Tips for understanding health insurance pitfalls and lingo.
Here are some tips for young people and beginners on how to pwn the health insurance industry… or at least come out alive. Please understand I’m not a doctor and am in no way an accredited expert in the medical field. It took me about 7 days of personal research and struggle (which you can read about here) to gather and clarify everything here, most of it sifting online at different company’s sites, but also speaking over the phone with the insurance company reps. I’m providing this information here because I hope I can save you that time and hassle.
I’ll assume you have already decided that it’ll be cheaper and safer for you in the long run to have health insurance rather than not have it. Even if you haven’t already decided that, all the sites and health insurance salesmen you’ll be encountering will sell it to you quite well, so I won’t need to get into that here for you. I will say that when you’ve hurt yourself or become ill, the last thing you want to be doing is weighing the cost vs. benefit of making yourself better. Save yourself a great amount of that worry and get the insurance.
Ideally, the best way to not get fucked over by health insurance is to get a kick ass job that gives you group health insurance coverage and rates. However, if that’s not available to you, then the following should prove useful for you:
1. Don’t dare let yourself go uninsured for 63 days or more. And if you have never had health insurance before, get it asap, don’t dare wait till you’re sick or catch up to the next age group. And please, keep your health insurance paperwork in a safe place. Waiting will not help you, and the insurance companies make damn sure of taking advantage of people who have never had insurance before, or they’ve let time go by and somehow been uninsured for more than 63 days. According to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), 63 days break without insurance is allowed to you until you get your next health insurance plan to maintain creditable coverage for yourself. What is creditable coverage? It’s proof to insurance companies that you don’t have some preexisting condition for which they can deny you future coverage for care.
Insurance companies want to be safe from all the horrible sickos from taking advantage of them, so they’ve implemented a system that denies people insurance/care/coverage if they may possibly have these high costing illnesses. And even if you may not know you have some illness, insurance companies aren’t going to take that chance, if they see that you may have any gaps in creditable coverage (63 days or more), they will find ways to prevent you from getting certain benefits on the health plans you may be paying full price for, or worse, they will find some way to deny you coverage in the first place.
The way to bypass this is to get insured by any health insurance company you can as soon as you can, while you’re young and healthy. Even if you don’t care about what coverage you’re getting, just get something with the cheapest monthly cost. This is the easiest way to get under the health insurances’ wing, and ensure that no one can deny you future coverage for some illness they may possibly find in you.
When I switched insurance plans from Kaiser to Blue Shield, Blue Shield decided they didn’t want to cover some simple blood tests my doctor did on me during a regular physical. Keep in mind that these were simple blood tests that ended up telling me I was as healthy as I could be. Blue Shield’s reason? They said the blood tests were related to benefits for medical conditions that are determined to be Pre-Existing Conditions, and that I had not yet reached my 6-month waiting period from my beginning enrollment date to get any coverage for the blood tests. How that’s so? I don’t know, but hours spent on calling in and asking a million questions didn’t provide any clearer answers or changes in their decision. They told me since I hadn’t waited 6 months, the only way I could get them to cover the blood test was to show them proof of my prior creditable coverage. Thank heavens I had been covered with Kaiser for years before, and that I had thought to get temporary health insurance whenever I didn’t have insurance from the big companies. I showed them the paperwork I had received from my prior health insurance companies, and then my blood tests were suddenly covered.
I’m a relatively healthy youngster, and if they’re going to give me problems with coverage, you know they’ll give anyone a hard time. Give them less ammo to hit you with, get some coverage now, and hold onto those important papers that health insurance companies send to you. I didn’t know what they were till I needed to show them to Blue Shield. Prepare yourself for the worse, it may just happen to you.
2. Get to know the lingo that health insurance companies use. Every company is going to use them slightly differently to hide what their plans really are, but essentially they mean something like this:
- PPO (Preferred Provider Organization): A type of health plan that allows you to choose any doctor you want. You’ll usually be deciding if you want PPO or HMO (defined below). An easy way to think about PPO is that the insurance company gives you a huge list of doctors you can see, and you can choose any of them without getting permission from the insurance company first. If you’re young and healthy, this won’t matter so much since you won’t need to see many specialist doctors. Usually PPO is the preferred plan for older, ailing individuals who want to see the best doctors for whatever ails them. This plan is usually more expensive than HMO’s since you are given more choice.
- HMO (Health Maintenance Organization): A type of health plan where you have to see a doctor which you previously chose with your health insurance company, or you see a doctor that the insurance company chooses for you. You’ll usually be deciding if you want HMO or PPO (defined above). A popular HMO plan is Kaiser Permanente. Although you can still choose any doctor you want within the Kaiser hospitals, you can only go to Kaiser for care, you can’t choose a specialist outside of the Kaiser network. For the young and healthy, HMO’s will probably be a better way to go since they are usually cheaper.
- In and Out of Network: Even if you decide to go with PPO, there is a network of doctors/hospitals/pharmacies/etc. that the insurance company will give to you in order to keep your copays/deductibles/bills cheaper. Basically, if you stay within the network whenever you see a doctor, your benefits will more likely apply to you. If you go outside the network, the benefits will not apply, or you will have a different higher rate to pay. If you’re going to get health insurance, you might as well stay in network, so make sure if you have a doctor you know you want to see, that they are in the network for the insurance company you choose to go with. Doctors and treatments that are in the network are also called “preferred” and those not in the network are also called “non-preferred.”
- Premium: This is just a fancy word for what you pay insurance companies each month. You pay this amount each month, and the insurance companies will hold up their bargain and say you have health insurance with them. If you fail to pay this, then you will most likely be dropped from insurance coverage.
