Wiser Fitness and Health BlogWiser Fitness and Health Blog will update you . . . . . . to let you know about news that could affect your health or wellness affairs and to help you consider your options; . . . to give you in-depth information on fitness and health issues that you may not have seen in other publications; . . . whenever new pages appear on the Fitness- Culture-Health-Insurance.com webpage; . . . when we publish a fitness or health ezine, magazine or news article that might be of interest to you; . . . whenever we discover or offer related products or services that may be of benefit to you.
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You can subscribe to our blog, ezine and updates via email. Sign up on our Contact Us Form (See Button to left). Or, go through RSS (see the left margin), in case you don't like giving out your email address or in the event your ISP has filter challenges that make you miss email. To subscribe with RSS, RIGHT-click on the orange RSS button, then copy-and-paste the URL of this site's RSS feed into your RSS reader . . . or . . . if you keep a personalized home page on Google, or My Yahoo, or My MSN, or Bloglines, left click on the appropriate button on this page, then follow their instructions . . . If you are not sure what RSS and blogging are all about, click on the question mark above RSS for an explanation . . . What is RSS? It's simple, and once you start, you'll be surprised how easy it works. A 2010-2011 WISER Health Insurance Consumer Guide - Part 19
15. What is PCIP and how could it affect you?
With the passage of Obamacare in March, 2010, the Federal government is now offering a high risk program for insureds with preexisting conditions. It is called the Pre-existing Condition Insurance Plan, or PCIP. PCIP is a four year program that will cover qualified uninsurable patients until the full implementation of healthcare reform in 2014.
PCIP is a federally-funded program that calls for states to administer the fund in a manner similar to Medicaid. States are required to agree to partner with the federal government to implement the program. However, there are two major problems with the PCIP program. First, the plan was under-funded in the federal legislation. Second, any funding deficit in the plan must be borne by the partner states.
The funding issue was not accidental. It was done purposely to reduce the official cost of Obamacare in order to get it passed. The result of passing costs along to state taxpayers has kept some twenty-two states from signing on to PCIP. As far as an individual patient is concerned, this does not matter. Residents of states that did not participate can apply through federal officials rather than state offices. To qualify for the PCIP program, you must be a US citizen or lawfully present in the US. You must have been uninsured for at least six months. This requirement could possibly work against you if you secured coverage through your state of residence high risk pool, if PCIP subsidized premiums are lower than the state pool rates. And finally, you must have evidence that you were denied insurance due to a pre-existing condition. If you have been denied private insurance due to a preexisting condition, PCIP may be your answer. To learn more and to apply, go to http://www.healthcare.gov/ and click on Pre-Existing Condition Insurance Plan. A 2010-2011 WISER Health Insurance Consumer Guide - Part 18
14. What is SCHIP and how could it affect you?
State Children's Health Insurance Program, or SCHIP, is a Federally-funded program that is administered by and through the states. The objective of children's health insurance is to cover uninsured kids in families with incomes that are modest but that exceed Medicaid limits of one times the federal poverty level. Those eligible for Medicaid are not eligible for SCHIP.
Every state has a SCHIP program. Within Federal guidelines, each state has the authority to establish program design and qualifications.
SCHIP covers kids from birth up to the age of 18 who live in families with incomes up to 300 percent or more of the Federal poverty guideline. With a 100 percent poverty level factor for a family of four being about $21,200, the indicated income range for SCHIP could be three times that amount or more. New regulations also broaden the pool of those qualified for coverage.
Qualifying for SCHIP requires periodic renewal and re-qualification. Depending on applicable regulations, Children's Health Insurance may provide healthcare services at minimal cost or no cost. For those who qualify, SCHIP offers relief from the concerns for children’s healthcare and for the high cost of health insurance. As currently constituted, eligibility for SCHIP expires as children age or if family income exceeds the permitted limit.
