

• Provide a larger network of providers • Because great flexibility, PPOs cost more than HMOs • Don't need referrals to go to a specialist

Universal life insurance

• Provides coverage for a specified term • Builds savings • Combo of term and whole life insurance • Most flexibility • You can add units of term coverage for periods of payment and alter your payments during your life • Choices on how money is invested

Location restrictions

• Some US insurance companies will cover medical care delivered inside the US only • Others will provide coverage in foreign countries • It's a good idea if you travel abroad that you purchase a short-term health insurance for your trip

Co-insurance (co-pay)

• The share of costs for covered services that the insured person is required to pay out of pocket • Usually copay applies to most medical services • In many cases, you're required to pay 20% of cost of treatment