Is it Time for a Health Insurance Check-up?
With the end of the calendar year approaching, this is the time for many people to take a look at their health insurance coverage and determine if any changes or updates are in order. Health insurance plans provide what’s known as an “open enrollment” period, during which time people can change plans. For many people who have employer-based coverage, Medicare or Health Insurance Marketplace coverage, this period occurs toward the end of the calendar year. However, some employer-based plans will offer an open enrollment period during another part of the year, so be sure to check with your human resources office to find out when your open enrollment period takes place.
Why Have Health Insurance?
No one ever wants or plans for a tornado to hit their home, but we have a homeowner’s insurance policy so that we can repair or rebuild, if needed. We need health insurance for the same reason: because we never know when we will need it. People don’t plan on a gallbladder removal, open heart surgery or cancer treatment – but at some point in our lives, we may have to confront a significant medical event. And when that day comes, we don’t want it to bankrupt us – that’s why it’s important to have health insurance.
Just as with homeowners or auto insurance, the premise behind health insurance is one of “spreading risk.” By having many customers, insurance companies collect premiums from a broad base and then use a portion of those funds to pay policyholders’ claims. For many people, those claims aren’t any more expensive than a routine check-up or physical once a year. However, other medical needs are much more expensive, such as delivering a baby, treatment for cancer or various types of surgery. Commonly-used diagnosis and screening tools, such as an MRI or a CT scan, can also be costly.
“Not all health insurance plans are created equal,” says Dr. Yevgeniy Ostrinsky, a gastroenterologist. “Understanding the various pros and cons of different types of health plans is important to ensuring you and your family have the right coverage to get the health care you need.”
The ABCs of Health Insurance
The world of health insurance seems to have its own language. Here’s a look at some of the common health insurance terms and acronyms every consumer should familiarize themselves with:
- HMO: Health Maintenance Organization. HMOs are insurance plans in which enrollees can only see providers who are part of the HMO’s network. A visit to an out-of-network provider will not be covered, except in cases of medical emergency or if the insurer has agreed in advance that it is a medical necessity.
- PPO: Preferred Provider Organization. This type of health insurance plan allows enrollees to see out-of-network providers, though usually at a greater out-of-pocket cost. There are also fewer restrictions on seeing specialists without a referral from a primary care provider.
- EPO: Exclusive Provider Network. This plan has some characteristics of both HMOs and PPOs. As with an HMO, there is generally no coverage for out-of-network providers. But like PPOs, EPOs do not require you to first get a referral from a primary care doctor before seeing a specialist.
- In-network: Insurance plans have a group of health care providers they refer to as a “network.” These are providers, such as physicians, hospitals and labs, with which the insurer has a contract that stipulates what the provider will be paid by the insurance company. The bottom line for the patient is that it’s cheaper to see a doctor or go to a hospital that is in-network. Sometimes, however, it is not always practical.
- Out-of-network: This refers to providers who are not in your insurer’s plan. You may pay more to see providers who are out-of-network. Some patients will choose to see a provider out-of-network if they believe that’s the best health care available for their situation. In other instances, such as a medical emergency, it may not be practical to get to an in-network provider in a timely manner.
- Premium: This is the amount you pay each month to maintain your health insurance coverage.
- Deductible: This is the sum you pay out-of-pocket before your insurance company begins to pay your claims. It is generally a fixed dollar amount each year.
- Co-pay/co-insurance: This is the amount you pay at each visit to a health care provider. This is a fixed dollar amount, or in some cases, a percentage of the total bill. There are co-pays for visiting a doctor, a specialist, getting an x-ray, having lab work done, filling a prescription, getting hearing aids, using an ambulance and going to an urgent care clinic or emergency room.
- PCP: This is the abbreviation for primary care provider, often a doctor of family medicine, internal medicine or obstetrician/gynecologist. PCP is an important term for insurance purposes; your insurance company will want to make sure you have one and will sometimes require a referral from your PCP before you can see a specialist.