To inquire about the application of the State Children’s Health Insurance Program to your family in your state, go to your state of residence public health or insurance webpage. Then, click on the SCHIP page link. Each state may have children's health insurance listed under their unique program name. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 18" A 2010-2011 WISER Health Insurance Consumer Guide - Part 17
13. What is Medicaid and how could it affect you? Medicaid is a federal and state funded and state administered health insurance assistance program that helps families with low incomes. Medicaid can help children or qualified adults and seniors. To qualify for Medicaid Health Insurance assistance to children, families must meet Aid To Families With Dependent Children (AFDC) eligibility requirements for their state of residence. Kids under six years of age can qualify if their family income is at or below 133 percent of the Federal poverty level. This amounts to about $28,000 annual income. Children ages six to 19 with family income up to 100 percent of the poverty level ($21,200) may also qualify. The poverty level figures are adjusted annually. Medicaid can also work in conjunction with Medicare to assist Medicare-covered seniors who meet Medicaid income requirements to pay for Medicare premiums. The fastest growing Medicaid program is the Medicaid nursing home coverage for seniors, as the "greatest generation" of the depression and World War II era reach elder status. The dark cloud overhanging future federal and state budgets are the prospects for a Medicaid explosion of costs when the 78 million Baby Boomers begin to reach the age of needing nursing home care after about 2025. The Medicaid cost could be beyond taxpayer ability to pay. Medicaid program requirements are determined and administered by each state, in accordance with Federal guidelines. To determine eligibility and to apply, you must contact the Medicaid office in your state of residence. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 17" A 2010-2011 WISER Health Insurance Consumer Guide - Part 16
12. What can you do if you have retired early or been laid off but do not yet qualify for Medicare? If you qualify for COBRA from your employment, you can always consider that option. However, if you look into other alternatives, you will probably find that COBRA is not your best choice. If you have more than a year until reaching age 65 to qualify for Medicare, you should look into getting a personal or family comprehensive major medical insurance plan. See Guide Sections 2, 3, 4, 5, and 9 for tips on what to do and why. If you have less than a year to age 65, you may need to consider a short term plan because you may not qualify for the conventional comprehensive plan that has a minimum term of one year. You can get the details on short term plans on our Fitness Culture Health Insurance information website at http://www.fitness-culture-health-insurance.com/short-term-health-insurance-plans.html . If you have a preexisting condition that creates a problem in qualifying for private insurance coverage, go to Section 6 of this Guide for help. If you can qualify for coverage but have an affordability challenge with most health insurance plans, check Section 7 of this Guide to see the options available to you. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 16" A 2010-2011 WISER Health Insurance Consumer Guide - Part 15
11. What are Long Term Care Insurance Plans and why should you consider them? Long Term Care (LTC) Plans are supplemental plans that are designed to cover some part of or all of the cost of long term care, usually in a nursing facility. LTC plans may cover skilled nursing care, but also typically cover assisted living care and services which may include activities such as dressing, bathing, eating, toileting and getting into and out of bed. Most patients who use LTC benefits are Medicare patients, but Medicare does not cover LTC services. About sixty percent of patients over age 65 will require nursing home care at some point during their lifetime. The average age of entry into a nursing home is about 84 or 85 years old. The average stay of a patient in a nursing or assisted living facility is about four and one half years. The cost of a nursing or assisted living facility can vary widely depending on the location and on the menu of services. In 2000, the average daily cost was about $100. In 2010, that average daily cost is up to about $168. Long Term Care plans can be set up to cover all or a portion of daily charges. Plans typically have a maximum aggregate benefit, whereupon it will discontinue payments. For example, if you buy a $50,000 maximum coverage plan, you could have the option of getting reimbursed at the rate of $100 per day for 500 days, or a greater or lesser daily amount for the appropriate time period. You would be responsible for paying unreimbursed charges. Many people wrongly assume that Medicare will cover nursing home costs. Beyond an initial 100 day skilled nursing benefit after a covered Medicare event, Medicare does not cover long term assisted living care. So, why should you consider buying LTC insurance? You might think of LTC coverage in the same manner as liability coverage. Why do you get liability insurance? You hope you never have to use it, but you need it to protect your assets. It's the same with LTC. You hope you never have to use it, but if you need it, it will help you protect your assets. If you have to use long term care, LTC insurance will help defray the cost and protect your estate assets for a longer period of time. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 15" A 2010-2011 WISER Health Insurance Consumer Guide - Part 14
10. What if claims are denied or delayed? What can you do? The preface of this Guide states the premise that no one will manage your healthcare affairs better than you will if you know how. The objectives of this Guide and of our informational website at http://www.fitness-cuture-health-insurance.com are to show you how. When you know what's likely to happen, you are better prepared. You will have fewer surprises and disappointments. We can't eliminate system challenges and adverse events, but we can help you minimize them and manage them. It is easier to be your own advocate when you know what to expect and why. However, we also have to recognize that being your own advocate has limitations. You can be the expert on you, but most people do not have the time, inclination and resources to become an expert on all phases of the healthcare system. How can you know what you don't know? One way is to enlist the aid and assistance of people who have expertise in one or more areas of medical care, health insurance and our healthcare system. You may have family or friends who are trained and experienced in medical care and who would be willing to advise and assist you. Your health insurance agent can advise you about insurance coverages. An issue in our healthcare system can be the resolution of disputes over payment of claims. These often arise because insureds are misinformed or uninformed over what to expect. Sometimes the insurer is at fault by accident or by design. What can you do if you encounter such a problem? A professional healthcare advocate can be the answer. Healthcare advocates understand the health insurance and healthcare systems and can represent a consumer in a dispute over insurance claims and other systemic issues. To learn more about healthcare advocacy, check out the Patient Care Plan on our Fitness Culture Health Insurance website. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 14" A 2010-2011 WISER Health Insurance Consumer Guide - Part 13
