Bellwork 1-1

1. Bellwork 1-1 • Think of a time when you have had to go to the doctor or hospital: • Did you think it was expensive? • How did you pay for it? • Did your family have insurance coverage? • Do you know what type of insurance? • Do you think having health insurance is worth while?

2. Risk Management Unit 8 Objective 7.01

3. Dealing with Life’s Little Risks • Individuals handle risks in three ways: • Prepare to bear the costs themselves • Use safety and avoidance measures to try to avoid costly incidents • Transfer risks to another party by purchasing insurance policies • Insurance is a risk-management technique, an arrangement in which an insured pays money to an insurer to gain protection against risks and compensation for losses.

4. Insurance to safeguard your Health • Health Insurance: • Key Terms: • Risk - Uncertain, unpredictable factors that can lead to losses or damages • Insurance - An arrangement in which an insured pays money to an insurer to gain protection against risks and compensation for losses • Policy - A written contract stating the arrangement between insured and insurer • Policyholder - A consumer who has purchased an insurance policy • Coverage - Potential risks and losses against which an insured is protected by a policy • Premium - A fee paid to an insurance company on a regular basis for coverage • Deductible - An initial amount paid by insured for a loss before insurance compensations begin

5. Insurance to safeguard your Health • Health insurance • Types of coverage • Medical benefits---pay a large part of hospital and surgical care, may also pay part of some other medical expenses (e.g., doctor’s visits) • Major medical---pays for long-term illness expenses after basic medical benefits limits have been reached (e.g., cancer). • Dental insurance---covers all/part of routine services (e.g., examination cleaning, X-rays) and some other procedures • Vision benefits---may cover all or part of eye examinations, glasses, and contact lens

6. Insurance to safeguard your Health • Health Insurance (Cont) • Disability insurance---supplies all/part of a worker’s pay if unable to work due to illness or injury; short-term vs. long-term; often a waiting period before payments begin • Long-term care insurance---intended to cover the costs of extended home nursing care and related expenses which are not covered by regular medical benefits • Accident insurance---covers costs from injuries that occur at an eligible location and/or time. Large group rates keep costs low, but do not cover illness. • Medigap insurance---Private insurance available to citizens 65 and older who have Medicare A and B plans. Covers the cost of co-payments and deductibles

7. Types of Insurance Assignment • You are to go to the following websites to investigate the different types of insurance: • Go to: http://www.ehealthinsurance.com/ehealthinsurance/individual/Intro.html and answer: • Follow the tutorial and write down key terms such as “deductible” and co-insurance” • In your own words explain how health insurance really works. • Go to: http://www.lifehappens.org/disability-insurance/ and answer: • Who needs it? • List and describe the 5 ways to protect your income? • List and describe the 3 ways to get disability insurance? • Go to: http://www.lifehappens.org/long-term-care-insurance-introduction/ and answer: • Who needs it? • List and describe the 5 ways to get protection? • List and describe the 4 ways care is delivered? • Go to: http://www.aflac.com/individuals/accident_insurance.aspx and answer: • What is accident insurance? • Why do I need accident insurance? • Describe the testimonial. • Go to: http://www.doi.idaho.gov/shiba/medigap.aspx and answer: • List and describe 3 things you learned about Medigap Insurance. • Put in PowerPoint and submit to Edmodo by end of class.

8. Bellwork 1-2 • Will's insurance policy will pay his expenses for hospitalization, surgeries, and doctors' care. Which type of health insurance coverage is this? • A. Accidental injury • B. Basic medical benefits • C. Long-term care • D. Major medical • Barry has been out of work for months because he has crippling arthritis. He receives monthly income from his insurance policy. Which type of insurance is this? • A. Accidental injury • B. Basic medical benefits • C. Disability • D. Major medical • Nate has insurance that covered part of the costs of his stay in a rehabilitation center. Which type of insurance is this? • A. Dental • B. Long-term care • C. Medical benefits • D. Vision

9. Insurance to safeguard your Health • Government programs • Medicare---the federal government pays some of the medical expenses of the elderly, ages 65 and older, and for some people with disabilities; client can choose managed Medicare called “Medicare Advantage” or get fee-for service • Medicaid---state and federal governments share the cost to pay certain medical bills for low-income persons • Children’s Hospital Insurance Programs (CHIP)---health insurance for children under eighteen whose parents earn too much to qualify for Medicaid, but not enough to buy private insurance. Federal funds are distributed by state programs to cover costs. • COBRA---Consolidated Omnibus Budget Reconciliation Act gives the right to pay one’s own premiums and continue employer-sponsored group health insurance plan for a limited time after leaving a job.