- EOB: This is the “explanation of benefits” your insurer will send you after you’ve used your health insurance. The EOB will explain what the total charges were, how much your insurance covered and what amount, if any, you may still owe to the provider. The EOB is not a bill.
- Prior Authorization: In some cases, you or your physician may need to obtain prior authorization for a medical procedure, screening or prescription drug. In these cases, the procedure or prescription in question may not automatically be covered and your provider (or you) has to explain to the insurance company why it is medically necessary and why it should be covered.
- Preventative Services: This is a category of health care services that are available to consumers and do not require a co-pay or co-insurance; they are fully covered by the insurance plan. This includes services such as flu vaccines, some screening tests and wellness visits.
Where do you get health insurance?
People obtain health insurance in a variety of ways:
- Your employer: This is the traditional way most non-seniors in America have health insurance. You select a plan offered by your employer and you pay a premium that is deducted from your paycheck, before taxes. Generally, the employer pays a share of the employee’s coverage and in some cases, a share of the employee’s family members’ coverage.
- The Health Insurance Marketplace: The Marketplace was established by the Affordable Care Act and is an option for American citizens under 65 to purchase health insurance. People generally use this option if coverage is not available through their employer. Some plans have low premiums and high deductibles, which could make sense for younger, healthy people who don’t have a lot of medical needs. Other plans are more expensive but cover more, which make sense the older you get. Some enrollees may qualify for a federal income tax credit when they enroll, depending on income. Open enrollment in the Marketplace runs from November 1 to December 15, 2018. Visit healthcare.gov for more information.
- Association Health Plans: AHPs may be an option for small businesses to band together and offer coverage to their employees as an employer group or business association. They are generally formed when businesses in a like industry or geographical area work together to offer coverage. The U.S. Department of Labor issued new guidelines in 2018 intended to expand the availability of AHPs.
- Medicare: This is the federal health insurance program for American citizens age 65 and older. People who are approaching the age of 65 should visit gov for enrollment information. Some people are automatically enrolled at age 65, while others need to enroll themselves. There are three main components of Medicare:
- Medicare Part A is known as hospital insurance, covering hospital stays and some long-term care needs.
- Medicare Part B is medical insurance, covering physician visits and medical screenings and labs.
- Medicare Part D is a prescription drug insurance program.
Some people choose to delay enrollment in Medicare Parts B and D if they have health insurance through an employer that they prefer to keep while they are still working. However, a late enrollment penalty may apply.
- Medicare Advantage: These are private plans that some seniors choose to purchase to supplement the coverage provided by Medicare. Medicare Advantage plans are offered by private companies but must be approved by Medicare. Those with a Medicare Advantage plan still have Medicare coverage, but they receive their benefits through the plan directly, not traditional Medicare.
The purpose of Medicare Advantage plans is to provide additional coverage beyond that provided by traditional Medicare. These added benefits may include dental, hearing and vision coverage. Out-of-pocket expenses vary between Medicare Advantage plans, as do the provider networks they offer. For these reasons, it is important to compare Medicare Advantage plans just as you would employer-based plans, taking into account a variety of factors.
Important Note: For Medicare Part D and Medicare Advantage, you can make changes to your plans and switch plans during an open enrollment period that runs from October 15 – December 7, 2018. You can also disenroll from a Medicare Advantage plan between January 1 – February 14, 2019.
- Veterans Administration: Veterans of the United States Armed Forces may be eligible for varying degrees of health benefits through the VA, depending on a variety of factors, including length of time served, discharge circumstances, income and service-connected disability. For more information, visit gov.
- Tricare: Tricare is health insurance for active-duty military personnel, as well as some military retirees. For more information, visit mil.