9. What are Supplemental Insurance Plans and why should you consider them? Supplemental health insurance plans are limited benefit plans which are generally aimed at filling a specific gap in coverage or offering coverage for a specific risk or class of risks. A supplement plan that we commonly hear about is the Medicare Supplement, or Medigap plans, that most seniors buy to fill the gaps in basic Medicare coverage. Another well-publicized supplemental plan is the AFLAC plan touted by that loud-mouthed white duck on TV. The Aflac duck plan will pay you a cash benefit to replace lost income due to illness or injury. Many insurance companies offer a wide range of supplemental insurance plans to cover a whole spectrum of risks for which consumers have a need for coverage. Most plans are relatively low in cost because they are limited in benefits or terms. Benefit payments might be in lump sum cash, like Aflac, or over an extended time period, such as Long Term Care to cover nursing home expenses. There is likely to be a supplemental health plan that can satisfy the needs of any healthcare consumer. For example, a consumer with a family history of cancer might want to secure a supplemental cancer policy which covers expenses related to cancer treatment. Other types of supplemental plans include disability, dental, vision, accidental injury, Accidental Death & Dismemberment, hospital confinement, heart and stroke or travel health plans for coverage outside the US. As healthcare and comprehensive medical insurance plans become more expensive, supplemental health plans can play a significant role to fill specific coverage gaps on a cost-effective basis. A consumer who buys individual or family coverage can make very good use of one or more supplemental plans in conjunction with limited benefit or high deductible health plans to get health insurance on an affordable basis. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 13" A 2010-2011 WISER Health Insurance Consumer Guide - Part 12
8. What if you need care immediately while out of network area or uninsured? How can you minimize your cost? If you are either uninsured or insured but out of your network area, and you are faced with a critical need for emergency or urgent care, go to the nearest emergency room. Get the care you need to stabilize your medical condition, then deal with the financial arrangements. If you are uninsured, you will need to make whatever arrangements are necessary with the medical care provider. When you are in a critical medical condition, you may not enjoy the benefit of being able to negotiate beforehand. If you have insurance but are out of your network coverage area, you likely have an obligation under your plan to notify the insurer within a specific period. Be sure to comply. Non-compliance might result in a penalty. At a maximum, you may have to pay a higher deductible or copay for services received. Not a catastrophe. If you are insured and plan to travel to areas for which your insurance plan does not provide coverage, such as outside the US, you should consider getting a supplemental policy (see Part 9 of this Guide) that will provide coverage for the areas of travel. Travel health plans are usually not expensive. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 12" A 2010-2011 WISER Health Insurance Consumer Guide - Part 11 (Continued)
7. What can you do if you can't afford health insurance? The focus here is not eligibility or any preexisting condition. It is simply a question of cost and affordability. Community Health Centers: They are often free or provide subsidized low-cost physician care. Check out any near you to know if you qualify; Retail "Doc-In-A-Box" Outlets: These recently-developed doctor retail stores can be found in many suburban shopping centers. They are usually cash or credit card operations that are often less expensive than hospital emergency rooms. They see a lot of bumps and scrapes, bruises and brakes, and respiratory problems. A good option if you do not have a regular doctor. A better option than an ER if no major illness or injury; Negotiated Cash Deals: If you have a doctor or need to go to a doctor or hospital, ask for the cash (no insurance red tape) price and try to negotiate a discounted cash deal before taking services. Once services are delivered, it's too late. Get it in writing if possible; Prescription Drug Assistance: With prescription drugs, especially brand names, check online at www.rxassist.org or at www.needymeds.com or at Rxaminer or at DestinationRx or the Partnership For Prescription Assistance. If you have to get a brand name drug, look on the drug manufacturer's webpage to see if they have a drug assistance program. If so, apply. Always ask your doctor who writes the prescription for a generic substitute and for samples. Medical Equipment and Devices: For any medical equipment or device needs, check with second-hand or charity stores such as Goodwill or Salvation Army to find perfectly good alternatives often at less than ten percent of their new price. A soap and water clean up makes for a great deal. A 2010-2011 WISER Health Insurance Consumer Guide - Part 11 (Continued)
7. What can you do if you can't afford health insurance? The focus here is not eligibility or any preexisting condition. It is simply a question of cost and affordability. If you do not have children or if neither of the federal-state subsidy programs of Medicaid or SCHIP apply to you, then you need to focus on two other areas - low-cost health insurance and becoming a savvy, effective value shopper for healthcare services and products. Low Cost Health Insurance: Generally, you can secure lower cost health insurance plans in one of two ways. Either get a limited benefits plan which may have limited coverage, lower maximum limits, be for a shorter term, or have other restrictions that justify a lower premium. Limited benefit plans will not offer the catastrophic loss coverage that comprehensive major medical plans do. Limited benefit plans may also be used in conjunction with supplemental health plans (see Part 9 of this Guide) to fill specific gaps in coverage on a low-cost basis. The other option is a high deductible health plan (HDHP) by which you will essentially self-insure for the affordable lower health expenses but secure coverage for the catastrophic expenses you could not afford to suffer. HDHP's are the most affordable form of health insurance because they adhere to the basic principles of insurance. Supplemental plans may also be used in conjunction with HDHP's. Value Healthcare Shopping: You save money by buying lower cost health insurance that leaves gaps in your coverage. You then need to close those gaps by spending time to become a savvy, effective buyer of healthcare services. You need to have a plan. You will need to do your homework, understand your options and be able to make sound decisions before you encounter the crunch of needing emergency or urgent care. Then, when that need arrives, work your plan. What alternatives are available? The following are some, but not all, of your options for lower-cost healthcare: Supplemental Insurance Plans: Supplemental insurance plans (see the guide section on these plans) are niche plans that can offer low-cost gap coverages and that are often available in conjunction with other insurance plans such as health or auto; A 2010-2011 WISER Health Insurance Consumer Guide - Part 11