10. Insurance to safeguard your Health • Non-government programs---managed care • Health maintenance organization (HMO)---a health care group that provides health care services to members for a set fee and a small co-pay • Preferred provider organization (PPO)---an agreement between health providers with employers or insurers to provide services at a reduced rate to employees • Point of Service (POS) –members use a primary physician who refers them as needed to participating specialist or members can see non-participating specialist members. But, members pay more for to use non-participating health providers. • Fee for Services plan--- A plan in which an insured can select his/her own doctors and hospitals, pay costs at time of visit, and file form with insurance company for reimbursement of covered expenses. • Health Savings Account---Employer-sponsored plan where monies are automatically deposited before taxes into a savings account to cover predicted medical, dental, vision, and child care expenses for a twelve-month period; monies not spent within the year are transferred to the savings account provider.

11. Insurance to safeguard your Health • Choosing a health care plan • Seek the plan whose features best meets your needs • Co-payments---the percentage of costs you pay once the deductible is met. • Deductible---the amount of medical expenses you pay each term (usually one year) before insurance will cover any expenses. The higher the deductible the lower the premiums • Pre-existing conditions---expenses that are not covered because they existed when coverage began (e.g. pregnancy expenses for 10 months after the policy goes into effect) • Maximum benefit---The maximum dollar amount the insurance company will pay over the term and/or a lifetime. Chiropractic care often has a term limit and cancer expenses often have a lifetime limit.

12. Insurance to safeguard your Health • Choosing a health care plan (Cont) • Seek the plan whose features best meets your needs (Cont) • Open enrollment period---The period of time during which a person whose is eligible has to considered their options before enrolling without cost increases or exclusion. • Preauthorization---Insurance approval is required in advance for expensive and/or extensive tests, treatments, and/or surgery • Exclusions---Items that the insurance policy will not cover (e.g. cosmetic surgery, teen pregnancy, new treatments that do not yet have FDA approval) • Renewability---what extenuating circumstances would cause the insurance company to not renew your policy at the end of the policy contract period.

13. Insurance to safeguard your Health • Choosing a health care plan (Cont) • Review several policies to determine exclusions and deductibles • Consider the costs • Ask advice from others who have used the plan • Consider services that may/may not be covered---office visits, medical tests, maternity care, physical therapy, outpatient surgery, inpatient hospital services, prescription drugs, preventive care, and home health care

14. Government vs. Non-Government Insurance Assignment • You are to go to the following websites to investigate the difference between government and non-government insurance: • Go to: http://www.diffen.com/difference/Medicaid_vs_Medicare and answer: • Describe the Overview of both • Describe the Beneficiaries of both • Describe the Eligibility of both • Go to: http://www.ehow.com/how-does_4564612_cobra-insurance-work.html and answer: • What is COBRA? • Who can use COBRA? • How long does COBRA last? • How does someone sign up for COBRA? • Go to: https://www.uhcsr.com/SelfServiceSupport/Students/HealthInsurance101/InsuranceGlance.aspx and answer: • Describe Fee for Service Plans • Describe HMO’s • Describe PPO’s • Describe POS’s • Go to: http://patients.about.com/od/costsconsumerism/a/hsaccount.htm and answer: • What are HSA’s? • How do they work together with High Deductible Health Insurance Plans? • Put in PowerPoint and submit to Edmodo by end of class.

