According to the U.S. Census Bureau, in 2007, about 75% of Americans were covered under some sort private health insurance. Nearly 60% of Americans receive their insurance through their employer who contracts with a private insurance company. There are many options when choosing health insurance as well as different levels of coverage. Health insurance companies are large corporations that may seem overwhelming and in a position to dictate terms, payment, and coverage. It is important to remember that you are paying for a service and you should be treated fairly and get what you paid for. The following sections attempt to instruct and direct a plan of action for controlling the coverage you receive from your health insurance provider.
What Will Be Covered
Alphabet Soup: What are MCO’s, HMO’s, PPO?
Where Does My Employer Fit in?
Where’s My Money?: Common Questions Answered about Obtaining Coverage and Paying their Provider
Know Your Rights!
Alphabet Soup: What are MCO’s, HMO’s, PPO’s?
Managed Care Organizations (MCO)
Managed Care Organizations are a group of physicians, hospitals, and other providers that group together under agreed guidelines on how to provide medical care. A Monthly fee is paid to the network for a variety of general a specialty health needs and procedures. HMO’s and PPO’s are types of MCO’s.
Health Maintenance Organizations (HMO)
HMO’s were given federal money after Congress passed the Health Maintenance Act of 1973 in an effort to reduce rising health care costs. In addition, the Act required businesses who employ 25 or more to provide federally qualified HMO health insurance options if they also allowed for traditional forms of health insurance. As of 1995, there does not need to be a dual option of traditional or HMO, but HMO’s have become the most common way for people to access private health services.
HMOs are licensed at the state level, under a license that is known as a certificate of authority (COA) rather than under an insurance license. A HMO is a coordinated delivery system that combines both the financing and delivery of health care for enrollees. In the design of the plan, each member is assigned a primary care physician (PCP) who is responsible for the overall care of assigned members. Specialty services require a specific referral from the PCP to the specialist. Non-emergency hospital admissions also required specific pre-authorization by the PCP. Typically, services are not covered if performed by a provider other than a employee of or specifically approved by the HMO, unless it is an emergency situation as defined by the HMO.
Preferred Provider Organizations (PPO)
Rather than contract with the various insurers and third party administrators, providers may contract with preferred provider organizations. A membership allows a substantial discount below their regularly-charged rates from the designated professionals partnered with the organization. PPO’s themselves earn money by charging an access fee to the insurance company for the use of their network.
In terms of using such a plan, unlike an HMO plan, which has a copayment cost share feature (a nominal payment generally paid at the time of service), a PPO generally does not have a copayment and instead offers a deductible and a co-insurance feature. The deductible must be paid in full before any benefits are provided. After the deductible is met, the co-insurance benefits apply. If the PPO plan is an 80% co-insurance plan with a $1,000 deductible, then the patient will pay 100% of the allowed provider fee up to $1,000. After this amount has been paid by the patient, the insurer will pay 80% of subsequent fees and the patient will pay the remaining 20%.
For Example, If the medical Bill was $1,200 then the cost to you would be $1,040; or if the Bill was $2,000 then the charge would be $1,2oo. The deductible is usually yearly so each year after paying the $1,000 then you would only pay 20% of all medical costs covered in that year. Because the patient is picking up a substantial portion of the “first dollars” of coverage, PPO are the least expensive types of coverage
California Office of the Patient Advocate 2010 Report Card for HMO’s and PPO’s
Where Does My Employer Fit In?
Employer-sponsored
Employer-sponsored health insurance is paid for by businesses on behalf of their employees as part of an employee benefit package. Typically, employers pay about 85% of the insurance premium for their employees, and about 75% of the premium for their employees’ dependents. The employee pays the remaining part of the premium, usually with pre-tax/tax-exempt earnings.
Small employer group coverage
According to a 2007 study, about 59% of employers at small firms (3-199 workers) in the US provide employee health insurance. When small group plans are medically underwritten, employees are asked to provide health information about themselves and their covered family members when they apply for coverage. When determining rates, insurance companies use the medical information on these applications. Sometimes they will request additional information from an applicant’s physician or ask the applicants for clarification. States regulate small group premium rates, typically by placing limits on the premium variation allowable between groups (rate bands). Insurers price to recover their costs over their entire book of small group business while abiding by state rating rules.