7. What can you do if you can't afford health insurance? The focus here is not eligibility or any preexisting condition. It is simply a question of cost and affordability. For nearly 60 years, many have answered this question by getting a job, likely with a large employer, that offered health insurance benefits to its employees. Such employees often found themselves locked in to jobs they did not like because they could not leave the security of those employer-paid health insurance benefits. Lately, this has become less applicable because many employers are reducing or dropping their health benefits due to high costs, and because fewer employers are hiring in tough economic times. So, let's focus on solutions other than employer programs. In a worst case scenario, if your family income is at or below the federal poverty level, you may be eligible for Medicaid assistance through your state of residence. Check with your state Medicaid office for details and application. If your family income is above the federal poverty level, but not more than three times that income level, the family children and perhaps the mother may qualify for assistance under the State Children's Health Insurance Program (SCHIP). This is another federally-funded, state-administered program. Check with your resident state children's health insurance program office for details and application. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 11" A 2010-2011 WISER Health Insurance Consumer Guide - Part 10
6. What can you do if you can't qualify for health insurance? Who is eligible for an individual or family comprehensive major medical plan? Adults are usually eligible until they qualify for Medicare at age 65. Dependents are eligible without regard to pre-existing conditions under a parent’s plan through age 26 under the 2010 federal healthcare reform act. Newborns may be covered at birth. Expectant parents will usually not be accepted for a new plan but can be covered after the birth. Who is not eligible? Incarcerated individuals, non-US citizens, unless they have a visa and green card, and those age 65 or over. Seniors over age 65 can secure coverage through Medicare. Some insurers exclude applicants who have hazardous occupations or activities. Most individuals who are not eligible for private insurance for reasons other than age or citizenship rights have been ineligible due to preexisting health conditions that private insurers would not cover because it would lead to guaranteed losses. Disabled individuals are often not eligible for comprehensive major medical coverage but may be approved for Limited Benefit coverage. Under the 2010 federal healthcare reform bill, denial of health insurance coverage due to a preexisting health condition is being phased out. Preexisting condition exclusions for dependents covered under a parent's plan were prohibited effective October 1, 2010. Such exclusions for all applicants are prohibited effective January 1, 2014. Until 2014, consumers with preexisting conditions who are denied coverage by private insurers will have at least one and maybe two options. The first option is state high-risk pools which are offered by 32 states. The premiums are usually higher, but coverage is available in most cases without regard to preexisting conditions. To get details, go to the webpage of the insurance commissioner for your state of residence. The second option is the federal Preexisting Condition Insurance Plan, or PCIP, which was created by the 2010 federal healthcare reform bill. In 28 states, PCIP is administered by a state authority. In 22 states, which did not accept partnership in PCIP with the federal government, the program is administered directly by the federal government. To qualify for PCIP, an applicant must show evidence of having been rejected for insurance due to a preexisting condition and must have been without insurance coverage for at least six months. Applicants for the PCIP program will likely pay higher premiums. The PCIP rates are subsidized by the federal government, so PCIP rates may be less than the state pools. Having coverage through a state pool plan will disqualify a person from PCIP unless that applicant has been without coverage for at least six months. To check out the PCIP, go to http://www.healthcare.gov/ and click on Pre-Existing Condition Insurance Plan. The PCIP program will terminate the first of 2014 when the healthcare reform bill requires that all preexisting condition exclusions are prohibited. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 10" A 2010-2011 WISER Health Insurance Consumer Guide - Part 9 (Continued)
More of What's the best type plan? Why?
Health Savings Account (HSA) Plans: For the purposes of this guide, we will term this class of plans as HSA plans. However, you need to understand that we are also talking about high-deductible health plans, HDHP's, which we will define as any health insurance plan with an annual deductible of $1,000 per person or more. An HSA plan is actually an HDHP that meets HSA deductible requirements ($1,200 per person in 2010) and is combined with a health savings account that is similar to an IRA and that allows you to save money to pay for qualified medical expenses not covered by insurance on a tax-free basis.
The deductible and total out-of-pocket limits that comply with HSA requirements change each year, so you have to check on the current regulations. In addition, medical expenses that can be paid from the tax-free HSA account must be on the IRS approved qualified expenses list. You must contribute pre-tax monies to the HSA fund each year. Then, you can either pay appropriate medical expenses out of that HSA fund tax free or roll the fund balance over to apply to future medical expenses. Earnings from the HSA fund are also retained tax free.
HSA plans and benefits can be applied to Indemnity plans, to PPO plans or to POS plans provided those plans comply with and are coordinated with HSA high deductibles and other requirements.