- Medicaid and CHIP: Medicaid and the Children’s Health Insurance Program (CHIP) primarily serve lower-income families. In Texas, Medicaid eligibility is usually limited to children and women who are pregnant. CHIP is available for some families who earn too much to qualify for Medicaid. Visit healthcare.gov or the Texas Health & Human Services Commission.
Selecting a Plan
If you have employer-based health insurance or will be shopping for insurance in the Health Insurance Marketplace, you will likely have a few options to choose from. You may have a choice between an HMO, a PPO or an EPO. Carefully evaluate the differences between these options. An HMO may be less expensive but may also provide fewer benefits or not allow you as many provider options. On the other hand, if you are relatively young and healthy, a less-expensive plan may be right for you. Similarly, on the Health Insurance Marketplace, you will find a variety of plans at varying costs. These plans are named after metals – bronze, silver, gold and platinum. You’ll pay the least for bronze and also get the fewest benefits; at the other end of the scale, platinum is the most expensive but provides the most comprehensive overall coverage.
When comparing costs on any plan, be sure to consider three separate cost factors:
- Premium: the amount you pay each month to maintain coverage.
- Co-pay/co-insurance: the amount you will pay each time you visit a provider or get a prescription filled.
- Deductible: the amount you must pay out-of-pocket each year before your health plan begins to cover the cost of medical services.
You may find an inexpensive plan but later discover you have to meet a high deductible before you benefit from any coverage from the plan. You may also find that your co-pay for each visit, procedure or prescription is higher than you expected. For some people, these low premium/high-deductible plans work just fine; just make sure you have all the facts before making a decision.
An additional tool some employers offer for people who opt to enroll in a high-deductible plan is a health savings account (HSA). This is essentially a medical savings account that people can contribute pre-tax income to and then spend later to cover deductibles and other out-of-pocket costs.
Understanding an insurer’s network is critical to making a decision about a health insurance plan. No matter what type of plan you select, you will pay higher out-of-pocket costs to see a provider who is not in your plan’s network. Whenever possible, you want to stay within your network to keep costs down and you certainly want to ensure that your primary care provider and any specialists you see are in your plan’s network. Privia Medical Group North Texas providers are in-network for most major insurance plans in North Texas.
All insurance plans, including HMOs, PPOs and EPOs, are required to maintain adequate networks for their customers. Network adequacy in Texas is regulated by the Texas Department of Insurance (TDI).
There are several requirements that insurers must meet, according to TDI:
- “These plans must provide a network with enough qualified doctors and hospitals to make sure that covered services are reasonably available and that you have choice, access, and quality care.
- General doctor and hospital care must be available within 30 miles (within 60 miles in rural areas for PPOs and EPOs).
- Network specialty doctors and hospitals must be available within 75 miles.
- Emergency hospital care (including general, specialty, and psychiatric hospitals) must be available 24 hours a day, seven days a week.
- Nonemergency urgent care must be available within 24 hours for medical and behavioral health conditions.”
If you believe your insurance provider is not meeting these or other requirements, you can file a complaint with TDI. (Note: TDI regulates the private health insurance market in Texas and does not have jurisdiction over Medicare, VA, Tricare or most aspects of the Health Insurance Marketplace).
At the Doctor’s Office
When you make an appointment to see a doctor, you will give the office staff your insurance card and they will verify your coverage is active. You may also have filled out an information sheet before your visit. The doctor’s office will collect any co-pay you owe for the visit. After your visit, the physician’s office will bill your health insurance provider directly. You will later receive the EOB from your insurer, explaining what they covered for the visit. If there is an amount that you still owe the provider, you will receive a bill directly from the provider later.
“Health insurance can be extremely confusing, even for those of us who deal with it every day,” says Dr. Larry Tatum, CEO of Privia Medical Group North Texas. “Our providers have experienced administrative staff who work hard to facilitate insurance benefits on behalf of our patients. To better serve our patients, we have in-network agreements with most of the major health plans in North Texas. That’s a big advantage for both our patients and our physician members.”