College-sponsored health insurance for students
Many colleges, universities, graduate schools, professional schools and trade schools offer a school-sponsored health insurance plan. Many schools require that you enroll in the school-sponsored plan unless you are able to show that you have comparable coverage from another source.
Effective group health plan years beginning after September 23, 2010, if an employer-sponsored health plan allows employees’ children to enroll in coverage, then the health plan must allow employees’ adult children to enroll as well as long as the adult child is not yet age 26. Some group health insurance plans may also require that the adult child not be eligible for other group health insurance coverage, but only before 2014.[48]
This extension of coverage will help cover one in three young adults, according to White House documents.
Federal employees health benefit plan (FEHBP)
The federal government also sponsors a health benefit plan for federal employees—the Federal Employees Health Benefits Program (FEHBP). FEHBP provides health benefits to full-time civilian employees. Active-duty service members, retired service members and their dependents are covered through the Department of Defense Military Health System (MHS). FEHBP is managed by the federal Office of Personnel Management.
“Portability” of group coverage (COBRA and HIPAA)
Two federal laws address the ability of individuals with employment-based health insurance coverage to maintain coverage.
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) enables certain individuals with employer-sponsored coverage to extend their coverage if certain “qualifying events” would otherwise cause them to lose it. Employers may require COBRA-qualified individuals to pay the full cost of coverage, and coverage cannot be extended indefinitely. COBRA only applies to firms with 20 or more employees, although some states also have “mini-COBRA” laws that apply to small employers.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides for forms of both “group-to-group” and “group-to-individual” portability. When an individual moves from one employer’s benefit plan to another’s, the new plan must count coverage under the old plan against any waiting period for pre-existing conditions, as long as there is not a break in coverage of more than 63 days between the two plans. When certain qualified individuals lose group coverage altogether, they must be guaranteed access to some form of individual coverage. To qualify, they must have at least 18 months of prior continuous coverage. The details of access and the price of coverage are determined on a state-by-state basis.
Where’s My Money?: Common Questions Answered about Obtaining Coverage and Paying their Provider
Coverage and benefit disputes in health-care insurance and health-care plans that frequently arise include the following: Refer to the Next Section “Know Your Rights” for solutions to disputes. For more in depth information click this link www.ahrq.gov common questions
Q: Why was the visit to the doctor not covered by my insurance?
A: The insurer or plan contends that care was not medically necessary, which is often defined as care that is reasonably required according to accepted norms within the medical community.
OR
A: The insurer or plan contends that the charges were not “usual, customary and reasonable” for the services rendered.
OR
A: The insurer or plan contends that the treatment was “experimental” or “investigational,” which generally means that the care has not been accepted in the medical community as normal treatment or has not been proven to be effective medically.
Q: What is a deductible?
A: It is a specific dollar amount that an individual must pay (or “satisfy”) before reimbursement for expenses begins. The higher the deductible, the lower the cost of the health insurance plan.
Q: For insured employees with dependent coverage, does the deductible for each person have to be satisfied before reimbursement begins?
A: 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.
Q: What is coinsurance?
A: Coinsurance is a feature found in most group health insurance plans. It sets forth the percentage of covered expenses that the employees and the health insurance plan will pay. The most common coinsurance level is one in which the employee pays 20 percent of the expenses and the insurer pays 80 percent. This is called 80 percent coinsurance.
Q: What is a covered expense and are there limits?
A: covered expense is an eligible expense under a group health insurance plan. A covered expense is an expense incurred by a covered individual that will be reimbursed in whole or in part under the group health insurance plan. For example, under most health insurance plans, doctors’ visits are a covered expense. That is, a doctor’s fee up to the amount provided by the plan will be reimbursed by the insurer Just because an expense is covered does not mean that the coverage is unlimited. Both base plus and comprehensive plans have limits on the expenses for which they will reimburse. In addition, some form of deductible and coinsurance is often applicable. Insurers limit covered expenses in a variety of ways. One way is to cap allowable payments for a certain procedure or service. A common example of this type of limit would be a surgical schedule. Insurers also restrict covered expenses by limiting the number of visits or days for home health care or skilled nursing care, or by establishing a reasonable and customary charge.
See http://www.healthinsurance.org/resources/faqs.lasso for more information
Know Your Rights!
What can I do if I have a dispute of this kind with my health insurance company or plan?
If a health insurance company or plan denies your claim or refuses to provide a benefit or service, you have several options.
