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Preferred Provider Organizations A Preferred Provider Organization(PPO) is a group of healthcare providers, such as doctors or hospitals,who provide care for groups of employees at reduced rates. PPOsare usually sponsored as part of an employer’s group health plan.Employees choose among the healthcare providers on the PPO list whenthey need treatment. Choosing a non-PPO provider reduces the benefitspaid to the insured under the plan.Government Health Care PlansPeople over 65 who are covered by social security are eligible forMedicare , a federally funded health insurance program. MedicarePart A helps pay for inpatient hospital care. Medicare Part B pays for80 percent of doctors’ and other medical services. Many people buy theirown medigap insurance to cover the 20 percent not covered by Medicare.Medicaid is a healthcare plan for low-income people. State governmentsadminister Medicaid, which is funded by both state and federalfunds.Disability InsuranceDisability insurance pays you benefits when you can’t work becauseof a disability. It can be purchased from a private insurer. Most often,however, it is paid in whole or in part by the employer. Total, or longterm,disability pays if you can’t perform normal job duties for a yearor longer; partial, or short-term, disability pays for a few months ofbeing disabled.Language ArtsAn HMO is a type ofprepaid medical servicein which members pay afee for all health services,including hospitalization.A health policy analyst,Dr. Paul Ellwood, coinedthe term “health maintenanceorganization” inthe early 1970s. The coststo patients are fixed inadvance, so preventivemedicine is stressed.Research ActivityHMOs were controversialfrom the start, and thedebate continues all theway to the federal legislatorsin Washington, D.C.Research HMOs andprepare a debate on thepros and cons of this typeof health coverage.Reviewing What You Learned1. What are the principal types of lifeinsurance? Briefly describe each one in yourown words.2. What risks are generally not covered byinsurance?3. What benefits are provided by basic healthinsurance? major medical?Legal Skills in ActionCalculating Future Premiums Kim Lee hasdecided to purchase dental and vision insurance.Her agent quoted her a price of $250 per yearbut told her the price will probably increase alittle each year. If it increases three percent peryear every year, what will her premium be10 years from now?Critical Thinking ActivityLife Insurance Who needs life insurance?Explain your answer.Chapter 35: Insurance Protection 761