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Health Insurance Q&A

What insurance plans do you accept?

Click here to see the current list of non-Medicare and Medicare Plans we accept

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What is the basic difference between individual and group health insurance coverages?

An individual policy is purchased by you directly with the insurance company.

With a group health insurance policy, the group is the master insured and the insurance company contracts with the group. Insurance certificates, issued to a participating member, act as your policy. Often group health insurance costs less than would have been charged had the insurance company sold individual policies to each member separately. In addition, group health insurance often contains special coverages that are not available or are very expensive on an individual basis. The purchasing power of the group makes this economically feasible.

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What types of individual health insurance policies are available?

There are a variety of policies which insurance companies offer on an individual basis. Some of the more common types of policies include:

  • Major Medical - provides coverage for doctor visits, surgery and hospitalization or ongoing illnesses.
  • Hospital and Surgery - provides coverage solely related to hospital stays and surgical services, such as room and board, laboratory tests, X-rays, plus doctors' charges
  • Hospital Confinement Indemnity - a policy designed to pay a set amount (an indemnity) for each day you are an "in-patient" at a hospital.
  • Health Maintenance Organizations (HMOs) - centralized service provider, commonly with a general practitioner (limited selection of participating doctors) coupled with coverage by specialists upon referral. Doctor visits, surgery, hospitalization and often reduced-rate prescription medicine are provided. May also cover preventive care, often not included in major medical policies.
  • Specified Disease (also called “Dread Disease”) - covers costs associated with a single disease, such as cancer, AIDS, heart attack, etc.
  • Short-Term - typically a major medical policy but with coverage lasting only for a specified length of time. Might be purchased to cover the time you are between jobs.
  • Accident Only - provides coverage for doctor visits, surgery and hospitalization resulting from an accident (no coverage for disease or illness).
  • Dental - provides coverage for costs associated with dentists and orthodontists.
  • Vision - provides coverage for sight correction
  • Home-Health Care - care provided to enable you to remain in your home while receiving services which can range from assisted living (help around the house) to around-the clock nursing with other health care providers on call.
  • Long -Term Care - coverage provided to individuals who otherwise would not be able to take care of themselves. A range of services from delivery of prepared meals, assistance with managing the residence, to stays in residential facilities. Often associated with long-term illness and the elderly.
  • Limited - Benefit - not very common, a bare-bones type of coverage intended to cover specific situations.

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What is a Basic Plus Plan?

A base plus plan is a two-part health insurance plan. Basic medical coverage -- for such expenses as hospitalization, surgery, physician's visits, diagnostic laboratory tests and x-rays -- is provided under the first part. There may be limits on these expenses, such as a limited number of hospital days and a surgical schedule, but no deductible or coinsurance applies to the covered expenses. The employee is reimbursed starting with the first dollar of expenses. The second, or major medical, part of the plan covers other health expenses. The coverage is broad, with fewer limits; however, a deductible is required before the employee is reimbursed for expenses. From the employee's point of view, base plus plans appear to provide more generous benefits because of the lack of deductibles and coinsurance in the basic medical part.

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What types of group health insurance coverages are available?

Group health insurance makes individual coverages available on a group basis. A primary advantage is the purchasing power of the group that achieves reduced acquisition costs for the insurance company. The insurance company is then able to reduce the rate it charges to provide insurance for each individual member of the group. The Group is in a better position to bargain with the insurance company for additional benefits for its members. There are a variety of types of group health insurance plans, the major distinctions being the mechanism used for purchasing the insurance. Common varieties of group health insurance plans include:

  • Fully Insured Employer Group - The employer contracts directly with the insurance company to provide certificates to covered employees. Typical arrangement is either for major medical or health maintenance organization (HMO) coverages.
  • Small Employer Group - Insurance companies group certain industries together and then gather small employers together to form a larger group. These groupings enable the insurance company to better predict the cost of providing the insurance. The small employers can then get coverages otherwise not available unless charged a much higher rate. All the small employers get the same policy without deviation.
  • Large Employer Group - same as a fully insured employer group with direct contract between the insurance company and the employer to provide individual certificates to covered employees.
  • Health Maintenance Organization (HMO) - a group program under which the organization provides a full range of medical services to participants. Participants are either assigned or select from a group of general practitioners, who then refer their patients to specialists when the need arises. Good generalized system of providing medical care which is marked by curtailment in selection by the individual participant of the health care provider who render services. Individual participants insured by an HMO are called ":enrollees"
  • Self-Funded ERISA - available to large groups. The group contracts with an insurance company or third-party administrator to handle the paperwork. The group pays for all costs associated with the operation of the insurance plan itself, along with the added cost for administration.
  • Association Group - similar to a fully insured employer group, the distinction being that instead of an employer, it is a different type of group, such as a credit card company offering insurance as a benefit to its cardholders or a church group offering insurance to its parishioners.
  • Group Managed Care - a long-term health insurance plan offered through the group or association.
  • Preferred Provider Organization – another kind of health care network (doctors, hospitals, and other health care providers) that contracts with health insurance companies.

