“It takes work, but everyone needs to invest the time to understand the coverage and vocabulary of their health insurance.  If you don’t, you put yourself at the mercy of your insurance company, and insurers realize that.” Elisabeth Russell, President, Patient Navigator

Health insurance is complicated.   You must understand the details of your own health insurance coverage if you hope to maximize your benefits and minimize your out-of-pocket costs.  You must learn the language of health insurance.

Health insurance coverage comes in a variety of different packages. You can buy group insurance or individual insurance but the basics are usually the same.  Some insurance requires that you go to specific doctors and health care professionals within their approved provider network.  Others cover only specific illnesses.

As a result of the Health Care reform law enacted in 2009, there will be many changes to this topic in the months and years ahead.  We will continue to update and add to our Roadmaps of insurance topics.

1.  Become familiar with the general terminology of health insurance.

You should understand the differences between co-pays, deductibles and co-insurance, for example.   For a vocabulary guide,  see our “Glossary of Common Insurance Terms” roadmap.

 

2.  Determine what type of health insurance you have.

Many people are covered under group policies provided through their employer, or their spouse’s employer.  Others purchase private insurance directly from an agent or high-risk pool.  Still others have government-provided coverage, with Medicare or Medicaid.  Some people have a combination of several different types of coverage, including Medicare supplemental policies (Medigap) which is sold through private companies under federal guidelines.

 

The most common types of private or group insurance are listed below:

 

Indemnity Plans

 

Basic or Major Medical – this is the traditional, “old-style” insurance under which the insurance company would usually pay 80%, while you would pay 20% of the normal charges for an appointment or procedure.  There is often a deductible amount that you must pay before insurance kicks in.  You are usually free to select your own doctors without restriction, and do not normally need referrals.  There may be annual or lifetime benefit caps.

Managed Care Plans

 

PPO – A Preferred Provider Organization – a plan under which you receive discounted rates if you use doctors from a contracted group.  If you choose to go out-of-network for care, you would pay a higher amount.

 

HMO – Health Maintenance Organization – a plan under which the insured pays a fixed monthly premium, regardless of the types or levels of care provided.  Services are provided by doctors that are employed by or under contract to the HMO.  There is rarely any coverage provided if you choose to see a doctor outside of the employed or contracted group.

 

POS – Point of Service Plan – Sometimes called an “open-ended HMO.”  POS plans combine the features of an HMO with an indemnity insurance option.  If the patient sees a physician who participates in the HMO, the patient receives HMO coverage.  But if patients exercise “freedom of choice” and seek care outside the HMO system, they must pay additional charges (higher co-payments and deductibles) and submit their own forms.

 

Consumer Directed Plans

 

CDHP – Consumer-Directed Health Plan – CDHPs constitute a small but growing share of the private health insurance market.  They combine a high-deductible health plan (HDHP) with a tax-advantaged health reimbursement arrangement (HRA) or health savings account (HSA) that enrollees can use to pay for a portion of their health expenses.   HRA accounts are owned by the employer, and only the employer may contribute to them. HSAs are owned by the enrollee. may be contributed to by both employer and enrollee. and unlike HRAs, may be taken by the enrollee to a new employer.

Government Funded Plans

Medicare – A government-sponsored traditional indemnity plan of medical and hospitalization insurance for people aged sixty-five and older and in some cases those who are disabled.

  • Medicare Part A covers hospital, limited skilled nursing and rehabilitation, home health and hospice insurance.
  • Medicare Part B is medical insurance for outpatient and physician services.  There are monthly premiums, limitations and co-pays (co-pays can be covered if one purchases an optional Medigap supplement).  Medicare does not cover routine physical examinations, eyeglasses, hearing aids, and other common senior needs.
  • Medicare Part C is an HMO, managed-care version of traditional Medicare.
  • Medicare Part D is the prescription drug benefit managed by competing private insurers.  (Check the Medicare site for more information).

Medicaid - A government subsidized, means-tested medical program intended to provide coverage for very low income individuals and families.  Medicaid is a jointly funded cooperative program between the federal state governments.  Medicaid programs vary greatly from state to state and are quite complex.   Options are limited regarding providers and procedures covered although the Federal government requires coverage of a minimum set of services, including hospital, physician and nursing home services.

TRICARE – Military retirees, their family members and survivors, and some former spouses are eligible for medical coverage through TRICARE for Life and TRICARE Senior Pharmacy Program, and burial benefits.  (See the Department of Veterans Affairs for more information.)

3.  Become an Expert on Your Policy

Once you understand what type of insurance you have, become an expert on the details of your specific policy.  You should have a booklet or website link that was provided to you when you contracted for the insurance that explains the details of co-pays, deductibles, covered services and provider networks.

If you cannot locate this essential document, contact your Human Resources representative (if you have coverage provided by your employer), or the agent who sold you a private policy to request the information.  You can also call the Member Services telephone number on the back of your insurance card to speak to an insurance company representative directly, and request this information.

Navigator Tip:

If you want documentation beyond the Benefits Summary you were given, ask for the Evidence of Coverage (EOC) document.  Be aware that the EOC is not routinely made available to or read by consumers and is often indecipherable.  But if you are in a dispute with your insurer, the EOC may be helpful.

 

 

Make Sure You Can Answer These Questions About Your Policy:

Premium – How much do you pay monthly for insurance coverage?  How much does your employer pay?

Co-Pay – How much do you need to pay out-of-pocket to the doctor or facility for each visit?  Is this amount different for a general practitioner and a specialist?

Deductible – How much in annual health expenses do you need to pay out-of-pocket before any insurance coverage begins?

 

Network – Are you restricted to a certain network or doctors, or can you choose your own freely?  Are out-of-network providers covered at all?

Referral – Do you need to obtain a referral from your primary care physician in order to see a specialist?  To have a particular test?

Pre-Authorization – What procedures require pre-authorization from the insurance company before you have them done?  What about hospitalization, planned or emergency?

Limits – Does your plan have any limits on the amount that you would spend annually or over your lifetime?

 

4.  Proceed with Confidence

Once you understand the details of your health insurance and your responsibilities within it, you can plan your doctor’s appointments, tests and procedures confidently.

You will have to manage the paperwork that results to ensure that your coverage is applied correctly and to check for errors.  Please see the My Patient Navigator ” Filing an Insurance Claim Step by Step” roadmap for further guidance on this topic as well as the “Organize Your Medical Financial Records” roadmap.

My Patient Navigator™  members may also use the Insurance Tracker tool for a web-based application that will help you follow the trail of your insurance claims and benefits.  Contact your navigator for further information.  If you wish, our navigators also offer insurance reconciliation services.

Check the Healthcare Blue Book if you are comparing prices in your area for procedures and services.

Other Links:

Benefits Checkup – www.benefitscheckup.org – This site identifies federal and state benefits available to seniors who provide a small amount of demographic information.