Most people get health insurance through a job-based health plan or they purchase it themselves from an insurance company. If you have to buy insurance on your own, different kinds of policies can offer very different kinds of benefits and can limit one’s access to some doctors, hospitals or other providers.
The kinds of benefits and which care providers your policy covers can make a big difference in costs and the quality of care one receives when they become ill. The most obvious feature of any policy is the premium which is the the amount you paid to an insurance company for a policy.
Equally as important as the premium cost is how much one must pay when receiving services under the following circumstances:
- How much must one pay before insurance coverage begins (the deductible)
- What one pays for services after the deductible is met
- How much one must pay if they actually get sick (out-of-pocket maximum)
Generally, there is a direct tradeoff between the cost of health insurance and the extent of covered benefits. As one weighs this tradeoff, it is important to recognize that a policy with the least expensive premium or with a high out-of-pocket maximum may not cover many services and treatments which would make one responsible for paying relatively high medical bills.
Private health insurance plans generally offer networks of hospitals, doctors, specialists, pharmacies, and other health care providers. These networks include health care providers who have a contract with the insurer to take care of its plan members. When deciding upon a plan, it is recommended that one review the list of designated providers under the policy, so if continuing with current doctors is important to your loved one, be sure to see that they are included. Depending on the type of policy one purchases, care may be covered only when received from a network provider. In addition, getting care from a specialist may also require a referral from one’s primary care doctor.
Types of plans and restrictions
Traditional HMOs (health maintenance organizations) and EPOs (exclusive provider organizations) may restrict coverage to providers outside their networks. If a doctor or facility isn’t in the network, one may be responsible for paying the full cost of the services provided. Other types of insurance plans offer the choice of getting care within or outside of the provider network, although the portion of health costs covered by insurance may be much lower for out-of-network care, meaning one will pay more to use out-of-network providers. Plans such as these are referred to as PPOs (preferred provider organizations) or POS (point-of-service plans). Fee-for-service plans usually don’t have networks.
Medicare is a national social insurance program, administered by the U.S. federal government since 1965, that guarantees access to health insurance for Americans ages 65 and older and younger people with disabilities as well as people with end stage renal disease. Medicare health plans include all Medicare Advantage Plans, Medicare Cost Plans, Demonstration/Pilot Programs, and Programs of All-inclusive Care for the Elderly (PACE). Medicare Advantage Plans are the most comprehensive because one is always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if one is in a Medicare Advantage Plan. The plan can choose not to cover the costs of services that aren’t medically necessary under Medicare. If you’re not sure whether a service is covered or not, it is advisable to check with your loved one’s provider before seeking that service or treament.
Medicare Advantage Plans may also offer extra coverage, including vision, hearing, dental and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D). In addition to Part B premiums, one must also usually pay a monthly premium for their Medicare Advantage Plan. If your loved one needs a service that the plan says isn’t medically necessary, they may be responsible for paying the entire cost of the service, but they have the right to appeal the decision. It may also be advisable to ask the plan adminstrator for a written advance coverage decision to make sure a service is medically necessary and will be covered. If the plan won’t pay for that service, your loved one may have to pay all of the costs if an advance coverage decision was not requested.
Seniors and the Affordable Care Act
The Affordable Care Act strengthens Medicare and helps seniors take charge of their health. The law provides important benefits such as free preventive services, free annual wellness visits, and a 50% discount on prescription drugs for Medicare recipients in the coverage gap known as the “donut hole.” You can also work with your doctor to create a personalized prevention plan.
Highlights for Seniors to Know
- Under the health care law, existing guaranteed Medicare-covered benefits won’t be reduced or taken away. Neither will the ability to choose your own doctor.
- Millions of people with Medicare received cost relief during the law’s first year. If an individual had Medicare prescription drug coverage and had to pay for their drugs in the coverage gap known as the “donut hole,” they received a one-time, tax free $250 rebate from Medicare to help pay for prescriptions.
- If your loved one has high prescription drug costs that put them in the donut hole, they now get a 50% discount on covered brand-name drugs while in the donut hole. Between now and 2020, your loved one will get continuous Medicare coverage for prescription drugs.
- Medicare covers certain preventive services without charging Part B coinsurance or deductible. Your loved one will also be offered a free annual wellness exam.
- The life of the Medicare Trust Fund will be extended as a result of reducing waste, fraud and abuse and slowing cost growth in Medicare, which will provide future cost savings on premiums and coinsurance.
For more information, visit: