CC3152_L06_ch9+ - LECTURE 6 HEALTH INSURANCE CC3152...

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CC3152 Principles of Financial Planning LECTURE 6 HEALTH INSURANCE
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5-2 Importance of Health Insurance [LG1] ! Protect against economic loss in the event of serious accidents or illnesses. ! Protect against the rising cost of health care, which is outpacing other costs in general.
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5-3 Private Health Insurance Plans [LG2] ! health care contracts written between a group (usually an employer, college or university, or other organization) and an insurance company. ! coverages are subject to negotiation between the group and the insurer. ! most health care coverages are available except disability coverage ! Usually the employer will pay all or part of the premiums. Group health Insurance
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5-4 Private Health Insurance Plans ! provide protection directly to the policyholders and/or their families. ! coverages can be tailored to their needs. Individual Health Insurance
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5-5 Private Health Insurance Plans Traditional Indemnity Plans ! Also called fee-for-service plans. ! Insurance company is separate from the health care provider. ! Typically offer unlimited choice of doctors and hospitals. ! Insured paid an annual deductible, after which the medical costs are reimbursed for a percentage (usually 80%). ! Reimbursements based on “usual, customary and reasonable” (UCR) charges.
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5-6 Private Health Insurance Plans Managed Care Plans ! Monthly payments made directly to health care providers. ! Designated group of doctors and hospitals provide services. ! Plans minimize costs by controlling amount of care provided and emphasizing prevention of illness. ! Charge monthly fees plus copayments (small fees) for services.
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5-7 Health Insurance Decisions [LG3] 1. Evaluate your healthcare cost risk " 2 types of losses from illness or accidents: Medical care and rehabilitation expenses (~$1m) Loss of income from disability (~60%-75% of monthly earnings)
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Health Insurance Decisions " A good health insurance plan also incorporates other means of risk reduction.
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CC3152_L06_ch9+ - LECTURE 6 HEALTH INSURANCE CC3152...

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