Overview on USA Healthcare Insurance - Different types of Federal/Government sponsored Health Schemes

Different types of Federal/Government sponsored Health Schemes

High-Risk Pools

A high-risk poolis a State-operated program that offers health insurance to individuals who do not have access to health insurance coverage through their employer and suffer from a serious medical condition that prevents such individuals from purchasing private health insurance. It is similar to risk pools for automobile insurance to ensure coverage for people who cannot afford them. In most States across USA, the risk pool is funded through premiums, supplemented by tax revenues or by an annual assessment on health insurance companies operating in that particular State. More than 30 States have established high-risk pools that provide access to comprehensive health coverage for more than 1,80,000 individuals across the country. An estimated 1 million people who are eligible for coverage in high-risk pools do not participate in this scheme or avail the benefits under High-Risk Pool coverage. In a few cases, certain States across USA do not have adequate funding for the pools and therefore are unable to enroll all the eligible individuals under this scheme.

The different types of health-related coverage under Government sponsored schemes include long-term care insurance, disability insurance and supplemental insurance.


a) Long-Term Care Insurance

The purpose of long-term care is to provide the assistance required by an individual for performing activities related to daily living�such as food, clothing and shelter. In certain cases, an individual may need supervision because of dementia or other similarly related forms of cognitive impairment. In addition to this custodial care, some individuals require assistance of professional nursing services on account of serious illness. An individual can receive long-term care in a hospital, nursing home or in his/her own residence. The need for long-term care can arise at any time or any period in life, regardless of his/her age. Senior citizens make the maximum usage of long-term care, but nowadays it has been observed that younger and middle-aged individuals may sometimes require Long-term Insurance care due to varied reasons viz. chronic illness, accident or crippling disability for an extended period of time. Long-term medical care can be very expensive and the incurred treatment expenses could be very high. Home care is less expensive in comparison to medical care at hospitals or nursing homes. Leaving aside lodging (accommodation) expenses, home treatment could prove to be costly. Home care can include part-time skilled nursing care, speech therapy, physical or occupational therapy etc. If costs pertaining to skilled nursing help are added in the medical bills, for eg. physical therapy, the costs could be on the higher side.

Long-term care-whether in a hospital, nursing home, assisted living facility, or the policyholder's own residence-usually is not covered by health insurance except in a very limited way. Medicare generally does not provide coverage for long-term care. Long-term care insurance can help to protect the concerned individual from the exorbitant medical costs associated with this type of care. Most long-term care policies pay a fixed dollar amount, which can vary significantly. The daily benefit derived from at-home medical care usually is about half of the benefit derived for nursing home care. It is recommended that in order to get the lowest rates, an individual should apply sooner rather than later for availing long-term care insurance. An individual's age and any medical condition or ailment that he/she is suffering from may greatly affect his/her eligibility for the insurance coverage including the premium cost for purchasing the insurance product or service. Recent amendments in Federal law may allow an individual to take certain income tax deductions for some long-term care expenses and insurance premiums. In addition, some States may grant a partial deduction or credit toward State income taxes for such costs incurred as part of medical expenses. Traditionally, the annual rate of increase in the cost of long-term care services has seen a sharp rise in comparison to the other consumer services. This implies that the healthcare policy cover that an individual may purchase today may not be sufficient to cover the escalated medical costs in the future. An individual has the freedom of choosing a plan with an inflation adjustment feature so that he/she can be protected against the rise in long-term medical care costs with the passage of time until such medical/healthcare services are really needed by the concerned individual. Long-term care insurance may be offered by the employer or may be eligible through a union, fraternal group or through other organizations wherein he/she is a member. In addition, many life insurance companies offer long-term care insurance directly to the consumers.

b) Disability Insurance

Disability insurance replaces income loss incase, if an individual is suffering from a long-term illness, accident or injury and thereby cannot can not contribute your services towards the organization. This is an important type of coverage that should be given importance and weightage by the working classes for working class to consider.

Disability insurance is not usually considered as a form of health insurance. Moreover, it does not cover the costs associated with rehabilitation subsequent to an accident, injury or illness. Often, such costs are covered under the major medical part of an individual's health insurance plan. Benefits paid under a disability plan can be utilized for the purpose of medical expenses at the discretion of the insured. This could include rent, utilities, or groceries. Some employers offer group disability insurance. It is advisable to check or confirm with his/her employer to find out if such coverage is provided or not. Disability insurance will be less expensive if an individual's employer contributes toward the healthcare costs. Nowadays, different kinds of individual policies are available across USA markets. It is always advisable that a consumer or a prospective policyholder should verify from the insurance company to check if it offers disability insurance coverage.


c) Supplemental Insurance

Different types of insurance coverage are available to an individual that reimburses benefits when specific types of events occur in an individual's life viz. hospitalization or critical illness. This coverage usually will pay or reimburses benefits in the form of cash that can be subsequently utilized to cover additional expenses incurred by an individual on account of such unforeseen events. Such a insurance coverage may be available from his/her employer or directly from an insurance company.

References:

1. DEFINITIONS OF HEALTH INSURANCE TERMS - (http://www.bls.gov/ncs/ebs/sp/healthterms.pdf)
2. Glossary of Insurance Terms - (http://www.ambest.com/resource/glossary.html)
3. Patients & Consumers - (http://www.ahrq.gov/CONSUMER/insuranceqa/insuranceqa.pdf)

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