Why would you want an HSA plan? Because it offers the best combination of reduced cost and optimal self control of your healthcare, while protecting against the catastrophic costs of a major illness or injury. Because the high-deductible plan design adheres to the basic premise of insurance, it is the most cost-effective approach for securing insurance coverage. Because you are essentially self-insuring to the extent of your deductible and MOOP limit, your exposure to higher but affordable costs in any year could be greater.
A survey indicates that in any given year, only eight percent of insureds exceed that limit, while 92 percent do not. To be sure that you are in a financial comfort zone, you need to "Work The Numbers", as described in part 4 above, to establish your annual limit for premiums + deductible + coinsurance to MOOP. You will be protected against the killer catastrophic loss, so you can have peace of mind. A 2010-2011 WISER Health Insurance Consumer Guide - Part 9 (Continued)
More of What's the best type plan? Why?
Health Maintenance Organizations (HMO) Plans: An HMO is the icon for managed care which has the objective of providing an acceptable quality of care while holding down cost by trying to promote wellness through preventive care and the delivery of medical services through controlled and tightly managed provider services.
With an HMO, you pay a specified premium for a menu of HMO benefits that are delivered though the HMO network of physicians, hospitals and support facilities. Some HMO's develop and operate their network of service providers through contractual arrangements with independent providers. Other HMO's own the service providers, so that the network is actually an internal or "company store" type of operation. Either way, the objective is to manage service delivery in a controlled manner so that it can deliver an acceptable quality of care at reduced cost.
In an HMO you choose a primary care physician, a PCP, from among the HMO staff or network choices. Your PCP coordinates and manages your care by referrals to HMO network services providers. To see a specialist, go to a hospital or get lab work done, you must have a referral from your PCP. The HMO network concept is similar to the networks used in PPO and POS plans, but the HMO program is usually more restrictive in an effort to control costs.
Like other plan forms, you pay a premium to the HMO. Most HMO's charge a copay for office visits, some have a copay for hospital visits. With a true HMO, you may not have to deal with insurance features such as coinsurance, MOOP's and maximum coverage limits. However, some insurers offer HMO-type plans that incorporate features that are a hybrid between POS and HMO formats.
Why would you want an HMO? Lower cost. HMO's are typically the lowest cost options for traditional-type health insurance plans. The price you pay for the low cost of an HMO is loss of control and flexibility in managing your own healthcare. The corollary to that loss of control can be lower quality of services and reduced access. A 2010-2011 WISER Health Insurance Consumer Guide - Part 9
More of What's the best type plan? Why?
Point-of-Service (POS) Plans: Along the management spectrum line from self management to managed care, the POS is another step from the self-managed PPO and toward the managed care HMO. The POS combines components of the PPO and the HMO, but there can be many shades of gray. Some plans allow you to self select your service providers, others require coordination through a primary care physician. Plans that simulate a PPO plan will have PPO network guidelines, copay and coinsurance features. Those that mimic an HMO format will have HMO guidelines with only a copay. You will be able to obtain services outside the respective PPO or HMO network at higher cost factors.
With POS plans you will typically pay a copay. You may pay a low deductible, and maybe a low coinsurance expense. These cost factors will be higher for out of network providers.
Why would you select a POS plan? If you have some concern in selecting service providers, but greater concern in reducing cost and saving money. If you are comfortable with the premise that medical care standards are good and sufficient no matter the provider, then cost becomes a more prominent factor. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 9" A 2010-2011 WISER Health Insurance Consumer Guide - Part 8
5. What's the best type plan? Why? Insurance plans are classified by types which draw distinctions in the way services are delivered, managed and paid. Traditional Indemnity Plans are at the self-management end of the spectrum and health maintenance organizations (HMO's) are at the managed care end. In between are point of service (POS) plans and preferred provider (PPO) plans which have many variations that blur the distinctions among them. It is often difficult to measure where a plan fits on the spectrum. The fifth plan, called the high deductible health plan (HDHP) or the health savings account plan (HSA) is a departure from the others in regards to management and payment but not in delivery of services. Traditional Indemnity Plans: With this plan, you can go to any doctor on a fee for service basis. Either the service provider submits a claim to your insurance company or you pay the provider and submit the claim for reimbursement. Typically, indemnity plans pay about eighty percent of the "usual and customary" medical charges and you pay the balance under the coinsurance terms. You will be insured only for covered procedures, but indemnity plans usually offer a broader definition of coverage. If a service provider charges more than usual, you are responsible for the excess. So, you need to negotiate fees before services. Most indemnity plans have a deductible as well as typical insurance plan features that are described in other sections of this guide. If the plan qualifies, it could be coordinated with an HSA to maximize tax benefits. Why would you favor an indemnity plan? Because it offers the most control in selecting service providers without network limitations. It offers you the opportunity to be proactive in managing your care. Can you save money? Probably, if you are willing to spend the time to do it. Preferred Provider Organization (PPO) Plans: Closest to the indemnity plan in regard to control but a step toward managed care, the PPO negotiates discounts with service providers to form a "network" of discount fee providers. You can see any network service provider at any time without referral. You can also see a service provider outside of the network, but that will cost you more because the insurer does not have a discount agreement with that provider. With the PPO plan, you will typically pay a copay, a deductible, a coinsurance factor and a MOOP in the network, but such expense factors will be higher out of network. Why would you prefer a PPO plan? Second to the indemnity plan, the PPO offers more control in selecting physicians and other service providers, but you have to deal with network limitations. If the network includes the physicians that you favor, network limitation may not be a factor. Because the insurer pays less with the discount network, premiums will be lower than an indemnity plan, so you might achieve both better control and reduced cost. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 8" A 2010-2011 WISER Health Insurance Consumer Guide - Part 7
More on choosing a health insurance plan. What's important?
