Introduction To Health Insurance PPT 8 23 13 Final

Introduction to Health Insurance
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Click to edit Master title style
INTRODUCTION TO HEALTH INSURANCE
COURSE OVERVIEW
The Introduction to Health Insurance course covers the fundamentals of health insurance, which will be new for many consumers. It explains how health insurance works, how the ACA aims to decrease health insurance costs, and the rules that govern health insurance in the state of California.
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COURSE OBJECTIVES
Define health insurance and describe the different types of health insurance plans
Understand how insurance works and the value of having health insurance
Understand how the ACA aims to decrease health insurance costs Describe the rules that govern health insurance including the California Health Insurance Code and the Knox-Keene Act
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Lesson 1: Health Insurance Fundamentals
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HEALTH INSURANCE FUNDAMENTALS
OVERVIEW In this lesson we will focus on the basics of health insurance, how it works and the value health insurance brings to individuals and families. OBJECTIVES: Define health insurance and describe the different types of health insurance plans Understand how insurance works and the value of having Click to edit Master title style health insurance
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Health insurance pays for some or all of a persons health care costs. The covered person will pay a premium, which is a monthly amount paid in advance in order to receive health insurance. The covered person may share other costs of care (e.g. a $15 copayment at each office visit).
Preventive care and wellness services are covered by health insurance with no out-of-pocket cost. to edit Master title style InsuranceClick provides protection from overwhelming medical costs arising from chronic illness or injuries.
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TYPES OF HEALTH INSURANCE

In the U.S., there are two types of health insurance:
Private health insurance
o Provided by health insurance companies to consumers o Can be purchased directly or can be a benefit of employment
Public health insurance

o Provided by the government (e.g., Medicare and Medi-Cal) o Private insurance companies may administer these government programs for most of the people enrolled
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MANAGED CARE
In the U.S., the majority of health plan products offered both privately and publicly are managed care plans.
Networks of doctors and hospitals are created by the insurance company to provide quality care and predictable costs.
Providers in-network contract with the insurance company to coordinate care, providing services at negotiated rates. Some plans employ their doctors and staff.
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MANAGED CARE
In addition Insurance companies help to ensure that health services are medically necessary and helpful to the patient. Some procedures require prior approval. Most plans offer educational programs. Insurers must provide access to quality providers (doctors and hospitals), including specialists, within a certain timeframe. Doctors and hospitals must attain certain standards to be included in Click to edit Master title style the network. Negotiated agreements between insurers and providers set standards to maintain credentials, meet availability requirements, etc.
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THREE TYPES OF MANAGED CARE PLANS

Health Maintenance Organization (HMO) Exclusive Provider Organization (EPO) Preferred Provider Organization (PPO)
The amount paid by the person who is insured versus what the health insurance company pays depends on the value of plan.
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MANAGED CARE PLANS Heath Maintenance Organization (HMO)

A health plan that assigns or requires a member to select a primary care physician (PCP) or team of physicians to directly provide and coordinate member care.
o In-network doctors, specialists and hospitals provide all services. o Generally, the member must receive a referral from the PCP before seeing other doctors. o The plan generally doesnt cover out-of-network care, except in an emergency. Click to edit Master title style o The member must live in the geographic service area to be eligible for coverage. o The HMO provides preventive care.
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MANAGED CARE PLANS HMO example

Joe has a sports injury and wants to see a sports medicine specialist. He must first be seen by his PCP or at his designated medical facility. His doctor will assess his injury and, if necessary, refer him to a sports medicine doctor in the HMO network.
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MANAGED CARE PLANS Exclusive Provider Organization (EPO)

Like an HMO
o Members have access to the health plans provider network. o No out-of-network services, except emergencies, are covered.
Unlike an HMO
o The member does not generally need a referral from a PCP to receive care in-network. o Members are free to seek care directly from any network doctor or Click to edit Master title style hospital
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MANAGED CARE PLANS Preferred Provider Organization (PPO)

A PPO creates a network of preferred (or participating) providers by contracting with doctors and hospitals.
o Members choose their providers and where they get covered services. o Members pay less when they use a network provider, but always have the option to use an out-of-network at a higher cost. (The health plan pays a smaller percentage of allowed costs which are higher because members lose the benefit of negotiated rates with contracted doctors.)
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MANAGED CARE PLANS A PPO example

