- Cash Management
- Consumer and Mortgage Loans
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Understand How Health Insurance Relates to Your Personal Financial Plan
- Explain Health Insurance Coverage and Health Insurance Plans
- Understand the Key Areas of Disability Insurance
- Understand the Key Areas of Long-term Care Insurance
- Understand How to Control Your Health Care Costs
- Know What to Look for When Buying Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
Government-Sponsored Health-Care Plans
Government-sponsored health-care plans are insurance plans that are sponsored by either the state or the federal government. These plans fall under four headings: (1) workers’ compensation, (2) Medicare, (3) Medigap, and (4) Medicaid.
Workers’ compensation: Workers’ compensation is a state-sponsored insurance program that insures employees who have suffered work-related accidents or illness. An advantage of workers’ compensation is that it provides insurance for workers injured on the job, whether they have health insurance or not. A disadvantage of worker’s compensation is that it covers only work-related accidents and illnesses. Moreover, coverage is determined by state law and varies from state to state.
Medicare: Medicare insurance provides medical benefits to people who are disabled or are age sixty-five and older and covered by Social Security. The costs of this federally sponsored program are covered with Social Security taxes.
The cost of private insurance for people who are disabled or people who are over age sixty-five is often unaffordable. Medicare provides a way for these individuals to get affordable health-care. A disadvantage of Medicare is that it does not cover all the costs of care and treatment.
Medicare is divided into Part A and Part B. Medicare Part A is compulsory and covers all hospital-related expenses, including costs for hospitalization, skilled nursing-care facilities, home health-care, hospice care, and prescription drugs furnished by the hospital.
Medicare Part B is voluntary, and there is a monthly fee for services. Part B covers doctors’ fees and other medical services, including clinical lab services and fees, health care provided in the home, and outpatient hospital treatment.
Medicare does not cover the total costs of all services. Those insured by Medicare must still pay a portion of their medical costs in order to receive coverage. There are also limitations on the coverage provided by Medicare; for example, out-of-hospital prescription drugs are not covered, and the number of days a person can spend in a skilled nursing-care facility are limited.
Medigap: There is another type of insurance called medigap insurance. Medigap insurance is sold by private companies and covers the gaps between the two parts of Medicare. An advantage of medigap insurance is that it covers additional medical costs that Medicare does not include. In all but three states, federal law has limited medigap insurance provided by private companies to ten set or standardized contracts, each with different options and costs. Another advantage of medigap is that a person can’t be rejected for health reasons if he or she enrolls in medigap within six months of enrolling in Medicare Part B. A disadvantage of medigap is that this type of insurance is expensive; however, consumers should shop around—costs can vary.
Medicaid: Medicaid is a medical assistance program that is jointly operated by states and the federal government through the Social Security program. It provides health-care coverage to persons who have a low income, are blind or aged, and to needy families with dependent children. An advantage of Medicaid is that an individual’s payments can be used to offset the monthly premiums, deductibles, and co-payments incurred with Medicare. A disadvantage of this plan is that there is no guarantee Medicaid will still exist in its present form in the future.