Health Insurance PlansUnit 2.4Dr. Hale

Medical TechnologiesJr. Program

Introduction

1. Cost of health care is a major concern of everyone who needs health services

2. Statistics show cost of health care is over 15 percent of the gross national product

3. Health care costs are increasing much faster than other costs of living

4. Most people rely on health insurance plans to pay for health care costs

5. Without insurance, the cost of an illness can become a financial disaster

6. Many different types of plans are available

Health Insurance Plans

1. Offered by thousands of insurance agencies

2. Common example is Blue Cross – Blue Shield

3. Premium or payment is made to insurance company

4. If insured individual has expenses covered by the plan, the insurance company pays for the services

5. Amount of payment and services covered vary from plan to plan

6. Insurance terminologya. Deductibles: amounts that must

be paid by the insured individual for medical services before the policy begins to payb. Co-insurance: requires that

specific percentages of expenses are shared by individual and company

1) 80 – 20 percent co-insurance: company pays 80%, insured pays 20%

2) 50 – 50 percent co-insurance: company pays 50%, insured pays 50%

C. Co-payment1) Specific amount of money patient pays for a particular service2) Example: $10 for each

physician visit regardless of total cost of visit

8. Many individuals have insurance from place of employmenta. At times, employer pays entire cost of planb. At other times, cost is shared by

employer and employee9. Private policies can also be

purchased by individuals

Health Maintenance Organizations

1. Special type of health insurance plan that provides a managed care plan for the delivery of health care services

2. Monthly fee or premium is paid for membership, and the fee stays the same regardless of the amount of health care used

3. Premium can be paid by employer and/or individual

4. Most pay for total health care including routine examinations and preventive type health care, not usually covered under other plans

5. Advantages: provides ready access to health care, early detection and treatment of disease; individual usually maintains a better state of health

6. Disadvantages: individual can use only HMO affiliated health care providers (doctors, labs, hospitals) for health care; if individual care chooses a nonaffiliated health care provider, the individual must pay for the care

Preferred Provider Organizations

1. Another type of managed care insurance plan

2. Usually provided by large industry or company

3. PPO contracts with certain health care agencies

4. Employee restricted to using the specific health care agencies

5. Industry/company using the PPO can provide health care at lower rates

6. PPOs usually require a deductible and a copayment

7. If an enrollee uses a non-affiliated provider, the PPO may require copayments of 40 to 60 percent

Medicare

1. Federal government health care plan2. Provides health care to following

individualsa. Over the age of 65b. Persons with a disability who have had

social security benefits for at least two yearsc. Any person with end-stage renal

disease

3. Three types of coverage

a. Type A

1) Covers hospital services

2) Covers care by extended care facility or home-health care agency after hospitalization

3) Covers hospice care for people with a terminal illness

b. Type B1) Coverage for doctor’s services, outpatient treatments, therapy, and other health care2) Individual pays premium for this coverage3) 80-20 percent co-insurance: Medicare pays 80% of approved costs and individual pays remaining 20% or has other policy to cover the 20%

c. Type D: assists with pharmaceutical expenses

Medigap Policies

1.Health insurance plans that help pay expenses not covered by Medicare

2.Policies are offered by private insurance companies and require the payment of a premium by the enrollee

3.Medigap policies must meet specific federal guidelines

4.Provide options that allow enrollees to choose how much coverage they want to purchase

Medicaid

1. Medical assistance program that is jointly funded by the federal government and state government but operated by individual states

2. Benefits and individuals covered vary from state to state because each state has the right to establish its own eligibility standards, determine the type and scope of services, set the rate of payment for services, and administer its own program

3. Usually covers individuals with low incomes, children who qualify for public assistance, and individuals who are physically disabled or blind

4. Generally, all state Medicaid programs provide hospital services, physician’s care, long term care services, and some therapies

5. Some states provide dental care, eye care, and other specialized services

6.State Children’s Health Insurance Program (SCHIP)

a. Established in 1997 to provide health care to uninsured children of working families who

earn too little to afford private insurance but too much to be eligible for Medicaid

b. Provides inpatient and outpatient hospital services, physician’s surgical and medical care, laboratory and X-ray tests, and well baby and well child care, including immunizations

Worker’s Compensation

1. Provides treatment for workers injured on the job

2. Administered by the state3. Payments made by employers and

the state4. Provides payment for health care

and lost wages

United States government plans

1. Provide health care for all military personnel

2. TRICARE, formerly called CHAMPUS (Civilian Health and Medical Programs for the Uniform Servicesa. Care for all active duty members and

their familiesb. Care for survivors of military personnel and retired members of the Armed Forces

3. Veterans Administration provides for military veterans

Managed Care

1. Developed because of the rising cost of health care

2. Employers and insurance companies want to see that money is spent efficiently, rather than wastefully

3. Principle is that all health care provided to a patient must have a purpose

4. Second opinion or verification of need is frequently required

5. Every effort is made to provide preventive care and early diagnosis of disease

6. Usually provides routine physical examinations, well baby care, immunizations, and wellness education to promote good nutrition, exercise, weight control, and health living practices

7. Employers and insurance companies create a network of doctors, specialists, therapists, and health care facilities that will provide care at the most reasonable cost

a. HMOs and PPOs (Preferred Provider Organization) are the main providers

b. Private insurance companies are also setting up health care networks to provide care

c. As these networks compete for the consumer dollar, they are required to provide quality care at lowest possible cost

8. Health care consumer receives quality care at the most reasonable cost, but is restricted in choice of health care providers

Health Insurance Portability and Accountability Act (HIPAA)

1.As the cost of insurance increases, many employers are less willing to offer health care insurance

2.Individuals with chronic illnesses often find they cannot obtain insurance coverage if their place of employment changes

3.One reason the federal government passed HIPAA in 1996

4.Five main components of HIPPAa. Health care access, portability, and

renewability1) Limits exclusions on preexisting conditions to allow for the continuance of insurance even with job changes2) Prohibits discrimination against an enrollee or beneficiary based on health status

3) Guarantees renewability in multiemployer plans

4) Provides special enrollment rights for individuals who lose insurance coverage in certain situations, such as divorce or termination of employment

b.Preventing health care fraud and abuse, administrative simplification, and medical liability reform1) Establishes methods for preventing fraud and abuse and sanctions or penalties if fraud or abuse occur

2)Reduces the costs and administration of health care by adopting a single set of electronic standards to replace the wide variety of formats used in health care

3)Provides strict guidelines for maintaining the confidentiality of health care information and the security of health care records

4)Recommends limits for medical liability

c.Tax related health provisions1) Promotes the use of medial savings

accounts (MSAs) by allowing tax deductions for monies placed in the accounts2) Establishes standards for long term care insurance3) Allows for the creation of state insurance pools4) Provides tax benefits for some health

care expenses

d.Application and enforcement of group health plan requirements: establishes standards that require group health care plans to offer portability, access, and renewability to all members of the group

e.Revenue offsets: provides changes to the Internal Revenue Code for HIPAA expenses

6.Regulations have not solved all problems of health care insurance, but they have provided consumers with more access to insurance and greater confidentiality in regards to medical records

7.Standardization of electronic health care records, reductions in administrative costs, increased tax benefits, and decreasing fraud and abuse in health care have reduced health care costs for everyone

Summary

1.Health insurance plans do not solve all the problems of health care costs

2.Do help many people pay for all or part of cost

3.Important for individuals to understand what plan covers

4.Also need understanding of coinsurance and other restrictions plans may have