Example: Joe is enrolled in a PPO. He has a sports injury and wants to see a sports medicine specialist. Joe can go directly to any sports medicine doctor. The doctor Joe sees will bill the insurance company and Joe will owe the doctor for any co-pay or deductible required by his PPO. If it is an in-network provider Joes share of out-of-pocket costs will be less than if he chooses a doctor outside of his Click to edit Master title style PPO network.
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IMPORTANT TERMINOLOGY
Balance Billing Coinsurance Copayment Cost-Sharing Deductible Out-of-Pocket Limit
To find a comprehensive list of definitions look to the Glossary of Terms job aid and at:
www.coveredca.com/glossary.html or www.healthcare.gov/glossary/index.html
Click to edit Master title style Premium

Covered Services
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HEALTH INSURANCE IN ACTION

Heres how health insurance works:
The member pays a monthly premium in advance which requires the health insurance company to pay the plans share of the persons health care costs. The member seeks care from network providers. The type of plan (HMO, EPO, PPO) determines how the member accesses doctors and specialists. The health insurance company pays a pre-determined, negotiated Click to edit Master title style rate directly to the provider for care provided to its members.
The member is responsible for a cost-sharing contribution determined by the level of coverage (or benefit design) offered by the plan.
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HEALTH INSURANCE IN ACTION Cost-sharing requirements

Cost-sharing comes in the form of coinsurance, copayments and deductibles, which are generally applied to the members out-ofpocket maximum limit. The following are not treated as out-of-pocket costs:
o Monthly premiums (except in programs like Medi-Cal) o Balance-billing amounts for out-of-network doctors and hospitals
Click to edit Master title style o The cost of non-covered services

Once a member hits an out-of-pocket maximum limit, the insurance company generally covers 100 percent of covered in-network expenses.
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HEALTH INSURANCE IN ACTION An example

Ann has health insurance that includes the following costs:
Monthly premium = $200 Deductible = $5,000 Coinsurance = 20 percent Out-of-pocket limit = $6,000 Click to edit Master title style and incurs $50,000 in Ann is in a serious home repair accident covered medical expenses.
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HEALTH INSURANCE IN ACTION An example (continued)

Ann already pays a $200 monthly premium. After the accident, she is responsible for the first $5,000 of medical expenses (the deductible). Ann is also responsible for 20 percent coinsurance until she reaches the out-of-pocket limit. In this situation, 20 percent coinsurance would equal $9,000. Because the out-of-pocket limit is $6,000, and Ann already paid $5,000 (the deductible), she owes an additional $1,000. Click to editpays Master style and doctors directly for The health insurer thetitle hospitals the rest of Anns medical expenses. For the rest of the calendar year, the health insurance company pays 100 percent of Anns covered medical expenses. 8/30/2013
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HEALTH INSURANCE IN ACTION An example (continued)

The total cost for the incident
Ann pays $6,000 The health insurer pays $44,000
Total = $50,000 Click to edit Master title style
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Lesson 2: Health Insurance through Covered California
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HEALTH INSURANCE THROUGH COVERED CALIFORNIA
OVERVIEW This lesson will focus on the positive impact the ACA will have on health insurance in California, including cost, access and quality. This lesson will also describe the regulations for health insurance in California. OBJECTIVES: Understand how the ACA aims to decrease health insurance costs, improve access to care and quality. Click to edit Master title style health insurance including Describe the rules that govern the California Insurance Code and the Knox-Keene Act.
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REQUIRING INDIVIDUALS TO HAVE HEALTH INSURANCE

The ACA requirement that all individuals must have health insurance will have the following impacts:
With more insured members paying in, the risk of catastrophic illness and its costs are spread over a larger group.
Individuals and families no longer risk personal financial calamity leading to bankruptcy due to catastrophic injury or illness. Formerly uninsured individuals will be able to seek preventive care or treatmentClick sooner, avoiding serious illness and higher costs. to edit Mastermore title style
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PREVENTIVE CARE
Health problems can be identified earlier, managed more effectively and treated before they become more serious.
Preventive services are not only cost-effective, but also sometimes life-saving.
Out-of-pocket costs will no longer act as a barrier to keep members from seeking recommended screenings, counseling, immunizations, etc. This means better health outcomes as well as lower health care costs. Click to edit Master title style
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HEALTH INSURANCE EXCHANGES

Covered California creates a more organized, competitive market for health insurance.
Health insurance companies must meet rules relating to affordability, required benefits and market standards with standardized benefit options that are easy to compare.
Covered California will increase the number of individuals with insurance from plans and providers that provide the best value. Health insurance companies competing Click to edit Master title style for business will lead to lower rates, better customer service and higher quality.
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HOW HEALTH INSURANCE IS REGULATED IN CALIFORNIA
TWO GOVERNMENT AGENCIES REGULATE HEALTH INSURANCE IN CALIFORNIA California Department of Insurance (CDI) Department of Managed Health Care (DMHC)
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BOTH OF CALIFORNIAS HEALTH INSURANCE REGULATORS DO THE FOLLOWING:

