Financial Futures ch 9/10

amount you pay/month or year as an owner

an agreement between you and an insurance provider that in exchange for premiums, the insurer will pay $ to loved ones when you die

contract between you and the insurance company

owner of the policy

whose life is covered by the policy

amount paid to beneficiaries when insured passes away

people chosen to receive the death benefit

covers the life of insured for a specific period of time (inexpensive but gets more expensive the older you get)

covers the life of the name insured for the remainder of their life (investment portion that allows policy to have a cash value)

young professionals, newlyweds, parents, children (potentially retirees)

if they have enough $ to pay off their debt in their estate

type, age, gender, personal/fam history, weight, smoker?, lifestyle, traveling to dangerous parts of the world

10-12x annual salary OR enough to enable your family to continue to live in the same house for at least 3 years

contract between you and the insurance company designed to provide an income guaranteed for the rest of your life

savings account held by the insurance company (interest rate around 5%)

invested in mutual funds by the insurance company (interest rates depend on the success of the fund-paid for by single large payment or multiple payments over a number of years)

receive $ right away

receive $ @ some point in the. future

payments for the rest of your life

receive payments for a set period of time (5-25yrs)

sickness, injury, and preventative care

does not cover 100% of your costs. It is designed to share costs with you up to a certain point

-The certain point that is reached with health insurance.

-After you reach the out-of-pocket limit, health insurance will pay 100% of your health care costs

you can stay on your parent's health insurance plan until 26

Your plan may have a family deductible in addition to individual deductibles for each family member

you can use COBRA to continue your previous employer's coverage your previous employer's coverage until you're able to find a new plan

-some health insurance premiums are tax deductible for the self-employees

may qualify for Medicaid

may qualify for health care through the veterans affairs (VA)

qualify for Medicare

-you and your family are covered by TRICARE

-married but don't have kids- you and your spouse may want to purchase separate health insurance policies

-you aren't required to have a family plan

1.Ambulatory patient services (outpatient care you can receive without being admitted to a hospital)

2. emergency services

3. hospitalization for surgery, overnight stays, and other conditions

4. pregnancy maternity, and newborn care

5. Mental health and substance use disorder services

6. prescription drugs

7. Rehabilitative and habilitative services and devices (treatment devices that help people gain or recover mental and physical skills after an injury, disability, or onset of an chronic condition)

8. Laboratory services

9. Preventive and wellness services and chronic disease management

10. Pediatric services, including dental and vision coverage for children

-public health insurance

-private health insurance

Medicaid, Medicare, and CHIP

most people have some form of private health insurance purchased through a marketplace from an employer

-sold on government-run exchanges (state exchange, federal exchange =healthcare.gov)

-must cover the 10 essential benefits plus any additional services mandated by your state government

-these are the only plans for which government subsidies are available for qualifying applicants

-sold directly by health companies through a 3rd party broker, or by a privately-run health insurance marketplace

-must cover the 10 essential benefits and follow other rules dictated by the Affordable Care Act

-cannot apply or use government income,

- this is the type of health insurance you would use in most cases (decent income)

-you are covered by employer-provided health insurance

-also called group plans

-these are private plans purchased and managed by your employer

-because they are group plans, employer-provided health insurance is usually more affordable than comparable individual plans

-group plans have lower premiums and deductibles

-provides limited health care coverage for a temporary gap in coverage

-does not have to provide all 10 essential benefits

-federal health insurance program for americans above 65

-4 parts:

-Part A- impatient (hospital) care for which most people pay no premiums

-Part B- outpatient care- 2021 monthly premium =$148.50 -Part C- (Medicare Advantage) allows you to buy into private health insurance -Part D- prescription drug coverage

-Medicaid-federal & state health insurance program for low-income families & individuals

-Eligibility requirements are established by each state

-CHIP is designed to cover children below 18

-Aimed at families who's income is too high for Medicaid but too low for private health insurance

-all private health insurance plans- whether they're on-exchange or off-exchange partner with networks of health care providers

