5/12/2014 4:00 PM ET|
5 essential facts about health care
Insurance rules, regulations and guidelines can be confusing and intimidating. Here are the basics.
Could you explain what a health insurance premium is? What about coinsurance?
Just under half of Americans with health insurance feel confident that they understand such basic insurance terms, according to a recent study in the journal Health Affairs. Among uninsured Americans, fewer than a quarter have that confidence.
As the Affordable Care Act creates millions of new health insurance customers and provides new options for the already-insured, confusion about basic insurance concepts could make it difficult for people to make the right choices.
"The vast majority of consumers do not know the ins and outs of health insurance because they never have needed to," says Eric Stauffer, a former insurance agent who now rates and reviews insurance companies online.
"For years, most people have received health insurance through their employers. They get a card in the mail, and that is their ticket to health insurance," he says. "Consumers rarely saw much more than a bill for a few hundred dollars here and there."
But it's no longer so simple. "Years of being naive about the entire industry are starting to catch up with people now," Stauffer says.
Here are five things a wise health insurance consumer needs to know.
The premium isn't everything
Every health insurance plan includes a number of variables, so just looking at the monthly payment, or premium, doesn't tell the whole story.
To determine whether a plan fits your situation, you must understand the big picture. That includes the annual deductible, which is the amount a consumer must pay out of pocket before the insurance company will pay any expenses.
"If you are a healthy person, there is no reason to have a deductible lower than $5,000," says Ashley Hunter, president of HM Risk Group, a niche insurance brokerage serving the U.S. and the Middle East.
"Purchase a policy with a higher deductible and an option that allows you to have at least two doctor visits with a copayment for emergencies," she says, adding that you might then invest your premium savings.
People who seek health care regularly should look for a low copayment, which is a fixed out-of-pocket charge for medical services.
"We find that if you tend to use your health insurance, it is almost always cheaper to take a higher-cost plan with the lowest out-of-pocket expenses," says John Seltzer, founder and CEO of J. Seltzer Associates, a Pittsburgh-based insurance brokerage specializing in employee benefits.
Copayment and coinsurance are not the same
While copayments and coinsurance are both types of cost-sharing between the consumer and the insurance company, they are two distinct types of payments, notes Michelle Katz, a nurse and the author of "Healthcare for Less" and "101 Health Insurance Tips."
In a copayment, also known as copay, the patient pays a specific flat dollar amount to the provider, usually for each service or treatment, such as $25 for a checkup.
Coinsurance, on the other hand, is a percentage of costs that a patient must pay after the deductible is met. "For example, you may have a deductible of $250 before insurance will cover 80 percent of charges, leaving you responsible for the other 20 percent -- known as coinsurance," Katz explains.
Compare health insurance costs to find the plan best for you.
Out-of-network benefits can be costly
The typical health insurance plan includes a network of doctors, health care facilities and other providers that either work for or contract with the insurance company and agree to provide services at a particular rate.
In most cases, insured consumers may still use out-of-network providers, but they need to understand that there's a difference between in-network and out-of-network benefits, says Keith Tobin, vice president of Medorizon, a medical billing company based in Romeoville, Ill.
When you go out-of-network, you could be stuck paying a higher coinsurance percentage. And often there are higher annual coinsurance and overall out-of-pocket limits when using out-of-network providers. Depending on your plan, you could even be billed for 100 percent of the costs when you seek out-of-network care.
But it may be necessary to use out-of-network providers if, for instance, a health care crisis occurs while traveling. In some cases, a provider may be in your network but the hospital where that provider works may be outside the network, presenting questions about whether the services provided there will be covered, Tobin says.
Patients must make sure charges are paid
For years, many consumers have "presented their health insurance cards as though they were credit cards, and never saw or cared about bills or the cost of the services they received," Seltzer says.
But consumers have always been ultimately responsible for their own health care costs.
After many employers began offering health insurance as a benefit following World War II, "employees became complacent, assuming that the health insurance would assume all risk and make all payments," Tobin says.
However, the contractual agreement is with the provider and patient, as it always has been, and insurance companies process the medical claims "as a courtesy for their customers," Tobin says. "Many customers don't realize that insurance doesn't cover everything past a copay."
If the insurance won't cover part of a bill and you don't pay it, it's your credit that takes the hit -- not the insurance company's.
Many of the insurance plans offered through the Affordable Care Act carry higher deductibles and coinsurance requirements than previous plans, Seltzer notes.
As a result, many individuals will be responsible for paying a more significant portion of their bills and consequently may "be looking to become better consumers of health care services," he says.
The ER should be avoided, if possible
Hospital emergency departments were designed to treat true emergencies, such as persistent chest pain and traumatic injuries. But overuse of the ER has driven up both prices and wait times.
"Many of the conditions for which patients often go to the ER, such as sprained ankles, colds and other conditions that are not life-threatening, are better handled at an urgent care facility or by their own physicians," says Marty Rosen, co-founder of Health Advocate, a health insurance assistance firm.