- Co-Pay: This is what you will pay your doctor or pharmacist or whoever is providing some care for you. This is usually a flat rate amount given to you by your insurance company. But be aware that co-pays vary depending on what health services you’re getting. Your office visit co-pay will most likely be cheaper than your ER co-pay, and there may be a different co-pay when you see an eye doctor or dentist. Just think of this as how much you’ll need to pay each time you see the doctor or get a prescription filled. How does it work? Say you see your doctor for a checkup and the full doctor’s fee is $250. Your co-pay is $40, you pay $40 to your doctor, and your insurance company pays up the rest of the $210. I suspect that insurance companies probably make us pay co-pays so that we don’t go see the doctor a billion times without a certain penalty of having to pay some money each time we see the doctor. And of course, whatever they can get us to pay, all the more profit insurance companies can make.
There’s also a thing called co-payment maximum which is similar to deductibles, but it only refers to your co-pay during a year. It’s basically the most you’d ever have to pay in a year in co-pays, but it’s most likely way too high for you to ever meet with only co-pays unless you are seeing the doctor on a daily or weekly basis.
- Deductible: This is probably the loosest word that insurance companies will use to try to trick their customers. So keep your guard up whenever you see this word. A deductible is basically how much you need to pay before the insurance company kicks in with the big benefits that they are advertising to you. Deductibles are usually annual, which means it gets set to zero at the beginning of each year. It’s a running tally of how much you’ve paid (and the amount has to be approved by the insurance company), and as soon as you’ve met that amount, the health insurance says you don’t need to pay anything anymore (unless they have a provision that says you still need to pay co-pays after your deductible has been met).
Oh yeah, and premiums and co-pays usually don’t apply towards your deductible. So if you’re only paying premiums and co-pays, it’s rare that you’d ever reach your full deductible and reap the full benefits of your insurance. Well, one way that you could reach that deductible limit is if you get into some big accident and get huge bills from surgery, ambulance, hospital stays, etc. Another way is by incurring a lot of specialized treatment costs that are deemed by the insurance company to go towards your deductible (such as the blood tests that I mentioned earlier, which they didn’t pay for, but the cost of which went towards filling up my deductible). Look closely at the benefits that health insurance plans offer, most likely, there’s a lot of instances where it says “No charge after deductible is met” or something similar. What it doesn’t say is that this type of treatment often isn’t really covered till after the insurance company has deemed that you have met your full deductible.
If you go for a cheap premium, your deductible is probably pretty high, and probably higher than you’d ever meet unless you do get into some serious accident or get some really bad illness. That type of plan only really saves you a good amount of money if you don’t go to the doctor very often, and only want protection against the costs of major medical needs. And watch out for different deductibles, for example if you have dental coverage, that’s probably got a different deductible than your regular health insurance coverage, so even if you meet your full deductible on regular health insurance, you still may need to pay an additional amount for dental work. Watch out for preferred vs. non-preferred deductibles, too. (The general rule is to stay within your network of service providers). If there’s a way for insurance companies to prevent you from meeting your deductible, you know they’ll do it.
- Co-insurance: Just another term for co-pay. It may refer to the co-pay you are liable to pay after your deductible is met. So basically, another way for insurance companies to get more money from you even after your deductible has been met.
- Co-pay vs. deductible: Although these two should be different, sometimes insurance companies will use the word deductible in place of co-pay. This may be popular in bundled insurance plans that offer dental or vision coverage. Whatever they say, just be aware that these two words mean you’re paying something. Even if you don’t expect to have to see the doctor, try to keep these co-pays and deductibles low if possible. You never know how much you may end up paying in case you do go see the doctor.
- Lifetime Maximum Benefit: The maximum amount of money that your health insurance company will ever pay for you in your entire lifetime. This is usually in the millions, so you don’t really have to worry about this…unless of course you get cancer or AIDS or some other life threatening illness which will most likely mean you’re spending a lot of health care money. It’s basically another safety pre-caution for the insurance companies so that they don’t let their customers bankrupt them, or lower their profits.
- Medical vs. Dental vs. Vision: Though the plans won’t outright say it, it’s most likely that your general medical benefits will differ from your dental and vision. Sometimes your health insurance may not even cover dental or vision. And not only do the benefits differ, but the deductibles and co-pays and maybe your premium may be different depending on how the plan is packaged, and how they’re selling it to you. Be on your guard, get as much information on what is covered in each of these three categories (medical, dental, vision) as possible. Although they shouldn’t be considered different coverages, these three are often separated into different categories and sometimes dental/vision coverage is bundled with your general insurance plan and they may be managed by a totally different company that’s independent of the health insurance company that’s providing your general medical benefits.
3. Read all the small print and try to grasp what they’re saying as much as you can before you sign up with a company. It’s all about small print for health insurance companies. That’s how they make money, and that’s how they get you. Someone on the phone isn’t going to tell you all the small print. Research using the internet. Go to the company sites and devote a few hours to reading and understanding. If you don’t like the internet, get the companies to send you all the literature they have. But don’t ever sign up with a company without at least trying to read the small print. It’s not fun, but it’s going to arm you with some prior knowledge of what your health insurance will be about. Even if you don’t fully understand it, it’s going to be useful that you at least tried to read it beforehand. You’ll later know where you may look for an answer if a problem comes up, and you’ll be able to gauge more readily if they’re trying to screw you a few months or years down the line.
That’s all I can think of for now. But if you have questions about finding or understanding health insurance, please leave a comment and I’ll try to address it.
COMING SOON: HOW BLUE CROSS TRIES TO SELL INSURANCE TO YOUNG PEOPLE
August 30th, 2009 at 3:03 pm
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