15. Bellwork 1-3 • Mark recently left his job, but a law makes him eligible to keep his same health insurance for up to 18 months if he is willing to pay for it. Which insurance policy feature is this? • A. COBRA • B. FTC • C. HMO • D. MEDICAID • Janet can choose her doctors, pay for the services during her visit and then file insurance for reimbursement. Which insurance plan is this? • A. Fee-for-service plan • B. Health benefits • C. Point-of-service • D. Preferred provider • When Ben selects health insurance for his employees, he wants the policy to include a feature that the policyholder and insurer will each pay a portion of the cost of the medical bills.  Which insurance policy feature is this? • A. Adjustable • B. Deductible • C. Guaranteed • D. Right to transfer

16. Insurance to safeguard your family in the event you die • Life insurance • Term insurance- provides insurance for a specific period of time • Relatively low cost • Policy benefits: young person can buy a large amount of coverage for minimum money • No investment benefits • Types • Level term- premiums and death benefits stay the same for the life of the policy • Decreasing term- premiums stay the same but the benefits decrease over the life of the policy e.g. for home mortgage • Renewable term- the insured person can renew the policy without taking a physical • Convertible term- the insured person can change the policy from convertible to permanent without taking a physical, tends to be more expensive • Permanent life insurance (also called cash value life insurance) provides coverage the person’s entire life and includes an investment component

17. Insurance to safeguard your family in the event you die • Life Insurance (Cont) • Whole-life insurance- provides insurance for whole lifetime as long as premiums are paid • More expensive than term insurance because one pays for premium plus an investment • Policy benefits---insurance coverage for a lifetime as long as all premiums are paid • Investment benefits---grows in cash value as premiums and interest accumulate; one can borrow against it at low interest rate and receive some/all of cash value if change policies • Types • Limited-payment life-- coverage for entire life but premiums are higher than whole life because premiums are paid for a set number of years or until a set age • Universal life--- allows adjustments of premium, face value, and level of protection • Variable life---premiums are fixed, but face amount varies with investment results

18. Insurance to safeguard your family in the event you die • Things that affect the cost of life insurance • Family health history • Pre-existing conditions • The policyholder’s current health • The policyholder’s occupation and hobbies (e.g. race car driver) • Gender (women live longer than men and pay lower premiums) • Age of insured (the older the insured, the more the premiums cost)

19. Insurance to safeguard your family in the event you die • Things (risks) to consider when selecting the amount of insurance coverage: • Present and future earnings of the policyholder • Financial responsibilities of the policyholder • Potential income from other sources • Dependents, their ages and their needs • Burial expenses • Debts

20. Life Insurance Assignment • You are to go to the following website and answer the related questions: • Go to: https://www.metlife.com/individual/insurance/life-insurance/index.html?WT.ac=GN_individual_insurance_life-insurance#overview • Under the following tabs answer: • Overview – What four things can life insurance pay for? • Two Types – Tell me the Term Life Basics and Permanent Life Basics. How can they be used together? • FAQ – How much insurance do I need? How much will life insurance cost me? How can I save money when buying life insurance? What are the tax advantages of life insurance? • Under “Whole Life Insurance” tab answer: • Basics – “Whole life insurance can be right for you if you want..” and “Some things to consider about whole life insurance” • Under “Universal Life Insurance” tab answer: • Basics - “Universal life insurance can be right for you if you want..” and “Some things to consider about universal life insurance” • Under “Variable Life Insurance” tab answer: • Basics - “Variable life insurance can be right for you if you want..” and “Some things to consider about variable life insurance” • Put in PowerPoint and submit to Edmodo by end of class

21. Bellwork 1-4 • Mark has term life insurance that is about to expire; his policy allows him to modify the policy to make it permanent without taking a physical exam. Which type of insurance is this? • A. Convertible • B. Decreasing • C. Level • D. Renewable • Trish plans to pay life insurance premiums for only a few years but have coverage for her full life. Which type of insurance is this? • A. Limited-payment life • B. Universal life • C. Variable life • D. Whole life • Max received an annual statement that says the whole life policy he owned for ten years is now worth $1000. Which insurance policy feature is this? • A. Cash value • B. Dividends • C. Face value • D. Premiums

22. Insurance Worksheets • Go to my website: • Under Unit 8, Objective 7.01 find “Insurance Worksheets” • Complete and submit to Edmodo by end of class