Health Insurance

Health Insurance
Health insurance protects against financial difficulties should a sickness or injury inflict you or a family member. This section gives you general information about individual or family health insurance coverage's.

Individual/Family Coverage
Health insurance policies come in various forms. Two of the most common policies are major medical and short term (interim) major medical. These policies cover basically everything from doctor visits, prescriptions to hospitalizations and surgeries.

Major Medical Policies
These policies are offered by many insurance companies with various options and exclusions. The typical policy covers you for doctor visits, (well or sick), prescriptions (RX card), urgent care facilities, x-ray, imaging, surgeries and hospitalizations (inpatient and outpatient).

There are three basic types of major medical policies. They range from basic indemnity (go anywhere) plans; Preferred Provider Organization (PPO “network”) plans to Health Maintenance Organizations (HMO “must” stay in network) plans. They all protect you financially but how you are covered and what choices you have can vary greatly.

Indemnity Major Medical
This type of major medical policy allows you to go anywhere you choose for services. You choose your doctor, facilities and hospitals regardless of any network. When you need services, you pay out of pocket for all services up to your deductible and then the co-insurance applies. Once you have met the maximum co-insurance limits, the policy pays 100% for the balance of the year to the lifetime maximum benefit.

Given the ability to choose your providers for care, the insurance companies limit the amounts they will pay for particular services. This is what the insurance companies call “usual, customary and reasonable” (UCR). This means that they will only pay up to the “average” fees charged in the geographical area for any particular service. Thus you should be a careful shopper for services.

Preferred Providers Organizations (PPO’s)
PPO policies offer you the ability to choose providers, facilities and hospitals but give you incentives to choose within a “PPO” network of providers. The policy gives you more coverage when you choose providers within their designated networks. The PPO networks have arranged for significant (40% - 60%) discounts for all services.

PPO policies will have co-pays for doctor visits, prescriptions, urgent care and x-rays and sometimes lab work. For all other services, hospitalizations and surgeries, an annual deductible must be met first, and then co-insurance applies. Once the co-insurance maximum has been met then you are covered at 100% for the balance of the calendar year.

Health Maintenance Organizations (HMO’s)
HMO’s allow you to choose your primary care physician from their limited physician list. Your primary care physician will direct your care within the HMO system. You DO NOT have the ability to go outside their system.

HMO’s are attractive due to their limited out of pocket expenses to you for services. Typically you only have co-pays for doctor visits, prescriptions, urgent care, emergency room visits, x-rays, labs, imaging and hospitalizations. There is no co-insurance. HMO’s also cover maternity.

Medicare Supplement Insurance
A Medicare Supplement policy is a health insurance policy sold by private insurance companies to fill the "gaps" in Medicare Plan coverage. These policies must cover certain expenses, such as the daily coinsurance amount for hospitalization.

There are 10 standardized plans called "A" through "J". Each plan A through J has a different set of standardized benefits. Plan A offers the least amount of benefits and Plan J offers the most benefits. Some policies may offer additional benefits, such as coverage for preventive medical care, prescription drugs, or at-home recovery. Plan F is the most popular plan.

When you buy a Medicare Supplement policy, you pay a premium to the insurance company. As long as you pay your premium, a policy bought after 1990 is automatically renewed each year. This means that your coverage continues year after year as long as you pay your premium. You must still pay your monthly Medicare Part B premium.

The best time to buy a Medicare Supplement policy is during your Medicare open enrollment period. Open enrollment lasts for 6 months. It starts on the first day of the month in which you are both:

1. Age 65 or older, and
2. Enrolled in Medicare Part B.

During this period, an insurance company cannot deny you insurance coverage, place conditions on a policy (like making you wait for coverage to start), or change the price of a policy because of past or present health problems.