Health Insurance is also referred to as medical insurance or healthcare insurance. It covers a portion of the cost of a policyholder’s medical costs. How much the insurance covers (and how much the policyholder pays via copays, deductibles, and coinsurance) depends on the details of the policy itself, with specific rules and regulations that apply to some plans.
02.
Why do I need Health Insurance?
If you don’t have health insurance and you end up needing medical care, you can be left with insurmountable medical bills or even face situations in which medical providers refuse to treat you.
Only screening and stabilization in a hospital emergency department are guaranteed if you’re uninsured (and the hospital and providers can still bill you for the costs). Other than that, it’s up to the provider to decide whether to treat you if your ability to pay for the care is in question. Even if your out-of-pocket costs seem high under the health plans available to you, having a health insurance card might make the difference between being able to obtain care or not.
It's also important to understand that you cannot just purchase health insurance when a medical need arises. Regardless of whether you’re buying your own coverage or enrolling in a plan offered by an employer, there’s an annual open enrollment period that applies and enrollment outside of that window is limited to special enrollment periods triggered by qualifying events.
To simplify, there are 2 major categories of health insurance: Managed Care plan and Fee-forService Plan. Generally speaking, these 2 categories cover a multitude of medical, surgical and hospital expenses. Some also cover prescription drugs and dental coverage.
Managed Care Plan – include products such as HMO, PPO, EPO, POS or sometimes a hybrid model. As markets change, managed care plans have became increasingly desirable mainly due to more streamline and comprehensive health service structures. Private insurer will manage and oversee the provision of services, the quality of the care provided, the reimbursement system, the provider network, and rules such as prior authorization or step therapy. Financial incentives are usually offered to the members who uses the providers in their plan.
Fee-for-Service Plan – also known as traditional indemnity insurance, is a common and familiar way to pay for medical care. For each service you receive, your insurance company pays a fee to the doctor or facility that provided it. There are no provider networks and no referral requirements. This lack of structure give you many options as a patient but can also make for extra work on your part. How does it work?
You go to the doctor for a medical treatment
To get paid for that treatment, the doctor files a claim with your insurance company
If you’ve already met your insurance deductible, the insurer pays most of the doctor’s fee
You pay the remainder of the fee out of pocket as coinsurance
04.
What is Medicare Insurance?
Medicare is an example of Fee-for-Service plan that do have network providers. You can still see any doctor for primary or specialty care without a referral, but you may pay less by choosing one who’s in network.
Medicare is a federal health insurance program for:
People who are 65 or older
Certain younger people with disabilities
People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)
Medicare Part A (Hospital Insurance) – covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
Medicare Part B (Medical Insurance) – covers certain doctor’s services, outpatient care, medical supplies, and preventative care services.
Medical Payments Coverage – If you, your passengers or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for costs associated with the injuries. Covered costs may include hospital visits, surgery, X-rays and more.
Medicare Part D (Prescription drug coverage) – cover the cost of prescription drugs (including many recommended shots or vaccines).
Long-term care refers to a host of services that aren’t covered by regular health insurance. This includes assistance with routine daily activities like bathing, dressing or getting in and out of bed. Long-term care insurance is designed to bridge the gap and cover costs health insurance won’t.
A long-term care insurance policy helps cover the costs of that care when you have a chronic medical condition, disability or disorder such as Alzheimer’s disease. Most policies will reimburse you for care given in a variety of places such as:
Your home
A nursing home
An assisted living facility
An adult day care center
06.
Why do you need Long-Term Care Insurance?
Considering long-term care costs is an important part of any long-range financial plan, especially in your 50s and beyond. Waiting until you need care to buy coverage isn’t an option. You won’t qualify for long-term care insurance if you have a debilitating condition, and long-term care insurance carriers won’t approve most applicants older than 75. Most people with long-term care insurance buy it in their mid-50s to mid-60s.
Nearly 70% of 65-year-olds will eventually need long-term care services or support, according to 2020 data from Administration for Community Living, part of the U.S. Department of Health and Human Services. Women typically need care for an average of 3.7 years, while men require it for 2.2 years.
Long-term care costs can deplete a retirement fund quickly. The median cost of care in a semiprivate nursing home room is $94,900 per year, according to Genworth’s 2021 Cost of Care Survey
In general, disability insurance covers some of your income if something happens to you (like an illness or injury) and you can’t work.
The younger and healthier you are, the easier it is to qualify for a policy. But as you age, premiums increase. And if your health goes south, you may find it hard to qualify for an affordable policy at all.
Disability insurance doesn’t just cover rare accidents. Most claims are for things you may not realize are considered disabilities such as a heart attack, physical injuries or cancer. These things could happen to anyone in any workplace.
The Social Security Administration (SSA) reports that one in 4 of today’s 20-year olds will become disabled for 90 days or more before they turn 67 years old. Approximately 68% of non-government workers have no disability insurance.
08.
What are the types of Disability Insurance?
Long-Term Disability Insurance (LTD) – have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life. Whether you’re working at a desk or a construction site, you’ll want something in place until you turn 65.
Short-Term Disability Insurance (STD) – have a waiting period of 0 to 14 days with a maximum benefit period of no longer than 2 years.
Disability is a common cause of people declaring bankruptcy. Even though Social Security Disability Insurance (SSDI) and Worker’s Compensation can offer some assistance to someone who qualified (which is not easy to do with SSDI), they usually don’t provide enough income to meet all of your expenses, which is what makes disability insurance a critical component of any long-term financial plan. Replace with Replace with Feel free to crop to the size you need to better fit the dimension. People who support their family or work for themselves should look into disability insurance. Some examples are: sole provider of the family, people in physically demanding roles, aging parents, those with recurring injuries, musculoskeletal disorders, cancer, pregnancy, mental health issues.
10.
Key differences between Long-Term Care Insurance (LTCI) vs Disability Insurance (DI)
People often confuses Long-Term Care Insurance and Disability Insurance. Long-Term Care Insurance protects your assets from the financial burden of a long term care event such as developing alzheimer’s. Disability Insurance protects your income in the event you can no longer work due to a disability or illness; for example, when requiring physical therapy after an accident.
LTCI covers the cost of home care, assisted living, or nursing home care when you need care for an extended period of time. It can also cover the cost of home modifications and devices to help you stay at home longer. LTCI will not pay your mortgage if you stay in your home or standard bills.
DI covers the cost of your mortgage, bills, groceries, etc. but on a reduced income.
To determine the types of health coverage for your needs and purposes, contact us today to schedule a time to review your situation to find the right plans.
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