{"id":295,"date":"2018-11-16T20:41:17","date_gmt":"2018-11-16T20:41:17","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/suny-personalfinance\/?post_type=chapter&p=295"},"modified":"2018-11-16T20:41:17","modified_gmt":"2018-11-16T20:41:17","slug":"10-2-insuring-your-health","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-personalfinance\/chapter\/10-2-insuring-your-health\/","title":{"raw":"10.2 Insuring Your Health","rendered":"10.2 Insuring Your Health"},"content":{"raw":"
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Learning Objectives<\/h3>\r\n
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  1. Define basic health care coverage and major medical insurance.<\/li>\r\n \t
  2. Identify the insured\u2019s responsibility for costs.<\/li>\r\n \t
  3. Describe the structure of health maintenance organizations.<\/li>\r\n \t
  4. Distinguish the different accounts for private health care financing.<\/li>\r\n \t
  5. Distinguish the different programs for public health care financing.<\/li>\r\n \t
  6. Explain the purpose of long-term care insurance.<\/li>\r\n<\/ol>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    Melissa is a medical transcriptionist who runs a cleaning service on the side. She usually clears about $24,000 per year from the cleaning service and has come to rely on that money. One day, Melissa slips on a wet floor. She is taken by ambulance to the local hospital, where she is treated for a badly broken wrist and released the next day. Melissa can\u2019t clean for about eight weeks, losing close to $6,000 in earnings.<\/p>\r\n

    Soon, medical bills start to arrive. Melissa is not concerned, because she has health insurance through her job as a medical transcriptionist. She is surprised to find out, however, that some of the costs of this accident are not covered, that she has a significant deductible, and that she\u2019ll also have to pay the difference between what the doctors billed and what the insurance will pay. Not only did she lose substantial cleaning earnings, but her out-of-pocket costs are mounting as well. This accident is beginning to be very costly.<\/p>\r\n

    Melissa is discovering that health insurance is a complicated business. The time to understand your health coverage is before you need it. When you are recovering from an accident or illness, you should not be concerned with your medical bills, yet you may have to be.<\/p>\r\n

    According to the National Coalition on Health Care (http:\/\/www.nchc.org<\/a>), \u201cSince 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period.\u201dThe Henry J. Kaiser Family Foundation, \u201cEmployee Health Benefits: 2008 Annual Survey,\u201d September 2008.<\/span> Even where employers \u201cprovide\u201d health insurance as an employee benefit, in other words, workers are paying an increasing share of the premium. In 2008, that share averaged 27 percent.National Coalition on Health Care, \u201cHealth Insurance Costs,\u201d 2009, http:\/\/www.nchc.org<\/a> (accessed May 3, 2009).<\/span> A 2005 \u201cstudy found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.\u201dDavid U. Himmelstein, Deborah Thorne, Elizabeth Warren, and Steffie Woolhandler, \u201cMedical Bankruptcy in the United States, 2007: Results of a National Study,\u201d American Journal of Medicine<\/em> 122, no. 8 (August 2009): 741\u201346.<\/span><\/p>\r\n

    Even if you think those numbers are exaggerated, it\u2019s still sobering, because no matter how much you try to take care of yourself and to be careful, no one can evade the pure risk of injury or illness. All you can do is try to shift that risk in a way that makes sense for your financial health.<\/p>\r\n

    Because of the increasing costs of health care and the increasing complexities of paying for them, the distribution and financing of health care is much discussed and debated in the United States, especially the roles of the federal government and insurance providers. Regardless of the outcome of this debate, momentum is building for change. You should be aware of changes as they occur so that you can incorporate those changes into your budget and financial plans.<\/p>\r\n\r\n

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    Health Insurance Coverage<\/h2>\r\n

    There are many different kinds of coverage and plans for health insurance. You may have group health insurance offered as an employee benefit or as a member of a professional association. Group plans have lower costs, because the group has some bargaining power with the insurer and can generally secure lower rates for its members. But group plans are not necessarily comprehensive, so you may want to supplement the group coverage with an individual health insurance policy, available to individuals and families.<\/p>\r\n

    Sufficient coverage should include basic insurance<\/strong>[footnote]Health insurance that covers the costs of physician expenses, surgical expenses, and hospital expenses.[\/footnote]and major medical insurance. A basic insurance policy will cover physician expense, surgical expense, and hospital expense.<\/p>\r\n\r\n