Assist consumers (e.g., answering consumer questions about health coverage) Ensure that consumers receive independent medical review when dissatisfied with health coverage denials Resolve consumer complaints
Determine whether regulated companies comply with relevant laws

Resolve claims handling issues
Click to edit Master title style Resolve provider complaints

Ensure provider networks are adequate Ensure health insurers are financially sound and can pay for coverage Ensure consumers can get timely appointments with network providers
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BOTH OF CALIFORNIAS HEALTH INSURANCE REGULATORS DO THE FOLLOWING:

Reviewing proposed premium rates for reasonableness
Enforce the laws and regulations of either the Insurance Code (CDI) or the Health and Safety Code (DMHC)
Enforce the Affordable Care Acts reforms and new market rules such as guaranteed issue for all individuals seeking coverage, Essential Health Benefits requirements, medical loss ratio rules, no cost-share for preventive services, standard plan values.
Click to editrenewability Master title style Enforce guaranteed of coverage and termination rules.
Enforce fair claims payment and processing rules.
Enforce the states mental health parity requirements.
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CALIFORNIA DEPARTMENT OF INSURANCE

Regulates all insurance companies, including traditional indemnity health insurance companies, that are subject to the California Insurance Code. Is headed by the California Insurance Commissioner, an elected Constitutional officer.
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CALIFORNIA DEPARTMENT OF INSURANCE

CDI performs activities generally associated with all insurance regulation, including:
o Examining and certifying insurers
o Ensuring that insurance companies have adequate reserves to meet anticipated losses o Conserving, rehabilitating or liquidating troubled insurers o Licensing insurance agents o Ensuring that operate in an honest, open and fair manner Click toinsurers edit Master title style o Investigating insurance fraud o Taking legal action against those who violate the Insurance Code
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CALIFORNIA INSURANCE CODE

The set of laws regarding insurance including the following:
o The business of each insurance company must be examined by the Commissioner regularly, no less than once every five years. o The Commissioner may review all company records to ensure sound and appropriate business practices. o Health insurers must submit proposed rate increases to their policy holders and the CDI for review.
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DEPARTMENT OF MANAGED HEALTH CARE (DMHC)

DMHC regulates health care service plans. DMHC responsibilities include:
o Ensuring that risk-bearing organizations such as capitated medical groups are financially secure and comply with relevant laws to ensure delivery of care
o Litigation/enforcement of requirements under the Knox-Keene Act
o Oversight of health plan operations (e.g., evaluation of a health plans networks, provider agreements, subcontractor relationships)
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THE KNOX-KEENE HEALTH CARE SERVICES PLAN ACT

The Knox-Keene Act
o Focuses on the plans obligation to provide health care services rather than the payment for specified expenses or losses. o Imposes detailed requirements on plans to provide access to certain types of defined services and to ensure quality of the care provided as well as timely appointments and access to providers. An Example In 2014, individual and small group plans are required by the KnoxClick to edit Master title style Keene Act and the Insurance Code to cover Essential Health Benefits (EHBs) pursuant to the ACA. Newly enacted regulations require plans to file an EHB worksheet with the DMHC.
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INTERSECTIONS OF INSURANCE REGULATIONS

An HMO or EPO product is subject to regulatory oversight by the DMHC
A traditional indemnity health insurance product ( PPO or EPO) is subject to oversight by the CDI
Plans sold in the Covered California marketplace are always subject to government regulations but are also subject to Covered Californias regulations and the terms of the plans contract with Covered California, which may be stronger than the applicable Click to edit Master title style regulation. Covered California is not a regulator but is charged with creating a robust, organized health insurance marketplace.
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INTERSECTION OF INSURANCE REGULATIONS

Covered California, the CDI and the DMHC are all working together To ensure effective oversight and regulation of health insurance markets in California To ensure that the ACA rules and requirements are implemented in California To maximize consumer protection.
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COURSE SUMMARY
You should now be able to: Define health insurance and describe the different types of health insurance plans and products Understand how insurance works and the value of having health insurance
Understand how the ACA aims to decrease health insurance costs, improve access and quality and protect consumers
Describe the general rules that govern health insurance found in the California Insurance Code and the Knox-Keene Act
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Introduction To Health Insurance PPT 8 23 13 Final

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Introduction To Health Insurance PPT 8 23 13 Final

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Introduction to Health Insurance

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