Maternity: Maternity benefits are available in many group plans, but are not offered in most individual policies. Some plans have optional maternity riders, but the premiums may be high and the deductible is usually high. It is often cost-effective to pay out-of-pocket for delivery rather than paying the premium for a very high deductible plan. Most policies will cover any complications for the mother.
Dependent Children Coverage: Under the 2010 Healthcare Reform Bill, effective October, 2010 for existing plans, insurers must cover dependents up to age 26 and can not exclude dependents for any preexisting conditions. You should consider covering your dependent children under your group or personal family plan if that is affordable. You have two government-related alternatives to consider. The first is Medicaid, which is a federally-sponsored, state-administered program for families under the federal poverty income level. The second is a similar federal / state program called the State Children's Health Insurance Plan, or SCHIP. SCHIP offers subsidized health insurance assistance to children of families with incomes up to or about three times the federal poverty income level. Check with your state of residence for details.
Pre-Existing Conditions: If you or a family member has a pre-existing health condition, that can be your overriding concern in seeking health insurance. If the condition is serious in nature, group coverage provided by a large employer might be the best, if not the only private option. Many small-group plans will either deny coverage, limit coverage or offer coverage at increased premiums. Most individual and family plans will not cover serious conditions and will limit or delay coverage of less serious conditions, usually at increased rates. Always be candid about your situation in inquiring about coverage to avoid spinning wheels that will end in denial. Make your inquiry through an insurance broker. Different insurers have different underwriting guidelines. What is a denial to one may not be to another. A knowledgable broker will know where to go and can be your best advocate.
All but eighteen states have high-risk pools that can provide coverage to resident insureds who have been denied private coverage because of a pre-existing condition. These state pools usually carry high premiums. In addition, the state pools conflict with the federal pre-existing condition coverage program, because they disqualify insureds from participation in the federal plan unless the consumer is without coverage for at least six months.
The Healthcare Reform Bill of 2010 legislates changes to handling pre-existing conditions in several steps until 2014. It prohibits pre-existing condition exclusions for dependents beginning in October of 2010. It also offers a federally-subsidized, state-administered program, called Pre-existing Condition Insurance Plan, or PCIP, for consumers who have been denied coverage due to a pre-existing condition and who have been without coverage for at least six months. You can check out PCIP at www.healthcare.gov/ . All pre-existing condition exclusions will be prohibited effective January 1, 2014. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 7" A 2010-2011 WISER Health Insurance Consumer Guide - Part 6
4. How should you choose a health insurance plan? What's important?
You should approach the purchase of health insurance with the intent to be an informed, savvy buyer the same way you make any other important financial commitment or major purchase. Do your homework. Review information, so that you know the basics, can comprehend your options, can ask good questions and understand when you get good answers. Then, you can make informed decisions.
Study The Details: Review the plan summary to understand what is covered and what is not. What about health issues that are important to you? Issues for which you or your family members have a history or exposure? What about an unexpected serious illness or injury? How would that be handled according to the plan summary? Familiarize yourself with the rules that would apply. Do you foresee a problem?
Check Out The Network: Most policies are allied with a "Network" of physicians and hospitals which are contracted with the insurer to provide services at lower fee rates, thus permitting the insurer to hold down premium costs. Services from providers outside the network cost the insurer more, so usually involve penalties on you in the forms of higher copays or deductibles and lower coinsurance factors. Determine if physicians and hospitals you prefer are in the network.
Work The Numbers: What do you typically spend annually on healthcare issues? Check your previous few year's records to get an estimate. Then, add the total cost of annual premiums for the proposed health insurance plan plus the annual out-of-pocket limit. If that total is too high, work the numbers. You could trade a higher premium for a lower out-of-pocket limit. You could opt for a higher deductible to reduce premium. Remember that up-front benefits typically cost more than their benefit value. Your primary objective should be to protect against catastrophic loss you can not afford. Figure the maximum annual cost you can comfortably afford, then seek the most coverage that will buy. That usually will be a high-deductible, no copay HSA plan. Check The Insurer: With the passage of the Healthcare Reform Act, insurance companies are becoming more restricted. By 2014, coverage will be compulsory for all applicants, regardless of health conditions. While that sounds good for health insurance consumers, such universal coverage is very expensive. Insurance companies will have to pass on increased costs of higher claims. As a result, when buying a new health insurance policy, you should check out the insurance company. Are they reputable? Do they have a proven track record? Are they financially stable? You can check independently through the insurance rating firm, A.M. Best at www.ambest.com . Best's "Secure" class of insurance company ratings range from a high of A++ Superior down to B+ Good. You should probably avoid any insurer rated below B+. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 6" A 2010-2011 WISER Health Insurance Consumer Guide - Part 5
