12.

Health and Disability Insurance

Health Care Problems in US Private Health Insurance Providers Basic 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 Insurance

Commercial Insurers Blue Cross and Blue Shield Plans
o Non-Profit Plans

o Sponsor Managed Care Plans such as HMOs and PPOs

Self-Insured Plans
Retention Plans o Stop-Loss Insurance o TPAs
o

Health Insurance Costs may be reduced or increase less rapidly Cash flows of the premium Savings can be invested

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Health insurance Plans

Basic Medical Expense Coverages
o 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 o Medical expenses resulting from illness or injury that are not covered by basic medical expense plan Two types
Supplemental Major Medical Insurance Plan (Corridor Deductible) Comprehensive major Medical Policy (Basic + Major - Treats as one policy)

Deductibles
Calendar year Deductible Family Deductible Deductible Carryover Provision Common accident Provision Corridor Deductible

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 the basis

Deductible Carryover
o Covered medical expenses of the last 3 months of the calendar can be carried over to 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 Insurance major-Medical Expense Group Health Insurance Program. Plan offers a limit of 250,000 Health Insurance Offers the plan with various Deductibles as follows
o o o o o Case a: Calendar year Deductible per person of $250 Case b: Calendar year Deductible per person of $250 but 2 persons Satisfaction of Deductible 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 Case d : Calendar year Deductible per person of $250 but with Common accident Provision 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 accident
How 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

Portability-HIPAA
Limiting Coverage for pre-existing condition ( Exception: Pregnancy, newly born Children, 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 Nursing Care

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 usually restricted 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 o o o

Lowers healthcare Costs Members pay little or no out-of-pocket costs Loss Prevention Services 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
o
o Individual Disability Income Insurance

Group Disability Income Insurance

Social security Disability Income Benefits

Individual Disability Income Insurance

o

Total Disability

o
o o o

Residual disability
Elimination Period Benefit Period Renewability of the policy
Guaranteed

Renewable renewable

Non-Cancelable Conditionally

Waiver of premium

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Disability Income Insurance

Optional Disability Income Benefits
o o o Social Security Offset Rider Cost of Living Rider

. Costly Rider
Guaranteed Insurability Rider can purchase additional amount of insurance

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Group Disability Income Insurance

Short Term Plans
o o 13 weeks to 2 years Weekly benefit amount normally 50 to 70 percent of earnings

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 o

Covers only nonoccupational disabilities Partial disability is not covered

Long Term Plans

o o 2 years to age 65 limited duration for disabilities after age 65

o
o o o

Covers both occupational and nonoccupational

Elimination period of 3 to 6 months Pension accrual benefit Monthly survivor Income benefit to spouse or children
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Social Security Disability Income Insurance

Eligibility
o Number of credits
Age 31 or older Ages 24 thru 31 ( must have worked Half of the time) Before age 24(6)

5 Months Waiting period

o Substantial gainful work and disability should last for at least 12 months or death. Claim will not be allowed if the person can engage in any other substantial 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 o 90 Days + Lifetime reserve of sixty additional days 90 Days

First 60 days - Must pay an initial deductible

61-90
o

- A Daily coinsurance charge

Life time Reserve

Skilled Nursing Care

o o o o o Must be hospitalized for at least 3 days Skilled Nursing care is provided Intermediate and Custodial nursing care are not provded A maximum of 100 Days First 20 Days: Covered services are paid in full

Next 80 days: Daily Coinsurance must be paid

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Medicare- Part B
Voluntary program that pays for physicians fees, out patient hospital
services 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 medical expenses 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 to employed workers Covered employers pay benefits to workers who have a job related injury 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
o o o o

Job related accident or disease

Medical expenses in full without Deductibles or Coinsurance Weekly disability income benefits with elimination period of 3-7 days Death benefits Rehabilitation services and Vocational retraining

Benefits

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Thanks !!

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