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How can I get health coverage?

Employer-sponsored group insurance
Millions of people obtain their insurance through their employment. Upon reaching the eligibility requirement (such as a full-time employee working more than 40 hours per week for a six month continuous basis), the employee becomes covered under the employer's group insurance policy and the employee is issued an insurance certificate or health insurance card. Medical insurance is a very common fringe benefit of employment. Some employers will provide coverage solely for the employee, some employers pass along the cost of dependent coverage to the employee, while other employers pay the entire cost of medical insurance for the employee and his/her family.

Individual insurance
Health insurance which is purchased by the individual. Some major health insurance companies offer a broad range of coverages and options to individuals, who pay directly out-of-pocket for the cost of the insurance. Many insurance companies require completion of an exhaustive application and may require a medical examination before coverage will be offered to the individual.

Government-sponsored insurance
Some states offer health insurance benefits to their residents, often with certain income requirements for eligibility. These plans are designed for the "working poor" - individuals who are employed but no health care coverage is available where they work. This enables the state to protect its residents from catastrophic loss due to illness, disease or accident without placing an additional burden upon its program for the truly indigent.

Association-sponsored insurance
You may belong to a group or organization that offers health insurance as a benefit of membership. Check membership benefit statements, brochures, or ask organizations leaders to determine availability of health insurance through your group or organization.

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What’s the difference between primary and secondary coverages?

Since many people have available medical insurance from more than one plan (such as two employed spouses covered under group health insurance plans), insurance companies do not want insureds to profit through their health insurance. To prevent double recovery, most health insurance plans have provisions which determine how primary versus secondary coverage will be determined.

Primary coverage is provided through the plan of which they are a member (such as the spouses both covered through their respective employment - the primary coverage is provided under the plan provided by the employer of each spouse) or the plan under which the member has been a participant for the longest time period.

Secondary coverage, usually as a result of being covered as a dependent under someone else's health insurance plan, provides reimbursement for medical expenses after exhaustion of coverage available through the primary plan.

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What services and items might be paid for under my health insurance?

Medical expenses as the result of accident, illness, injury, and disease are typically covered by medical insurance. The particulars of how much coverage for each expense incurred is determined by the provisions of the particular health insurance policy.

Typically doctor visits, surgeon and surgery expenses, costs of hospitalization, and follow-up therapy are covered by health insurance. Some plans provide for psychiatric care, drug and alcohol rehabilitation programs, and prescription medicines.

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What kind of exclusions and limitations might be in my health plan?

There are a variety of exclusions and limitations with respect to health insurance. Common exclusions include pre-existing conditions (subject to portability of insurance as discussed below), substance abuse, attempted suicide, mental illness, reimbursement through a Workers’ Compensation insurance program, cosmetic or elective surgery and procedures, optical and dental coverage, prescription medicine, and procedures determined to be preventive care.

Many individual health insurance policies exclude coverage for medical conditions that exist prior to the inception of the coverage. This is commonly referred to as a "pre-existing condition" exclusion. Common pre-existing condition periods are six months and 1 year prior to the inception of the insurance coverage. Other common exclusions include: psychiatric care, alcohol and drug related problems, prescription medicines, and elective or cosmetic surgery and services.

Other common limitations of coverage are listed below under Health Insurance Purchase Considerations.

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What are some common cost-containment procedures used by insurance companies?

In order to curtail health insurance costs from spiraling out-of-control, most insurance companies have instituted a variety of cost-containment features to their Individual and Group health insurance plans. Common cost-containment procedures, under which coverage may be denied or restricted, include:

  • Same day surgery admission - instead of allowing a person to be admitted the day before surgery which results in a charge for an additional day of hospitalization charges, the patient is required to be admitted the day that the surgery is to be performed.
  • Pre-admission testing - before authorizing hospitalization or surgery in a non-emergency situation, additional testing to determine whether hospitalization or surgery is required must be performed.
  • Outpatient surgery requirement - many surgical procedures may now be performed on an outpatient (non-hospitalized) basis reducing the need for reimbursement of hospitalization costs.
  • Second opinion - before procedures, care, and related medical expenditures will be authorized, the insurance company requires a second opinion from a qualified health care practitioner.
  • Prior consent for hospitalization - you are required to present to the insurance company the particular course of treatment proposed by the health care practitioner before authorization for coverage will be provided.
  • Limitation to "usual, customary and reasonable" charges - such a limitation enables the insurance company to determine that health care procedures, services and related medical expenditures are outside or exceed the "usual, customary and reasonable" charges for particular courses of care or procedures used for treatment of particular conditions or exceed the costs for a given geographic territory.
  • Deductibles - The amount you yourself have to pay out-of-pocket before reimbursement of your expenses from the insurance coverage. It is usually a flat dollar amount. The higher the deductible, the lower the premium.

