Health Insurance

The Basics

Health Insurance: The Basics

•It is important that you understand health insurance It is important that you understand health insurance in order to protect yourself and your familyin order to protect yourself and your family

•Not long ago, individuals paid for medical expenses Not long ago, individuals paid for medical expenses out of their pocket directly to the providerout of their pocket directly to the provider

•As the costs of healthcare continued to rise it was As the costs of healthcare continued to rise it was apparent that the public needed a way to help pay for apparent that the public needed a way to help pay for the servicesthe services

Health Insurance: The Basics

At some point in your life you will probably need At some point in your life you will probably need expensive medical careexpensive medical care

•Health Insurance, like other kinds of insurance, Health Insurance, like other kinds of insurance, protects you against significant financial loss,protects you against significant financial loss,

•Health Insurance ensures you can afford medical help Health Insurance ensures you can afford medical help when you need it,when you need it,

•Health Insurance can help keep you healthy by Health Insurance can help keep you healthy by detecting and treating dangerous medical conditions detecting and treating dangerous medical conditions before they become serious.before they become serious.

Health Insurance: The Basics

10 things you should know about Health Insurance10 things you should know about Health Insurance• Insurance costs a lot but having none costs more.Insurance costs a lot but having none costs more.• If your employer offers health insurance, grab it.If your employer offers health insurance, grab it.• Comparing plans is tough but necessary.Comparing plans is tough but necessary.• The lowest premium isn’t always the cheapest plan.The lowest premium isn’t always the cheapest plan.• Even good coverage can have big loopholes.Even good coverage can have big loopholes.• You’ll pay more for freedom (ability to choose your own You’ll pay more for freedom (ability to choose your own

doctor, hospital, etc.).doctor, hospital, etc.).• You can check out healthcare networks before signing upYou can check out healthcare networks before signing up• You can keep your insurance if you lose your job (but it is You can keep your insurance if you lose your job (but it is

costly).costly).• Working couples have more to think about.Working couples have more to think about.• Tax breaks can help.Tax breaks can help.

Top ten Top ten provided byprovided by

Can You Afford to Pay for the Following?

• Flu Shot $21.00• Hepatitis B Shots $75.00 • Preventive Exam $114.00• Chest Exam $157.00• Stitches $220.00• Leg Fracture $1,500.00• Chemotherapy $4,000.00• Tonsilectomy $4,152.00• Open Wounds $9,075.00• Appendectomy $10,511.00• Internal Injury $26,000.00

Health Insurance: The Basics

Law of Large NumbersLaw of Large Numbers

Health insurance companies, as with other types of insurance Health insurance companies, as with other types of insurance companies, protect themselves against financial loss by companies, protect themselves against financial loss by spreading the risk of costly claims among many customers over spreading the risk of costly claims among many customers over many years.many years.

Pre-existing ConditionsPre-existing Conditions

The more likely that people need health insurance, the more The more likely that people need health insurance, the more likely they are to seek it.likely they are to seek it.

An insurer may refuse to cover treatment if the condition existed An insurer may refuse to cover treatment if the condition existed prior to enrolling in a health insurance plan.prior to enrolling in a health insurance plan.

Health Insurance: The Basics

Two Basic Health Plans: Group and IndividualTwo Basic Health Plans: Group and Individual

Group PlansGroup Plans

A group buys insurance for everyone in the group.A group buys insurance for everyone in the group.

Most Americans fall into some type of group plan.Most Americans fall into some type of group plan.

Employer, professional, religious, or other organizations Employer, professional, religious, or other organizations can purchase group plans for their members.can purchase group plans for their members.

In most cases, group insurance is provided by an In most cases, group insurance is provided by an employer as a benefit to its employees.employer as a benefit to its employees.

Health Insurance: The Basics

Group Plans (continued)Group Plans (continued)

Advantages:Advantages:

Generally less expensive. Generally less expensive.

Everyone who belongs to the group can enroll even if Everyone who belongs to the group can enroll even if pre-existing conditions exist.pre-existing conditions exist.

Disadvantages:Disadvantages:

Options are limited depending on what the plan sponsor Options are limited depending on what the plan sponsor chooses.chooses.

The plan sponsor can discontinue the insurance at any The plan sponsor can discontinue the insurance at any time as long as everyone in the plan is dropped.time as long as everyone in the plan is dropped.

Health Insurance: The Basics

Individual PlansIndividual Plans

People who are self-employed, or whose company People who are self-employed, or whose company does not offer health insurance as a benefit, can buy does not offer health insurance as a benefit, can buy health insurance directly from an insurance company.health insurance directly from an insurance company.

Advantages:Advantages:

You can have the policy written for your needs.You can have the policy written for your needs.

Discounts can be offered for healthier people.Discounts can be offered for healthier people.

Disadvantages:Disadvantages:

Usually more expensive.Usually more expensive.

If a pre-existing condition exists, it will be very If a pre-existing condition exists, it will be very expensive to cover.expensive to cover.

Health Insurance: The Basics

The Bottom LineThe Bottom Line

•Young people who are relatively healthy often do not Young people who are relatively healthy often do not see the need for health insurance.see the need for health insurance.

•Unless an illness is life-threatening, a health-care Unless an illness is life-threatening, a health-care provider can refuse to treat you.provider can refuse to treat you.

•If a young person had a catastrophic illness or If a young person had a catastrophic illness or accident, the medical bills could easily top $50,000.accident, the medical bills could easily top $50,000.

•No matter what your economic or health status is No matter what your economic or health status is you can usually find a plan that will at least cover you can usually find a plan that will at least cover some of your needs including a catastrophic accident some of your needs including a catastrophic accident or illness.or illness.