FHCE 2100 Lecture Notes - Lecture 32: Copayment, High-Deductible Health Plan, Health Savings Account

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amaranthsquirrel732

10 Nov 2016

School

University of Georgia

Department

Financial Planning, Housing and Consumer Economics

Course

FHCE 2100

Professor

Dr.Kabaci

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Document Summary

Plan of the past (for most of us) You direct your own health care; visit almost any doctor/hospital you want. Insurance company pays a set portion of your total charges. Looking for greatest level of freedom in choosing doctors/hospitals. You do not want to designate primary care physicians or get referrals to see specialists freely visit and physician you choose. Hdhp with has: high deductible health plan with health savings account. Offers services only with specific hmo providers. Members pay monthly premiums & must choose from list of doctors provided (cannot always choose physician and other personnel) Group hmo: from a central location, larger cities. Individual practice association (ipa): physicians practice from their own offices with hospitals that are affiliated with ipa (have some choice over physician and hospitals) Pros requires to choose primary care provider any specialists will be referred by pcp (cid:272)are usually does(cid:374)"t (cid:374)eed to (cid:271)e pre-authorized through company before treatment can begin.

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?

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FHCE 2100 Lecture Notes - Lecture 32: Copayment, High-Deductible Health Plan, Health Savings Account

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