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For insured employees with dependent coverage, does the deductible for each person have to be satisfied before reimbursement begins?

Each person covered under a group health insurance plan must meet a deductible before expenses will be covered. However, plans usually include some type of family deductible in order to limit a family's exposure for health care expenses. The family deductible is usually some multiple of the individual deductible, generally two or three. For the family deductible to be satisfied, the combined expenses of covered family members are accumulated. Some plans require, however, that at least one family member satisfy the full individual deductible before the family deductible can be met.

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What is the coinsurance clause in medical expense plans and how does it work?

Coinsurance, sometimes called "percentage participation," requires you to share in the cost of medical care. Under an 80/20 coinsurance provision, the medical expense plan pays 80 percent of eligible medical charges above any deductible. You are required to pay the remaining 20 percent. Other coinsurance arrangements, e.g., 70/30 or 90/10, are sometimes used. In the event of large or catastrophic medical expenses, an insured might suffer severe financial hardship due to the operation of the coinsurance clause. To compensate for this possibility, many major medical expense plans contain a coinsurance cap, or stop-loss limit. This provision places a limit on your out-of-pocket costs in a given year arising from the operation of the coinsurance clause. The size of the coinsurance cap generally ranges from $2,000 to $3,000, depending on the plan, although limits as low as $1,000 are sometimes used. Once the coinsurance cap has been reached, all eligible expenses above this amount are paid in full, up to the plan's overall limit of coverage.

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What is the difference between coinsurance and co-payment?

On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a co-payment or copay provision, you usually is required to pay a set or fixed dollar amount (e.g., $10, $20, or $30) each time a particular medical service is used. Copay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal co-payment is applied to each office visit and to each prescription that is filled.

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Are all prescription drugs covered under health care plans?

Generally, only prescription drugs that are for treatment of an illness or injury are covered, subject to applicable deductibles and coinsurance. Many plans do not cover contraceptive prescription drugs, for example, or nicotine chewing gum prescribed for smokers who are trying to quit.

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Are there different types of drug plans?

There are a number of variations, but the principal types of prescription medication plans are open panel, closed panel, mail order and prescription drug card plans.

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My insurance used to pay for part or all of my prescription. Why did that change?

Insurance companies frequently change their formularies — the list of the medications for which they will pay, and the tiers or amounts they pay for various drugs. They may have removed your medication or changed the tier to which it is assigned. If they removed your medication, you should contact your medical practitioner and request that he or she either change your medication or advise your insurance company that the drug you are taking is a "medical necessity."

If you are covered by CMSP or Medical, there are limitations on the number of prescriptions they will pay for in a given month — usually 6.

Depending upon your policy period, your annual deductible may have re-started.

And if you are covered by Medicare Part D, you may be what is called the donut hole.

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There are so many different health plans. What do all those letters – HMO, PPO, POS, ... —mean?

HMO: An HMO (Health Maintenance Organization) is an organization that provides or arranges for coverage of certain health care services required by members of the organization. Typical HMO coverages include access to a primary care physician, emergency care, and specialists/hospitalization when needed.

Many HMOs operate with preventative medicine in mind by addressing your health care needs while you are healthy so as to prevent disease or illness.

HMOs are valuable in providing good care for many members – many HMOs take very good care of their members’ health care needs while managing costs.

Critics of HMOs point out concerns about a lack of selection of primary care physicians, "assembly line" medicine, and denial of adequate referrals in the event of disease or illness. Critics often claim that HMOs may deny certain claims and may make health care decisions based upon profitability as opposed to providing the best level of care for their patients.

IPO: IPO (Independent Provider Organization) operates by having an HMO contract directly with independent physicians to provides services to HMO members.

PPO: PPO (Preferred Provider Organization) is a form of managed care under which health care providers contract to provide medical services at pre-negotiated rates. Members who subscribe to a PPO are required to use the health care providers who participate in the PPO network - utilization of a health care provider outside the PPO network may result in the member paying more out-of-pocket for services which could have been provided within the network.

HMOs often use a PRO (Peer Review Organization) to assure that members receive appropriate services that meet professional standards of care. Complaints regarding levels of service are often referred to the PRO for resolution.

POS: POS (Point of Service) plans allow the individual policy holder or certificate holder to visit out-of-network, non-participating doctors for a fee. If the services of a non-participating health care provider are utilized, the individual often obtains restrictions of benefits or incurs more out-of-pocket costs.

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Medicare, Medicaid and Medigaps (Medsupp) — What’s the difference?

Medicaid: Medicaid is the federal program which provides for the health care needs of certain low-income people.

