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7/28/2019 INS 22 Chapter 12
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EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:09 AM New Brand FMT-P2 1
12. Health and Disability InsuranceHealth Care Problems in US
Private Health Insurance ProvidersBasic Medical Expense Coverages
Major Medical Insurance
Important Group Health Insurance Provisions
Dental Insurance
Long Term Care Insurance
Managed Care Plans
Disability Income Insurance
Government Health Insurance and Healthcare Programs
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Why do you need Health Insurance?
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Healthcare Problems in US
Rising Healthcare Expenditures
Inadequate Access to Medical Care
Uneven Quality of Medical Care
Inefficiency and Fraud
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Providers of Private Health InsuranceCommercial Insurers Blue Cross and Blue Shield Plans
o Non-Profit Planso Sponsor Managed Care Plans such as HMOs and PPOs
Self-Insured Planso Retention Planso Stop-Loss Insuranceo TPAs
Health Insurance Costs may be reduced or increase less rapidlyCash flows of the premium Savings can be invested
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Health insurance Plans
Basic Medical Expense Coverageso Hospital Expense Insurance
o Surgical expenses Insurance ( Based on URC )
o Physicians Visit Insurance( Non Surgical Care by attending physician)
o Additional benefits
Out Patient Surgery Preadmission testing before admission to the Hospital
Diagnostic X-Ray and Laboratory Services
Home Healthcare services by health Professionals
Extended care facility services
Hospice Care
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Health insurance Plans
Major Medical Insurance
o Medical expenses resulting from illness or injury that are not covered
by basic medical expense plan
o Two types
Supplemental Major Medical Insurance Plan (Corridor Deductible)
Comprehensive major Medical Policy (Basic + Major - Treats as one policy)
o Deductibles
Calendar year Deductible
Family Deductible
Deductible Carryover Provision
Common accident Provision
Corridor Deductible
o Coinsurance Provision ( Percentage Participation Clause)Stop loss Provision
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Health insurance Deductibles
Deductibles
o To eliminate small Claims and to hold down premiums
o Range from $100 to $1000 or higher amounts
Calendar Year Deductible
o Widely used in Comprehensive Major Medical Plans
o Must meet only once during the Calendar Year
o Applies separately to each family member
o Two separate Deductibles satisfied by Family Members can be considered as thebasis
Deductible Carryover
o Covered medical expenses of the last 3 months of the calendar can be carried overto the next year to satisfy next years deductible
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Health insurance Deductibles
Dinesh , employed with CSC is covered under United Indias Health Insurancemajor-Medical Expense Group Health Insurance Program. Plan offers a limit of
250,000Health Insurance Offers the plan with various Deductibles as follows
o Case a: Calendar year Deductible per person of $250
o Case b: Calendar year Deductible per person of $250 but 2 persons Satisfaction of
Deductible
o Case c : Calendar year Deductible per person of $250 but with Carry Over Provision of
the last 3 months of the Year to next year
o Case d : Calendar year Deductible per person of $250 but with Common accident
Provision
o Case e: Dinesh is covered under both Basic and Major Medical Expense Plans
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Health insurance Deductibles
Case a: Dinesh incurs 100 in Jan and 125, 135 in Feb
How much United Indias Health Insurance Pays to Dinesh In Jan?
How much United Indias Health Insurance Pays to Dinesh In Feb?
Case b: Dinesh incurs 200 and his wife 245 in Jan and 50, 55 in Feb
Dinesh Father Incurs 500 in Feb
How much United Indias Health Insurance Pays to Dinesh and his Wife In
Jan?
How much United Indias Health Insurance Pays to Dinesh and his Wife In
Feb?
How much United Indias Health Insurance Pays to Dinesh Father In
Feb?
Case d: Dinesh incurs 200 , wife 245, and Father 300 for the expenses in one
accidentHow much United Indias Health Insurance Pays to Dinesh towards this
accident Expenses?