3. With health insurance, what should you expect to pay out of pocket?
In summary, for each calendar year you will pay for your insurance and normally pay the first sums spent in the forms of the copay and deductible. After that, you will pay a minor portion of covered claims amounts, the coinsurance, up to an annual limit called the maximum-out-of-pocket. If you reach the MOOP, the insurer will pay all covered costs for the remainder of that year. Of course, you would pay for any uncovered expenses, and you would pay into an HSA or any other tax advantaged fund from which uncovered but qualified expenditures might be paid. More detailed explanations follow:
Premium: This is the amount you pay for your insurance policy, usually paid monthly;
Deductible: The amount you must pay each year on covered medical expenses before your health insurance plan begins to pay. Lower deductibles are offset by increased premiums. 92 percent of insureds overpay in premium cost to reduce their deductible lower than they need;
Copay: The flat fee you pay to the medical service provider each time you receive medical care. For example, if your doctor's office charges $50 for a standard office visit and your copay is $20, you would pay $20 and the insurer would pay $30. Lower copays can be expensive and may be more than offset by higher premium;
Co-Insurance Factor: The co-insurance factor is the percentage of claims expenses paid by the insurance company after the deductible has been satisfied. The higher the co-insurance (for example 80% versus 70%), the higher your premium. Any coinsurance amount paid by you would apply to the maximum-out-of-pocket amount, or MOOP. Once you reach your MOOP, the insurer will pay the balance of covered claims for the rest of that calendar year;<./p> Maximum-Out-Of-Pocket: This is a provision that specifies the total amount you would pay out-of-pocket for covered claims, usually expressed as a calendar year limit. The lower the MOOP amount, the higher the premium;
Uncovered Claims: Expenses for any medical services for conditions that are normally not covered by insurance unless added by rider (such as maternity) or that are specifically excluded or limited by rider (such as a pre-existing condition that is not covered for some initial period);
Health Savings Account: For qualified high deductible health plans, an HSA matches with the deductible as an IRA-type, portable savings account that permits you to save and control funds on a tax-advantaged basis. Contributions to the HSA are pre-tax. HSA funds can pay qualified healthcare expenses without tax consequences. HSA balances not paid out for qualified medical expenses can rollover annually tax-free until you are age 65. After age 65, you can no longer contribute to the HSA, but you can withdraw funds from the HSA, although a non-medical application is a taxable event. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 5" A 2010-2011 WISER Health Insurance Consumer Guide - Part 4
What does health insurance cover? What's not covered?
Like all financial contracts, which is what an insurance plan is, the devil is in the details. What is covered depends on the type of plan, the plan design, the service provider network associated with the plan, the terms and conditions specified in the plan, and any exclusions or limitations that are made a part of the plan by addendum or rider.
All insurance plans must be filed by the insurance company and approved by the appropriate state and/or federal authorities. Except for Original Medicare, there is no such thing as a "standard insurance plan", so most plans differ somewhat among and within each insurer. Most insurers publish a summary of benefits of their plans for easy review. Always review the summary to check and understand the primary benefits and any particular benefits that are important to you. In addition, check any addendums or riders for additions, exclusions or limitations.
A typical plan summary will describe coverage options for office visit copays, for deductibles, for out-of-pocket maximums, for preventive care services, for physician services, for facility inpatient and outpatient services, and for mental health and alcohol or chemical dependency care services. It will also describe coverage for other medical services or products such as skilled nursing services, hospice, home health care, urgent care, spinal adjustments or care, durable medical equipment, ambulance services, maternity benefits and transplants. The summary will also specify the lifetime maximum benefit. You should always assume that anything not specified as covered in the plan summary is not covered. Again, covered services may be limited or excluded by special stipulation in a rider or addendum attached to the policy. So, always read the summary and any attached riders. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 4" A 2010-2011 WISER Health Insurance Consumer Guide - Part 3
There is one other factor in this area of need for insurance that is becoming prominent. That involves the governmental mandate that insurers must offer health insurance coverage to all applicants without regard to pre-existing health conditions. In state-controlled health plans, such as Massachusetts, and in the March, 2010 Federal Healthcare Reform Plan, this required coverage provision only works if everyone is required to buy coverage.
Without such a purchase requirement, individuals who "game" the system will not buy insurance until and unless they are ill or injured. Insurers will then have to cover them under a guaranteed loss condition. In Massachusetts, where the requirement to buy insurance has not been enforced, insurance companies are now faced with the dilemma of either going bankrupt or getting out of the program. Either way, the state healthcare program will crash. Taxpayers will be left with the bill.