Avoiding the emergency room can save money and time.
"With most insurance plans, the copay cost is significantly higher at an ER than getting the same treatment at urgent care," Rosen says. "If you're on a high-deductible plan with a $3,000 deductible, you may pay that entire amount out of pocket for treating a sprained ankle at a trauma center ER. At an urgent care, you might spend a few hundred."
Patients at most urgent care clinics are treated within one hour, versus average wait times of up to six hours at ERs, Rosen adds.
To determine whether an ER visit is in order, consult your primary care provider or a nurse hotline if one is included in your insurance plan.
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I think I have a grasp on health care. December 2013, monthly healthcare cost $60-$100 depending on doctor visits, January 2014, healthcare cost $300 before setting foot in doctors office, add to that an additional $200-$300 in prescription cost, doctor office copays now $40 instead of $15, blood work and other test 50% of billed cost - my last echocardiogram and cardiologist visit cost me nearly $1000 - before the 'Affordable Care Act', this visit would have cost $25 which would have included the echocardiogram.
I don't know about you, but come November I will vote out of office the democrats in congress which forced this 'healthcare reform' and additional taxes to pay for the healthcare subsidies (money taken from those who pay taxes and given to those who do not - do you know if you sell your house you may have to pay an additional 3.8% tax to pay for obamacare). I never really understood the 'they need to pay their fair share' argument - if some people are paying federal income tax and some people are not paying federal income tax - how is that fair?
Health insurance does not equal health care.
Look no further than your auto & home insurance for examples of not getting back what you put into it.
Health care expenses are exorbitant and must be contained.
Expensive tests are fully covered by insurance but the treatment is not. Who among the newly covered can pay for the treatment after exhausting the deductible? I would say very few to none.
Pharmaceutical companies and hospitals receive enormous tax breaks. Why do they charge so much to patients?
The very same medications and surgical procedures are available in other countries for a fraction of the cost in the US. In some countries you can buy the exact same medication (Lilly, Pfizer, Merck) without a prescription for 10% of the cost paid by insurance companies.
The flu shot foisted on many is only 60% effective, by their own estimation, and is required by government mandate in schools. The pharmaceutical companies are in concert with this expensive debacle. And then they do not make the unprofitable pediatric cancer treatment drugs. This is shameful.
It is humiliating that retirees travel to Canada by the busload to get their medications.
I have not been to a doctor in over three years and yet my premium increases annually.
Again, costs must be contained.
1) Health care is a personal responsibility
2) Health care does not equal health insurance
3) Supply and demand sets price, openning up the health insurance marketplace across state lines increases supply.
4) Health care should only be between the patient and the health care provider
5) The federal government doesn't have a Constitutionally based role in health insurance
1. The welfare trash will eventually get the same 'level' of care as I do because the system will be so overwhelmed.
2. Illegals will force the healthcare system to pay for interpreters and make even higher costs for healthcare continue to skyrocket.
3. Prescriptions will be more difficult to acquire with generics due to cost increases; only those on subsidy plans will get first priority, since it is government controlled.
4. My out-of-pocket costs will exceed premiums always, since I am paying for welfare trash.
5. Obama and his fellow politicians will never have to go through items above like I will.
Here's more (formerly I was a biller and coder)
1). Most insurance companies play a game where they automatically deny most claims the first time they're billed, just because they can, even when they are payable by their own rules. They're hoping your doctor will get tired of billing them and bill you, and they're hoping you will get tired of fighting them and just pay it. If you point out they have no right to deny that claim because it was billed properly (they're happy to tell you your doctor screwed up the billing, but they lie), they will eventually admit they made "a mistake" and pay it. You will have to fight them to pay your claims more often than not. Get used to that idea.
2). Your doctor, if they bill your insurance company for you, does it as a courtesy. It's not "their job". Screaming at your doctor's staff because your claim didn't get paid will not cause it to magically get paid. Whether it gets paid or not is between YOU and YOUR insurance provider.
3). Yes, your insurance company will take your premiums with a smile. Yes, they will seek every loophole they can find to keep from giving a cent to your medical provider. Just because you paid a monthly premium does not mean they will treat you fair, play by their own rules, or even process your claims correctly without you fighting to make them do their job.
4). If you go to the "in-network" ER for a true emergency, your insurance company can refuse to pay for an "out-of-network" ER doctor who happened to be on shift that night. I've filed a grievance, but if my greedy insurance provider denies it (and why won't they - they've already denied the claim twice), I'll get screwed out of $700 for following THEIR rules!
Ancient Chinese secret, the public mandate in the ACA has always been supported by the Republican party, just like Medicare D, Republicans have always supported bills that channel dollars to corporations, especially those that donate to their campaigns.
The following are all on record supporting a public mandate for health coverage.
The Heritage Foundation
Jim Demint, just to name a few. Welcome to the Grand Illusion.
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