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Group Health Insurance Provisions
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Group Health Insurance Provisions
Preexisting Conditions
o To Reduce Adverse Selection
o Portability-HIPAA
Limiting Coverage for pre-existing condition ( Exception: Pregnancy, newly bornChildren, Adopted Children)
Continuation of Group Health Insurance
COBRA
Coordination of Benefits Provision
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Dental Insurance
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Dental Insurance
Scheduled dental Plan (less than URC)
Unscheduled Dental Plan
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Long term Care Insurance
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Long Term Care Insurance
Skilled Nursing Care, Intermediate Nursing Care, and Custodial NursingCare
Daily Benefit
Maximum Lifetime Benefit
Elimination Period
Eligibility Gate Keeper Provisions based on ADLs
Protection against inflation
Guaranteed renewability
Cost increases with age
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Managed Care Plans
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Managed care Plans
HMOs
Provides comprehensive healthcare services to its members
Plan members choice of physicians and other healthcare providers is usuallyrestricted ti providers who are a part of plan network
Plan members pay a fixed, prepaid premium for the services provided
PPOs
EPOs
POS
Advantages
o Lowers healthcare Costs
o Members pay little or no out-of-pocket costs
o Loss Prevention Services
o No need to file claims
Disadvantages
Reduced quality care
Conflict of interest between high quality medical care and holding down
costs
HMO physicians are not free to treat patients without Restrictions
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Disability Income Insurance
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Disability Income Insurance
Source of Disability Income Insurance
o Individual Disability Income Insurance
o Group Disability Income Insurance
o Social security Disability Income Benefits
Individual Disability Income Insurance
o Total Disability
o Residual disabilityo Elimination Period
o Benefit Period
o Renewability of the policy
Guaranteed Renewable
Non-CancelableConditionally renewable
o Waiver of premium
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Disability Income Insurance
Optional Disability Income Benefitso Social Security Offset Rider
o Cost of Living Rider
. Costly Rider
o Guaranteed Insurability Rider can purchase additional amount of insurance
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Group Disability Income Insurance
Short Term Planso 13 weeks to 2 years
o Weekly benefit amount normally 50 to 70 percent of earnings
o Short term elimination period of 1 to 7 days for sickness and accidents are
covered from the fist day of disability
Elimination period reduces the costs down and reduces absenteeism and
Laziness
o Covers only nonoccupational disabilities
o Partial disability is not covered
Long Term Plans
o 2 years to age 65o limited duration for disabilities after age 65
o Covers both occupational and nonoccupational
o Elimination period of 3 to 6 months
o Pension accrual benefit
o Monthly survivor Income benefit to spouse or children
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Social Security Disability Income Insurance
Eligibilityo Number of credits
Age 31 or older
Ages 24 thru 31 ( must have worked Half of the time)
Before age 24(6)
o 5 Months Waiting period
o Substantial gainful work and disability should last for at least 12 months ordeath. Claim will not be allowed if the person can engage in any othersubstantial work
Benefits
o Monthly benefits
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Government Health Insurance and Health Care Programs
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Government Health Insurance and Health Care Programs
Medicare ( part of OASDHI)
Medicaid
Workers Compensation
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Medicare
Covers medical expenses of most individuals of age sixty-five or older
To disabled individuals under age 65 for disability benefits for 24 months
Aged under 65 for long term kidney dialysis or kidney transplant
Part A Hospital Insurance
Part B- Supplementary Medical Insurance
Part C - Medicare + Choice Program
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Medicare- Part A
Inpatient hospital care
Skilled Nursing Facility Care
Home Health care services
Hospice Care ( Terminally ill)
Blood Transfusions (except first three pints)
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Medicare- Part A
Inpatient hospital care
o 90 Days + Lifetime reserve of sixty additional days
o 90 Days
First 60 days - Must pay an initial deductible
61-90 - A Daily coinsurance charge
o Life time Reserve
Skilled Nursing Care
o Must be hospitalized for at least 3 days
o Skilled Nursing care is provided
o Intermediate and Custodial nursing care are not provded
o A maximum of 100 Dayso First 20 Days: Covered services are paid in full
o Next 80 days: Daily Coinsurance must be paid
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Medicare- Part B
Voluntary program that pays for physicians fees, out patient hospitalservices etc
Part A automatically includes Part B, unless declined
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Medicare + Choice
Balanced Budget Act of 1997
Original Medicare
Original Medicare Plan with Supplemental Policy
Medicare Managed Care Plan
Private fee-for-Service Plan
Medical Savings Account ( MSA)
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Medicaid
Federal-State welfare program that covers the medicalexpenses of low-income persons, including those who are aged,blind, or disabled; members of families with dependant children;and pregnant women as well as certain children
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Workers Compensation
Social Insurance providing health and Disability Insurance toemployed workers
Covered employers pay benefits to workers who have a job relatedinjury or disease
Based on Liability with-out fault
Workers are not required to sue Employers
Benefits paid based on a schedule of benefits established by law
Eligibility
o Must be working in a covered Occupation
o Job related accident or disease
Benefits
o Medical expenses in full without Deductibles or Coinsurance
o Weekly disability income benefits with elimination period of 3-7 days
o Death benefits
o Rehabilitation services and Vocational retraining
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Thanks !!