Determining your specific health insurance needs and choosing a plan that is best for you and your family––and your pocketbook––can be a daunting task, but it’s a necessary one. Without insurance, one serious illness or accident could wipe you out financially. Married or single, children or no children, health insurance is simply one of those necessities of modern life that you must have in order to protect yourself.
Under the Affordable Care Act, which was signed into law in March 2010, health care is now more attainable and affordable for Americans than ever before. Some of these provisions are already in effect, and others will start in 2014. But the better you understand these changes and the way they may benefit you and your family, the better your chances of being able to take advantage of them. Some of the key changes are explained below.
Most people get health insurance through their employer or their spouse’s employer. This is called group insurance because a group of individuals––the employees––are insured. If you are self-employed or don’t work for a company that offers insurance, you might be able to obtain health insurance through membership in a labor union, professional association, club or other organization. Going through a group will probably be less expensive than getting an individual policy; it may also provide broader coverage.
But it is very important that people investigate whichever club, association or organization is offering the insurance plan to ensure that it is solvent and reliable.
You can contact an insurance agent––perhaps the agent who provides your car or home insurance––or research various companies by contacting their sales departments or reading about them on the Internet. Your state probably has an insurance commission or department that can provide a list of insurers (look in the government listings section of your phone book or search online); some agencies even provide information on the number of complaints filed against specific companies.
Health insurance is so important that the federal government passed a law called the Consolidated Omnibus Budget Reconciliation Act (COBRA) that allows for coverage through an employer (with at least 20 employees) to be continued for up to 18 months under a variety of conditions. (In some cases, certain qualifying events, or a second qualifying event during your initial period of coverage, may permit you to receive a maximum of 36 months of coverage.) Additionally, many states have passed so-called mini-COBRA laws that apply similar requirements to employers with fewer employees. The conditions vary from state to state but usually include:
You were covered through your employer or your spouse’s employer, and you (or your spouse) were laid off or reduced your working hours so you no longer qualified for their health plan. (An employee who was terminated for gross misconduct will not be eligible, however.)
You were covered through your spouse’s employer but are now widowed or divorced.
You were covered under your parents’ group plan while you were in school but are no longer a student.
In these cases, this law requires the health plan, including self-insured plans typically offered by most large employers, to continue your coverage for up to 36 months (which varies depending on the state you live in and the reason you lost coverage). The amount you pay for the insurance will be higher because the employer is not required to pay any part of the premium for you; you will need to pay the entire premium plus an additional 2 percent for administrative expenses.
As part of the Health Insurance Portability and Accountability Act (HIPAA), insurance carriers cannot cancel coverage unless:
You don’t pay your premiums, make late payments, commit fraud or lie to the insurer.
Your insurer is no longer offering your particular type of coverage.
You have coverage with a managed care organization (such as a health maintenance organization) and move outside of the service area.
You qualify for coverage as a member of an association and your membership in the association ends.
The federal government also has passed the first-ever federal privacy standards to protect patients’ medical records and other health information provided to health plans, health care professionals, hospitals and other health care providers.
Developed as part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and effective since 2003, these standards provide patients with access to their medical records and more control over how their personal health information is used and disclosed. Patients are protected with the following key provisions:
Patients may access copies of their medical records within 30 days and request corrections if they identify errors and mistakes.
Covered health care providers must provide a notice to their patients how they may use personal medical information and their rights under the new privacy regulation.
Limits are set on how health care providers may use personal health information, but they are not restricted in sharing information needed to treat their patients. Personal health information generally may not be used for purposes not related to health care, and providers may use or share only the minimum amount of protected information needed for a particular purpose. Patients would have to sign a specific authorization before a provider could release their medical information to a life insurer, a bank, a marketing firm or another outside business for purposes not related to their health care.
Pharmacies and health care providers must first obtain an individual’s specific authorization before disclosing their patient information for marketing purposes.
The new federal privacy standards do not affect state laws that provide additional privacy protections for patients.
Patients can request that their health care providers take reasonable steps to ensure that their communications with the patient are confidential.
Patients may file a formal complaint regarding the privacy practices of a covered health care provider by contacting the provider directly, by filing a complaint online at http://www.safegenericpharmacy.com.
Whether you are offered a choice of plans through an employer or are looking to purchase an individual policy, you need to compare options and costs because they vary from company to company. Even if your employer doesn’t provide a choice, you need to understand what kind of protection your health plan provides and what you will need to do to get the health care services you need.
There are three main types of health insurance, and sometimes employers offer one plan of each type from which you can choose. Both your needs and your budget will help determine which type of plan you select.
