6.03 Health and Disability Insurance

Health Insurance

Health insurance, which provides protection against financial losses resulting from injury, illness, and disability, may cover:

• Hospital stays
• Surgery
• Dental work
• Vision
• Long-term care
• Prescription drugs

Coverage depends upon the policy because the terms vary among different health care policies.

Health insurance is usually purchased through a person's employer, although it can also be purchased individually.

Children may be covered under their parent's health insurance until they are 26.

→ »

Types of Health Insurance

Doctors, hospitals, and insurance companies have been searching for models that are efficient, profitable, and provide wide access.

Below is an overview of the most popular plans that are now available. Keep in mind that health insurance is a hot topic, and each year new plans and types of coverage are introduced. In fact, many U.S. Presidents have considered it a priority to change how health plans work in order to provide universal access similar to other countries, including Canada, Switzerland and the United Kingdom.

In 2010 the Affordable Care Act (ACA, or more commonly known as Obamacare) was enacted, which significantly changed the health care system. However, many people feel the changes still do not ensure adequate coverage and arepushing for a type of universal healthcare system that provides care for all citizens.

In the health maintenance organization (HMO) model, you must use health care providers associated with the HMO. If you go to a provider outside of the network, you must get preapproval. Many people find HMOs restrictive and their popularity has declined recently.

A more common type of health plan is the preferred provider organization (PPO). Unlike an HMO, a PPO lets you choose a doctor or hospital. However, there is a group of preferred providers, doctors, and hospitals that are part of the plan. When you see this group of providers, most or all of your health care needs are covered by the plan, though some charge deductibles or fees for certain services. Blue Cross and Blue Shield of Alabama is an example of a PPO.

Medicare is a program administered by the federal government primarily for persons age 65 or older, and those with certain covered disabilities. It provides a variety of coverage, including hospital stays and some prescription coverage.

Medicaid is a federal program for individuals and families with low incomes and resources. Medicaid does not pay benefits to individuals directly but to health care providers. Only US citizens or legal permanent residents are eligible for Medicaid.

« → »

Obamacare

Obamacare is not a health insurance plan. It is a law that reformed the health insurance marketplace in order to achieve the goal of every citizen having access to affordable healthcare. Obamacare has critics on both sides of the political spectrum. Critics on the right argue that Obamacare is an unnecessary intrusion by government into the market which will result in higher costs and more inefficiency. Critics on the left believe that Obamacare doesn't go far enough and demand a single payer system healthcare for all citizens provided by the federal government .

According to Obamacarefacts.com, Obamacare made the following major changes to the Healthcare system:

• Prohibits insurance companies from dropping your coverage if you get sick or make an honest mistake on your application.
• Eliminates pre-existing conditions and gender discrimination as reasons to decline coverage or raise rates so that you can't be charged more based on your health status or gender.
• Lets young adults stay on their parents' plans until age 26.
• Protects against unjustified rate hikes and give you more rights to appeal insurance company decisions.
• Created Health Insurance Marketplaces where low-to-middle income Americans can compare plans and get lower costs on health insurance.
• Expanding Medicaid to 15.9 million Americans to help "cover the gap" between those who qualify for cost assistance through the marketplace and those who qualified for Medicaid under previous Medicaid guidelines.
• Mandates that everyone who can afford it must obtain and maintain health insurance (known as minimum essential coverage) throughout the year starting in 2014, get an exemption, or pay a per-month fee on their year-end Federal income taxes.
• Coverage can only be obtained during an annual open enrollment period. Annual open enrollment periods vary by insurance type.

« ← → »

Challenges to Obamacare

Several lawsuits were filed challenging the legality of Obamacare. In 2012, the US Supreme Court upheld the core tenets of Obamacare.

Republicans in the House of Representatives have voted several times to repeal Obamacare, but those efforts have failed in the Senate, and surely would not survive a veto from President Obama.

The 2016 Presidential race saw healthcare once again become a huge topic of debate among the candidates.

« ← → »

Disability Insurance

According to the Insurance Education Foundation, one out of ten people will become disabled before age 65.

Insurance is available to prevent the risk of losing income due to a disability. Disability insurance replaces a portion of one's income if they become unable to work due to illness or injury.

The insurance typically pays between 60% - 70% of one's full time wage. Many employers offer disability insurance as part of the benefits package.

« ← »

Long-Term Care Insurance

As Americans are living longer than ever, the need for end-of-life care is increasing. Nursing home costs are rising rapidly so many Americans are turning to long-term care insurance.

Long-term care insurance will pay for stays in a nursing home or for in-home care. These policies typically pay between $50 and $350 per day in a nursing home.

Premiums are typically lower the younger you decide to purchase Long-Term Care insurance. Don't wait too long since many insurance companies will not allow you purchase it at all after a certain age, usually close 80 years old.

« ←