Medicare: Medicare is the federal program which provides for the health care needs of the elderly, the blind and the disabled.

Medigap: Medigap (also known as medical supplemental insurance) refers an individual insurance policy which can be purchased to cover certain health care services and costs which are not provided by Medicare. Medigap insurance is becoming very important to people covered under the Medicare program since reduction in levels of benefits and curtailment in availability of services have become reality as a result of the need to control the costs of this program.

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What is the "Medicare Donut Hole?"

In 2006, the first year of operation for Medicare Part D, the donut hole in the defined standard benefit covered a range in true out-of-pocket expenses (TrOOP) costs from $750 to $3600. (The first $750 of TrOOP comes from a $250 deductible phase, and $500 in the initial coverage limit, in which CMS covers 25% of the next $2000.) The dollar limits increase yearly.

The following table shows the Medicare benefit breakdown (including the donut hole) for 2009. In 2010 the total TrOOP has increased to $4,550 before catastrophic coverage begins.

  • "Total drug spend" represents the actual cost of the drugs purchased, factoring in any Medicare discounts.
  • "TrOOP" (true out-of-pocket expenses) represents the amount of money you have paid for your medictions.
  • The donut hole is shown in grey.
Total drug spend TrOOP Out-of-pocket cost Portion covered by Medicare
$0–$295 $0–$295 Deductible is out-of-pocket No Medicare coverage of costs
$295–$2,700 $295–$896.25 25% out-of-pocket 75% covered by Medicare
$2,700-$6,154 $896.25-$4,350.25 All costs are out-of-pocket No Medicare coverage of costs
over $6,154 over $4,350.25 5% out-of-pocket 95% covered by Medicare

This is the benefit structure defined by Medicare, and defines the amount of money that CMS will reimburse to health plans for covering prescription drugs. Individual health plans may choose to offer alternative benefit structures, generally with higher premiums, that either reduce or eliminate the donut hole.

Individuals identified as "dual eligible" by CMS are not subject to the donut hole, as their prescription coverage is fully subsidized.

Medicare dual eligibles are Medicare Part A and/or B recipients who either [1] qualify for Medicare Savings Programs (MSP) or [2] qualify for Medicaid benefits. Dual eligibles generally qualify for the QMB benefits, in which the beneficiary's non-Medicare coverage is covered by Medicaid, effectively providing full health care coverage. With the advent of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, these dual eligibles have automatically been enrolled to a random Medicare Part D plan, effective January 1 of 2006. As a result of this auto assignment, participants who were already enrolled in a Medicare Advantage HMO, may have been automatically dis-enrolled from their medical plan to allow for part D enrollment. Medicaid will still cover drugs for dual-eligible patients that are not covered by Medicare Part D, including certain controlled substances. Pharmacies know by automation who these patients are. Individuals that qualify for dual eligibility will be paid first by Medicare and the remainder will be paid by Medicaid.

Section 231 of the Medicare Modernization Act of 2003 created a new type of Medicare Advantage coordinated care plan focused on individuals with special needs called the the Medicare Advantage Special Needs Plans (SNP) program. "Special needs individuals" were identified by Congress as: 1) institutionalized; 2) dually eligible; and/or 3) individuals with severe or disabling chronic conditions. SNPs must offer care to the unique needs of low-income, chronically ill, and institutionalized Medicare beneficiaries. Given their expertise in serving these populations, many Medicaid managed care plans also offer SNPs to serve dual eligibles. The program was set to expire in 2008 and has since received short term authorizations from Congress.

Impact

Every Part D plan sponsor must offer at least one basic Part D plan. They may also offer enhanced plans that provide additional benefits. For 2008, the percentage of stand-alone Part D (PDP) plans offering some form of coverage within the doughnut hole rose to 29 percent, up from 15% in 2006. The percentage of Medicare Advantage/Part D plans (MA-PD) plans offering some form of coverage in the coverage gap is 51%, up from 28% in 2006. The most common forms of gap coverage cover generic drugs only.

Among Medicare Part D enrollees in 2007 who were not eligible for the low-income subsidies, 26% had spending high enough to reach the coverage gap. Fifteen percent of those reaching the coverage gap (4% overall) had spending high enough to reach the catastrophic coverage level. Enrollees reaching the coverage gap stayed in the gap for just over four months on average.

Premiums for plans offering gap coverage are roughly double those of defined standard plans. The average monthly premium for stand-alone Part D plans (PDPs) with basic benefits that do not offer gap coverage are $30.14. The average monthly premium for plans that do offer some gap coverage are average $63.29. In 2007, eight percent of beneficiaries enrolled in a PDP chose one with some gap coverage. Among beneficiaries in MA-PD plans, enrollment in plans offering gap coverage was 33% (up from 27% in 2006).

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