medical insurance copyright texas education agency, 2014. all rights reserved. 19

Medical Insurance

Copyright © Texas Education Agency, 2014. All rights reserved. 19

The Importance of Medical Insurance

Medical insurance provides payment to cover financial loss as a result of illness or injury.


Sources of Medical Insurance 1) Two Government

Programs Medicare for individuals

over 65 years of age or disabled individuals who qualify for social security

Medicaid-for low-income individuals that covers blind, disabled and needy families with dependent children

2) Employer-provided insurance where there is a group plan and the employer covers some or most of the cost

3) Private insurance where a person purchases health insurance through a private company

Copyright © Texas Education Agency, 2014. All rights reserved.

Indemnity Plans versus Managed Care Indemnity plans

allow participants to seek health care from any qualified medical provider

Managed care plans limit participants to a specific list of providers


Group Plans Group plans cover a

large group of individuals, such as all the employees of a particular company or local government.

Within a group, individuals’risk is spread across the entire pool of members.


Pre-existing Conditions

Insurance policies may exclude coverage for pre-existing conditions or health conditions that existed before the policy was granted.


Premium

Premium is an amount paid periodically to the insurer by the insured for covering his risk.

You and/or your employer usually pay it monthly, quarterly or yearly.


Deductibles The amount you owe for covered health care

services before your health insurance or plan begins to pay.

Many policies limit the total amount they will pay for some procedures

Some companies cover only certain drugs or provide partial payment for unapproved drugs

Many policies have a co-pay, where the policyholder pays a set amount for a doctor visit or emergency room visit


Or there’s coinsurance

Coinsurance- Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service

You pay coinsurance plus any deductibles you owe.

Ex/ a $100 office visit, your coinsurance =20% so you pay $20 and the insurance co. pays the rest.


Provider Networks Two most common

networks Health

Maintenance Organizations (HMO’s)

Preferred Provider Organizations (PPO’s)


Both HMO’s and PPO’s provide a list of providers. HMO’s usually provide a more limited list.

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Comparison of Insurance PlansType of Health Plan Premium Selection of Physician

Indemnity Plan High Flexibility to select a physician or specialist

Managed CareHMO

Relatively low Primary care physician refers the patient to specialist

Managed CarePPO

Low, but usually higher than HMO

Greater number of physicians to choose from with PPO’s than HMO’s


Disability Insurance

The ability to earn a living is one of your most valuable assets. Disability insurance covers your wages if you are in an accident or too ill to work for an extended period of time.


Questions?


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