Until Obamacare is fully implemented in 2014, the federal government is offering an interim subsidized plan called "PCIP" to cover those who are uninsured due to a pre-existing health condition. Like Massachusetts, the federal government is requiring everyone to buy insurance and is charging the Internal Revenue Service with the responsibility for enforcement.
IRS is hiring more than 15,000 new agents to accomplish this and will likely tie enforcement to individual tax return requirements. However, several of the states are filing lawsuit against the federal government claiming that this requirement to buy insurance is unconstitutional and therefore unenforceable. So, this required insurance question is still a "ball in the air".
A ball that is no longer in the air is the requirement that insurers offering child-only plans must cover all pre-existing conditions, as described in our last blog entry. Many insurers have dropped such coverage. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 3" Healthcare Reform Impact: Insurers Exit Child Only Market
Effective September 23rd, Federal mandates under the Patient Protection and Affordable Care Act, also known as Obamacare, require that insurance carriers that offer child-only plans must make such plans available to all children under age 19 without regard to pre-existing health conditions.
Obamacare provisions further provide that insurers must continue such coverage without maximum limits. However, Health and Human Services officials have not been able or willing to clarify questions raised by the insurers about continuing insurer obligations under child-only plans.
According to insurers, these federal mandates have created an unbalanced market for child-only plans as well as a future for which they can not accurately assess risk. Insurers claim they can not offer affordable rates with confidence.
As a consequence, September 23rd is the date that will signal a mass exodus of insurers from the child-only market for new individual policies.
Obamacare supporters have reacted that insurers are taking a step backwards. However, forcing private insurers out of the market is exactly what many Congressional members who voted for Obamacare said they wanted. Permalink -- click for full blog post "Healthcare Reform Impact: Insurers Exit Child Only Market" A 2010-2011 WISER Health Insurance Consumer Guide - Part 2
People who have health insurance tend to be healthier because they are more conscious of their health and wellness affairs and because they are less reluctant to see a physician when they encounter a health issue. Another reason you need health insurance? To help stay healthy.
One factor of health insurance with which Americans have lost perspective and control is that many people have come to expect health insurance to pay for all of their routine health expenses no matter how trivial. They no longer think of health insurance in terms of saving them from catastrophic expenses. This has contributed to the radical increase in the cost of healthcare and of health insurance premiums.
When health insurance claims payments are applied to first dollar costs to pay for routine and affordable healthcare expenses, there are several adverse effects. It promotes more claims because insureds have nothing at risk, no skin in the game. They consider they are spending only the insurance company's money, so they are not inhibited by cost. They are not value shoppers. People who would never buy another product or service without knowing the cost often have no idea what they are spending for healthcare.
In seeking first dollar coverage, health insurance consumers over pay in premiums to get low deductibles and low co-pays that they never use. Their approach to buying health insurance is exactly the opposite to what it should be. They create a lose / lose scenario that costs them more and drives up insurance rates. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 2" A 2010-2011 WISER Health Insurance Consumer Guide - Part 1:
Preface:
It is our belief that no one will manage your health insurance and wellness affairs better than you will, if you know how. The objectives of this Consumer Guide and of our Fitness Culture Health Insurance informational website are to show you how.
Our goal is to help you achieve success as a savvy buyer of health insurance and healthcare services. A buyer who understands your options, can make informed decisions with realistic expectations and can better manage your outcomes.
When you know what's likely to happen, you are better prepared. You will have fewer surprises and disappointments. We can't eliminate system challenges and adverse events, but we can help you minimize them and manage them. That is easier when you know what to expect and why. 1. Why do you need health insurance?
The basis for answering this question must focus on "what is insurance?" and "what is the purpose of health insurance?" At its core, insurance is the pooling of financial assets by many to protect against a potential but yet unrealized catastrophic risk that may be experienced by a few.
Specifically, therefore, the purpose of health insurance is to protect against the catastrophic expense of treatment and rehabilitation that you might incur as the result of illness or injury of yourself or a family member. Health insurance will not restore your health from illness or injury, but it will help you pay for the cost of care and restoration.
So the basic and most important reason to get health insurance is that it is too risky financially to go without it. Permalink -- click for full blog post "A 2010-2011 WISER Health Insurance Consumer Guide - Part 1:" Group Quote GuideHow To Get The Best Group Health Plan Quotes Permalink -- click for full blog post "Group Quote Guide" Group Quote RequestGroup health insurance plan quote request form. Permalink -- click for full blog post "Group Quote Request" Pseudo Group Health PlansPseudo Group Health Plans are low-cost substitutes Permalink -- click for full blog post "Pseudo Group Health Plans" Group Health Insurance Cost FactorsHow to control group health insurance cost factors Permalink -- click for full blog post "Group Health Insurance Cost Factors" Affordable Group Health Insurance PlansHow to design an affordable group health insurance plan Permalink -- click for full blog post "Affordable Group Health Insurance Plans" Group Health Insurance Eligibility and Underwriting FactorsManipulate group health insurance eligibility and underwriting factors to your advantage. Permalink -- click for full blog post "Group Health Insurance Eligibility and Underwriting Factors"
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