Utilize the Insurance Company’s established rules and procedures for handling complaints and grievances internally. Utilizing these procedures is an important first step and you can start by making a phone call to a complaints hot line. You may need to follow it up with a complaint form or a written complaint. The dispute should de addressed within 30 days.
Have a Third Party Review the Claim. Most states have external review procedures, which can be pursued once internal review has been exhausted. Your health-care plan or insurance company may automatically refer your dispute to external review if your internal review is unsuccessful; or you may need to request external review in writing within a certain time period after internal review.
Most states will not review all disputes, only those involving medical necessity. That means that there must be a dispute between you and your health plan over whether a particular procedure, treatment, or pharmaceutical is essential for your health and recovery
Most HMOs are accredited with nongovernmental groups such as the National Committee for Quality Assurance (www.ncqa.org), the American Accreditation HealthCare Commission/URAC (www.urac.org), and the Joint Commission on Accreditation of Health Care Organizations (www.jointcommission.org). HMOs rely on their accreditation by these organizations in their marketing to employers and unions.
Seek a Second Opinion If you think your doctor is withholding treatment. You might want to seek a second opinion about whether treatment is necessary. And if you believe your doctor is withholding treatment for his or her own pecuniary gain, you can file a complaint with your state’s medical board.
Appeal to the State Insurance Department if you are covered by an HMO. All plans have to be certified by the state which gives the state quite a bit of power. They are especially useful if you feel there has been discrimination, unfair denial, or a vagary of the rules, disclosures, or booklets. HMOs are likely to respond out of concern that their license might be revoked or suspended.
COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
Who Qualifies for this Tool
Who Qualifies: A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee’s spouse, or an employee’s dependent child. In certain cases, a retired employee, the retired employee’s spouse, and the retired employee’s dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage is considered a qualified beneficiary. Agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries.
Qualifying Events: Qualifying events are certain events that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of continuation coverage.
Qualifying Events for Employees:
Voluntary or involuntary termination of employment for reasons other than gross misconduct or Reduction in the number of hours of employment.
Qualifying Events for Spouses:
- Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct
- Reduction in the hours worked by the covered employee
- Covered employee’s becoming entitled to Medicare
- Divorce or legal separation of the covered employee
- Death of the covered employee
Qualifying Events for Dependent Children:
- Loss of dependent child status under the plan rules
- Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct
- Reduction in the hours worked by the covered employee
- Covered employee’s becoming entitled to Medicare
- Divorce or legal separation of the covered employee
- Death of the covered employee
Department of Labor FAQs on COBRA
What process must individuals follow to elect COBRA continuation coverage: Employers must notify plan administrators of a qualifying event within 30 days after an employee’s death, termination, reduced hours of employment or entitlement to Medicare.
A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation or a child’s ceasing to be covered as a dependent under plan rules.
Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.
Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through February 16, 2009, you may be eligible for an additional election opportunity under the American Recovery and Reinvestment Act of 2009 (ARRA). For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor.
How long after a qualifying event do I have to elect COBRA coverage?
Qualified beneficiaries must be given an election period during which each qualified beneficiary may choose whether to elect COBRA coverage. Each qualified beneficiary may independently elect COBRA coverage. A covered employee or the covered employee’s spouse may elect COBRA coverage on behalf of all other qualified beneficiaries.
A parent or legal guardian may elect on behalf of a minor child. Qualified beneficiaries must be given at least 60 days for the election. This period is measured from the later of the coverage loss date or the date the COBRA election notice is provided by the employer or plan administrator. The election notice must be provided in person or by first class mail within 14 days after the plan administrator receives notice that a qualifying event has occurred.
Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through February 16, 2009, you may be eligible for an additional election opportunity under ARRA. For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor.
How do I file a COBRA claim for benefits?
Health plan rules must explain how to obtain benefits and must include written procedures for processing claims. Claims procedures must be described in the Summary Plan Description.
You should submit a claim for benefits in accordance with the plan’s rules for filing claims. If the claim is denied, you must be given notice of the denial in writing generally within 90 days after the claim is filed. The notice should state the reasons for the denial, any additional information needed to support the claim, and procedures for appealing the denial.
You will have at least 60 days to appeal a denial and you must receive a decision on the appeal generally within 60 days after that. Contact the plan administrator for more information on filing a claim for benefits. Complete plan rules are available from employers or benefits offices. You may need to contact an attorney to prepare and file the paperwork.
Healthy Rights 