FHCE 2100 Lecture Notes - Lecture 26: High-Deductible Health Plan, Copayment, Health Maintenance Organization

14 views2 pages

amaranthsquirrel732

26 Oct 2016

School

University of Georgia

Department

Financial Planning, Housing and Consumer Economics

Course

FHCE 2100

Professor

Dr.Kabaci

For unlimited access to Class Notes, a Class+ subscription is required.

Considerations for Health Insurance

- Look at list of providers

- Look at obvious health insurance costs

• Premium, deductible, co-insurance, co-payments

- Search for less obvious health insurance costs

• Services provided by a doctor or hospital that is not part of your pla’s etork

• Limits for specific kinds of care, such as certain # of visits for PT per benefit period

• OTC drugs

- Tips for calculating your total health insurance cost

• Deductibles – if you have different levels to choose from, pick the highest deductible

amount that you can comfortably pay in a calendar year

• Office visits – estimate total # of in-etork dotor’s isits you ill hae i 1 year ased o

a pla’s opayet, add up your total ost

• Prescriptions – add up your monthly cost that will not be covered by the plan you are

looking for (add in copayments)

• Other care – figure in dental, vision, etc. (may want to consider a plan that covers these

costs

Background – John & Marsha

- Unfortunately Lara has developed severe allergies and must see an allergy specialist on a regular

basis

- John and Marsha were worried that Lara had asthma which could have been far more serious.

- They had hose to hae health isurae through Marsha’s eployer eause the eployer

offered better policies at lower rates

- Reetly Marsha’s eployer has set out iforatio aout ireases i preius ad other

changes to the company sponsored health insurance plan benefit

- So o they eed to ealuate Marsha’s eployer sposored health isurae optios that are

now available

- Their options are listed below: TIME FRAME FOR THEIR DECISION IS ONE YEAR

Their Options

- ACTION A

• POS (point of service) plan with a monthly premium of $450

o The deductible is $900 maximum and a $20 co-payment of office visits after

deductible is met

- ACTION B

• A HMO plan with a monthly premium of $325

o There is no deductible and a $15 co-payment of office visits

- ACTION C

• A high deductible health plan (HDHP) with a monthly premium of $100

o There is a deductible of $3,000

o After the deductible is met, 90% of UCR (usual, customary, and r

The Outcomes

find more resources at oneclass.com

Unlock document

This preview shows half of the first page of the document.
Unlock all 2 pages and 3 million more documents.

Already have an account? Log in

Document Summary

Look at obvious health insurance costs: premium, deductible, co-insurance, co-payments. Search for less obvious health insurance costs: services provided by a doctor or hospital that is not part of your pla(cid:374)"s (cid:374)et(cid:449)ork, otc drugs. Tips for calculating your total health insurance cost: deductibles if you have different levels to choose from, pick the highest deductible. Unfortunately lara has developed severe allergies and must see an allergy specialist on a regular basis. John and marsha were worried that lara had asthma which could have been far more serious. They had (cid:272)hose(cid:374) to ha(cid:448)e health i(cid:374)sura(cid:374)(cid:272)e through marsha"s e(cid:373)ployer (cid:271)e(cid:272)ause the e(cid:373)ployer offered better policies at lower rates. Re(cid:272)e(cid:374)tly marsha"s e(cid:373)ployer has se(cid:374)t out i(cid:374)for(cid:373)atio(cid:374) a(cid:271)out i(cid:374)(cid:272)reases i(cid:374) pre(cid:373)iu(cid:373)s a(cid:374)d other changes to the company sponsored health insurance plan benefit. So (cid:374)o(cid:449) they (cid:374)eed to e(cid:448)aluate marsha"s e(cid:373)ployer spo(cid:374)sored health i(cid:374)sura(cid:374)(cid:272)e optio(cid:374)s that are now available. Their options are listed below: time frame for their decision is one year.

Related Questions

Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the companyâs health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.

a. Blue Cross/Blue Shield plan: The monthly premium cost to Ronald will be $42.32. For all doctor office visits, prescriptions, and major medical charges, Ronald will be responsible for 20 percent and the insurance company will cover 80 percent of covered charges. The annual deductible is $500.

b. The HMO is provided to employees free of charge. The co-payment for doctorâs office visits and major medical charges is $10. Prescription copayments are $5. The HMO pays 100 percent after Ronaldâs co-payment. There is no annual deductible.

c. The POS requires that the employee pay $24.44 per month to supplement the cost of the program with the companyâs payment. If Ron uses health care providers within the plan, he pays the copayments as described above for the HMO. He can also choose to use a health care provider out of the service and pay 20 percent of all charges after he pays a $500 deductible. The POS will pay for 80 percent of those covered visits. There is no annual deductible. Ronald decided to review his medical bills from the previous year to see what costs he had incurred and to help him evaluate his choices. He visited his general physician four times during the year at a cost of $125 for each visit. He also spent $65 and $89 on prescriptions during the year. (For the purposes of the POS computation, assume that Ron visited a physician outside of the network plan. Assume he had his prescriptions filled at a network-approved pharmacy.)

1.What total costs will Ronald pay if he enrolls in the HMO plan?

2. What annual medical costs will Ronald pay using the sample medical expenses provided if he were to enroll in the Blue Cross/Blue Shield plan?

azureelk922

Case Study #3

TO WAL-MART OR NOT TO WAL-MART?

