Transcript Health Insurance

1
Topic 15: Health Insurance
 Affordable Care Act
 Required to have insurance by March 31,
2014
 Subsidizes cost for “low income” individuals
 Up to $80,000 income in 2013 for family of
three
 Penalty for not having coverage
 $95 in 2014 increasing to 2.5% taxable income
in 2016
2
Topic 15: Health Insurance
 Affordable Care Act
 Children up to age 26 may continue
coverage on parents health insurance
 Eliminates use of pre-existing conditions
 Prohibits annual and lifetime limits on
policies
 Employers may offer rewards for wellness
programs participants
 Can’t use gender or health status in
determining premiums
3
Topic 15: Health Insurance
 Affordable Care Act
 Employers with more than 50 full time
employees
 If don’t offer coverage, pay fee of $2,000
per employee
4
Topic 15: Health Insurance
 Hospital, surgical and physicians
insurance
 Hospital: room and board up to $X per
day
 Surgeon: all or usual and customary
 Physicians: only in hospital
 Not the type of “health insurance” you
want
5
Topic 15: Health Insurance

Major medical insurance policy
 Covers most medical expenses
 Both in and outside of hospital
 High payment limit: $1 million/unlimited
 Deductible
 Usually $500 to $1,000 per year
 Often per person/per family ($500/$1,000)
 Coinsurance:
 For example, after deductible met, insured must pay
20% of next $5,000 of medical expenses per
person???
6
Topic 15: Health Insurance
 Major medical insurance policy
 Not covered






Chemical addictions
Cosmetic surgery
Glasses
Travel outside U.S. / Canada
Injuries covered by workers comp
Self-inflicted injuries
7
Topic 15: Health Insurance
 Medical insurance premiums
 Self-employed
 Deducted in calculating AGI
 Employees
 Must itemize
 Medical expenses must be > 7.5% AGI
8
Topic 15: Health Insurance
 Medicare
 Part A: Hospital
 Over 65
 Eligible for Social Security
 Automatically covered
 No cost
9
Topic 15: Health Insurance
 Medicare
 Part B: Doctors’ services
 Over 65
 Eligible for Social Security
 Must pay premium
 Premium increases with AGI
10
Topic 15: Health Insurance
 Medicare
 Deductibles
 Part A: Hospital
 $1,184 for first 60 days in 2013
 After 60 days, patient pays most of the cost
 No deductible for first 20 days at skilled
nursing facility
 After 20 days, patient pays most of the cost
11
Topic 15: Health Insurance




Medicare
Individuals pay monthly premium.
 Increases based on AGI
 $105/mo if AGI < $170,000; $336/mo if AGI >
$428,000
Covers 80% of:
 Doctor’s Services
 Ambulance Transportation
 Diagnostic Tests
 Outpatient Therapy Services
 Outpatient Hospital Services
 Medical Equipment and Supplies
$147 annual deductible in 2013.
12
Topic 15: Health Insurance
 Medicare
 Part D: Prescription drugs
 Anyone in Part A or B is eligible
 Annual premium increases as income
increases
 Covers large portion of initial costs and
extraordinary costs but not costs in the
middle (donut)
13
Topic 15: Health Insurance
 Medigap: Medicare Supplemental
 Must offer:
 Part A: up to one year hospitalization
beyond Medicare coverage
 Part B: pays 20% co-payment
 Can offer other benefits
14
Topic 15: Health Insurance
 Medicaid: provide medical care
for those who can’t afford to pay
 Administered by each state
 Must meet income/asset tests
 Five year look back rule on transfer
of assets
15
Topic 15: Group Medical Insurance
 Types of policies
 HMOs:
 Lower deductibles, co-payments
 Restricts selection of medical care providers
 PPOs:
 Lower deductibles, co-payments if select
“preferred provider”
 Point of service
 In network providers have lower
deductibles, co-payments if selected
16
Topic 15: Group Medical Insurance
 Tax advantages
 Employer deducts premiums
 Employee not taxed on premiums or
benefits received
 Individual payment of medical
expenses
 Must itemize
 Must exceed 10% of AGI`
17
Topic 15: Group Medical Insurance


COBRA
 For businesses with more than 20 employees, insured can
continue coverage if lost coverage due to
 Termination of employment (including retirement)
 Continue coverage for 18 months
 Dependent no longer covered due to
death/divorce/Medicare eligibility/dependency status
 Continue coverage for 36 months
 Employee must pay cost of coverage
 Pre-existing condition
 Up to 12 months in group policy for regular enrollment
 Covered if had prior health coverage including COBRA
Affordable Care Act
 Children under age 26 can remain on parents policy
18
Topic 15: Group Medical Insurance


HIPAA
 Individuals losing group coverage must be offered coverage
without pre-existing conditions
HSAs
 Require high deductible health insurance
 Family policy
 Deductible of $2,500; out of pocket $12,700 annual
max in 2014
 If you contribute
 Can deduct from AGI up to $6,550 for family policy
in 2014
 Extra $1,000 if over 55
 Once eligible for Medicare, can’t contribute
 Investing HSA funds
19
Topic 15: Group Medical Insurance


Coordination of benefits
 If both spouses insured, children covered by parent with
earliest birthday
Flexible Spending Account
 Limited to up to $2,500 of prescription drugs
 No longer covers OTC medications
 Can’t be used to pay medical insurance premiums
 Lose what you didn’t spend
 Grace options: either
 Allow extra two and one half months to spend funds
or
 Carry over up to $500 per year