Many Americans do not have health insurance either because they cannot afford it or because their employer doesn’t provide it. If you find yourself in this position, there are services that can help you get the health care you may need for your family––from preventive care and paying for prescription medications to low-cost services to manage existing conditions. For more information about finding these services, log on to http://www.safegenericpharmacy.com. A project sponsored by the Robert Wood Johnson Foundation, this website provides information on where to go in your state for low-cost services.
The federal Affordable Care Act provides additional assistance for Americans who are uninsured due to a pre-existing condition. The Pre-Existing Condition Insurance Plan provides new coverage options to people who have been uninsured for at least six months due to a preexisting condition. The program serves as a bridge to 2014, when all discrimination against preexisting conditions will be prohibited. For more information on the program and how it works in your state, go to http://www.safegenericpharmacy.com.
Under the Affordable Care Act, young adults are allowed to stay on their parents’ plans until they turn 26. This does not apply if your son or daughter is offered insurance at work. Some states have their own laws, which allow children up to the age of 30 to remain on their parents’ plans.
Fee-For-Service or Indemnity Insurance
Under a fee-for-service plan, you and your insurance company each pay a portion of your health care expenses. (Keep in mind not all health care services may be covered. Read the policy closely to determine what is covered and what isn’t.) This type of insurance offers the widest choice of health care professionals and hospitals; usually you can go to any health care professional or hospital you want.
You pay a premium or monthly fee to the insurance company. You have a deductible, or an amount you must spend on covered health care services out of your own pocket each year before the insurance company starts paying. The deductible can range from relatively low sums such as $250 to more than $1,000 per individual or more per family, per calendar year. Women, particularly older women, are most likely to have higher deductibles. The higher the deductible, the lower your premium.
After you have paid your deductible for the year, the insurance company begins paying for part––usually about 80 percent––of your covered health care services. You will pay the other portion, which is called coinsurance. Most plans offer a cap on the amount you will have to pay for medical bills in any one year. When you reach the cap––which can range from about $1,000 to about $5,000 in one year––through both your deductible and coinsurance, the insurance company begins paying 100 percent of covered services. (Your premium does not count toward the cap.)
As an example, let’s say you had an enlarged gallbladder that needed to be removed. The illness required a doctor’s visit and tests, an overnight hospital stay with related care, surgery and the services of a surgeon, and prescription medications. The grand total is $6,000. You have a $500 deductible, which you pay, leaving $5,500. The insurance company pays 80 percent of that, or $4,400, leaving you a balance of $1,100. Your total cost (over and above the insurance premium): $1,600. If you’d already met your deductible, your cost would be 20 percent of the $6,000, or $1,200.
Be sure the policy covers the types of services you or your covered family members might need. Some policies don’t cover, for example, psychological services, drug or alcohol treatment, preventive health care coverage, immunizations or well-child care or even specific conditions or illnesses such a pregnancy and delivery. If a type of service is not covered, you will have to pay 100 percent of the bill, and the money you pay will not be counted toward your deductible or your cap.
One caveat: most insurance plans pay only the “usual (or reasonable) and customary fee” for services and have predetermined what that amount is. If your health care professional charges more than that, you will be expected to pay 100 percent of the difference, regardless of deductible or cap. You can speak to your health care professional in advance to determine if he or she will charge the reasonable and customary fee or more.
Fee-for-service is usually the most expensive type of coverage, but it does have some benefits:
You can make your own health care choices, choosing for example, which health care professionals––including specialists––you see, which hospitals you go to, etc., even if they’re out of your local area, an advantage for travelers or people with covered children that live in another town.
You don’t have to see your primary care physician before seeing a specialist. You have a little more control over what type of care to seek than with some other types of plans. Sometimes though, even fee-for-service plans require preapproval of some types of care, such as hospitalization.
Health Maintenance Organizations
Purchasing a health insurance policy under a health maintenance organization (HMO) is similar to joining a buying club. You pay a monthly premium, and the HMO provides care for you (and your family members if they are covered)––including visits to health care professionals, hospital stays, emergency care, surgery, lab tests, X-rays, etc.––through a network of professionals and hospitals. If the HMO has contracted with individual physician offices to provide care to its insured members at a reduced rate and pays them a set fee per HMO member, regardless of how much that member uses health services, this is called an independent practice association (IPA) network. When you purchase your policy, you will be given a list of participating IPAs from which you can choose to seek care. HMOs develop networks by contracting with IPAs. They also develop networks by contracting with medical group practices or even individual practices. These latter physicians are not part of an IPA. Under another scenario, the HMO hires health care professionals, paying their salaries directly.
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