-The way each plan works within the network can vary significantly, so pay attention when purchasing

-HMOs are the most restrictive type of plan when it comes to accessing your network of providers

-you have to choose a primary care physician (PCP) that is in-network

-All of your care will be coordinated by your PCP, and you'll need a referral from your PCP to see a specialist

-HMOs DO NOT cover any out-of-network health care costs

-cheaper premiums that offer types of private health insurance plans

-combo of HMOs and PPos

-no referral needed to see a specialist

-do not cover out-of-network physicians

-premium is more than HMOs, but less than PPOs

-combo of HMOs and PPOs

-premium is more than HMOs but less than PPOs

-PPOs are less restrictive than HMOs

-easier to access your network of providers and get care from outside the plan's network

-option between an in-network doctor (lower cost) or an out-of-network doctor (higher cost)

-no referral needed to see a specialist

-typically more expensive than other types of private health insurance plans

-all health insurance plans split some of the costs between the insurer and the consumer

-the tiers have nothing to do with the quality of care you can access; they're all about the money

-specifically, the amount paid for deductible, coinsurance, and copayments

the amount you pay (usually monthly) for health insurance coverage

-the lower the premium, the more additional out-of-pocket costs you'll have and vice versa

amount you need to pay out-of-pocket before your health insurance kicks in

-usually once the deductible is met, you'll still need to pay copayments and coinsurance until you hit the out-of-pocket maximum

a fixed amount you pay for a specific service or prescription drugs

a percentage of that cost that you pay for covered services

the most you have to pay for deductibles, copays, and coinsurance count towards your maximum out-of-pocket

-premiums do not

-Dental- relatively inexpensive

-Vision- covers regular eye exams, eyeglasses, and contact lenses

-major eye surgeries, such as cataract surgery, are usually covered by your health insurance

-Gap insurance- a supplemental health insurance policy that helps you pay for out-of-pocket costs associated with your health care expenses

-critical illness insurance- pays for expensive illness that impacts you and your ability to earn $ for multiple years -examples include Alzheimer's disease, cancer, & stroke

-lets assume your annual deductible is $5,000; annual out of pocket is $6,000 and your coinsurance is 20%

-you incur $50,000 in hospital bills for an illness or injury 1. you pay the 1st $5,000-thats your annual deductible

2.then you pay 20% of the balance

%50,000-$5,000 = $45,000 x20% =$9,000 3.your out of pocket limit is $6,000 so you would only pay an additional $1,000 -you would pay $6,000 and the insurance company would pay $44,000

-pays a portion of your monthly income if you can't work due to illness or injury

-you are required to pay a monthly premium

-if you cannot work, you file a claim in order to receive the benefit

the length of time you will receive the benefit

-benefits are tax free if purchased from a private insurer

-may be taxable if they are from an employer-sponsored policy

-covered entirely by your employer (only the employer pays premiums)

-covers injuries while you are at work performing the duties of your job and work-related illness

-covers you regardless of where and how you sustain an injury

-if you receive an injury at work that is covered by workers' comp, you can still submit a disability claim to your private insurer, but your benefits will probably be reduced

-an injury or illness will qualify you for disability insurance benefits if you are either mentally or physically unable to complete your job, or if you have an impairment that substantially limits your ability to carry out basic life activities

items that are not covered

-pre-existing conditions

-you can only qualify if you have paid social security tax for a certain length of time

-very strict definition of "disability"...you must be totally disabled

-in 2017, 70% of all social security disability insurance claims were denied

-if you do qualify, it can take up to 2 years to receive benefits

-Short term

-Long term

-Social security

- Benefit period: 3-6 months

- Coverage amount: 80% of monthly income

- Buy from: Employment sponsored

- Benefit period: 2, 5, 10 years of till retirement

- Coverage amount: 60% of monthly income

- Buy from: Employment sponsored or individual policies

- Benefit period: As long as you're disabled

- Coverage amount: percentage of income; ave $1258 a month - Buy from: Government supplied