Wal-Mart is a $250-billion-a-year retailer. Eighty two percent of U.S. households made a

Wal-Mart purchase in 2002. It is the largest company in the world with a global

workforce of 1.4 million. Where Wal-Mart competes the average grocery prices are 14%

lower. In the past it was General Motors, IBM and other companies that were considered

to be the leaders in industry and the ones to watch. Now it is Wal-Mart that is being

studied in universities around the world.

At Wal-Mart, cost is king. Costs are kept low and this translates into goods being sold

for less. The entire organization is focused on reducing costs and passing those savings

on to the consumer. This allows poor people to buy food and other necessities that they

otherwise might not be able to afford. In the U.S. it dominates sales in a number of

categories : 32% of disposable diapers, 30% of hair products, 26% of toothpaste, 20% of

pet food and 13% of textiles.

Wal-Mart simply has developed the most efficient methods for operating their business.

Their inventory management, through a network of scanners, computers, and at-the-ready

suppliers, makes it the leader in successful turnover of inventory. How can we blame

Wal-Mart for being the efficient cost conscious giant that it is?

The Wal-Mart phenomenon has occurred at the same time that high-paying skilled jobs

are being lost in the manufacturing sector. When these jobs are lost, the alternative often

means being employed at Wal-Mart at a much lower pay scale with reduced benefits

such as medical insurance. Its labor costs are twenty percent less than those at

unionized supermarkets, and sales clerks make less, on average, than the federal poverty

level ($8.50 an hour).

Barbara Ehrenreich* has described the problems faced by the under class, such

as waitresses and Wal-Mart employees. They barely survive on a day-to-day basis, living

from hand to mouth, with no reserves, no safety net, no medical insurance and almost no

prospect of improving their positions in life.

The loss of manufacturing jobs has affected the lifestyles of many people. What they see

is the reality of reduced opportunity with a permanent reduction in wages and standards

of living. They are trapped in a new marketplace, with diminishing expectations and few

alternatives to shopping at Wal-Mart. This is a change in our American culture--the

dreams have now been down-sized.

Is Wal-Mart the hero or the culprit? After all, low prices, competition, and growth have

all been mantras that Americans have been chanting all of our lives. We were

told that if you built a better mouse trap, everyone would come to you. Well, Wal-Mart

has built a better mouse trap. Is there any logic in our looking at Wal-Mart as a

contributor to the loss of some our middle class or is it just jealousy and sour grapes?

For one thing, its hard line on costs has forced many factories to move overseas.

Wal-Mart imported most of the items it sells. Environmental standards

are lower in these countries where these goods are manufactured than they are in the

U.S. This probably results in increased health issues and costs. In addition, shipment of

goods many thousands of miles to their ultimate destinations, involve utilizing the

worldâs limited oil resources. When you add up all this, the cost of the goods may be

greater than if they were produced in this country.

Another issue is that Wal-Mart is a non-union employer paying wages that are below the

poverty level, with minimal health insurance coverage. As many employees cannot

afford the co-payment required for doctors office visits, when a medical crisis occurs they

are forced to use the emergency room facilities of local hospitals. The result is that the

community bears the direct cost of their medical treatment and the indirect, as well as

ancillary costs such as diminished work capacity, child care, etc.

There are other economic ramifications to the Wal-Mart explosion. When Wal-Mart

arrives in a town, âmain streetâ erodes. Neighborhood stores that used to provide goods,

services and paid their workers well, are eliminated, uprooting families and ways of life

in the process. The Wal-Mart decision to saturate Oklahoma City, resulted in the closure

of 30 supermarkets.

If Americans shop with price being the only factor that determines where they

purchase their goods, doesnât this mean the permanent down-sizing of our standard of

living? How can the local retail establishment survive when they canât compete with a

Wal-Mart? Look at what has happened to the local supermarket, bookstore, hardware

and clothing store. The demise of these small business constitutes the loss of a middle

class of society in a community. We need to think: As consumers are we better off

paying a little more to enable the local merchants and their families to survive in order to

preserve the character of our communities and society or should we concern ourselves

with price only?

HERE IS YOUR DILEMMA:

You are the mayor of a small city in the West. You canât worry about the 4,700 workers

at IBM and the other workers at technology companies who lost their jobs. Your problem

is a more local one.

A Wal-Mart representative has approached you about the possibility of building a super-

store within your city limits. The store would serve communities within a twenty-five mile

radius. The land that they intend to build upon would require new zoning. Wal-Mart

would expect a certain amount of property tax and other relief. If your city does not

want a super-store, you are certain that one of the other towns close-by would be happy

to accommodate their needs.

What studies would you require before deciding which way to vote? What ramifications

do you foresee with this new super-store? What would you ask of Wal-Mart before

agreeing to their request? How much input would you seek from the residents of your

city

blushimpala894

FHCE 2100 Lecture Notes - Lecture 26: High-Deductible Health Plan, Copayment, Health Maintenance Organization

Document Summary

Get access

Related Documents

FHCE 2100 Lecture Notes - Lecture 37: Copayment, Physical Therapy, Health Professional

FHCE 2100 Lecture Notes - Lecture 6: Copayment, Co-Insurance, Dentures

FHCE 2100 Lecture Notes - Lecture 36: Blood Sugar, Medicaid, Health Reimbursement Account

Related Questions