Writing in the Colorado Statesman on March 8, 2013, Miller Hudson has done the best work I have seen so far in explaining why we are in the fix we are in with the high cost of healthcare, what affect the Affordable Care Act is likely to have and what some ideas about how it might all become workable in the future. I highly recommend you invest a few minutes in reading this article.
Here, Courtesy of the Colorado Department of insurance, is their “Glossary and Definitions” for health insurance. This information is provided by DORA so you can be familiar with some of the terms you may see in a health insurance policy. If you have questions, call the Division of Insurance for more information.
Certain products and services sold to consumers may appear to be health insurance but actually address very specific concerns. Be sure the product/service you are considering is health insurance, if that is what you want to buy.
– Does the word “insurance” appear in marketing materials?
– Does the health insurance carrier and/or the salesperson for the carrier appear in the Division of Insurance database as a licensed carrier and/or licensed insurance producer in Colorado?
An ”access fee” is a specific amount that a person covered under the policy must pay each time certain services are used or received. The access fee is not part of the deductible amount, and is not usually reimbursed by the health insurance carrier.
Catastrophic Health Insurance
Catastrophic health insurance is a type of health insurance that typically has very high deductibles. The coverage for a catastrophic policy does not kick in until you have paid your share of the deductible amount in the policy.
“High Deductible Health Plans (HDHPs)” are catastrophic health insurance policies created as a way to lower overall medical costs by providing a lower monthly premium in exchange for a higher annual health insurance deductible. With catastrophic health insurance plans, you pay for almost all medical care until you reach the annual deductible amount. If eligible, some people combine a high deductible health policy with a Health Savings Account (HSA). Read the policy carefully to understand what will be covered and how much your share of the costs will be if you need medical treatment.
After you have met the deductible for the covered period of time, your health policy may have a “co-insurance” that provides the patient will be responsible for a certain percentage of medical costs after the deductible has been met.
An individual health insurance policy may have a defined contestability period, so if the insured person becomes seriously ill during that time the health insurance carrier may check for any fraud or deception in the person’s application and medical history. This is intended to protect the carrier from individuals who may buy health insurance policies knowing they are in poor health and who may be misrepresenting themselves during the application process.
A “co-pay” is a fixed payment amount that is the responsibility of the patient. For example, a health policy may state that the patient must make a $25 co-pay for each doctor visit, and/or that the patient must pay $15 co-pay for each covered prescription medication that is purchased. (These amounts are examples, your policy may have different co-payment amounts.) The patient, or covered person, must make the required payment each time covered services are used. The amount of any required co-pays should be specified in the policy you select.
A deductible is a specific amount of money that you agree to pay before you receive any benefits for covered services from the health insurance carrier. Deductibles can vary, but if your policy has a $1,500 deductible, and you receive doctor’s care and medication that costs $1,200, you must pay for all of it. The carrier is not responsible for the amount of the covered service or medication you pay for up to the amount of deductible.
In addition to the monthly premium, or cost to be covered by insurance, you must also pay for all covered services until you reach the deductible amount. Generally, the higher the deductible is, the lower the monthly premium will be. If you agree to pay a $10,000 deductible, your premium would be lower, but if you are sick or injured, you will have to pay $10,000 worth of medicine and treatment before the carrier pays anything. (Check your policy to see what the options are.)
The entire deductible has to be met before your carrier will cover many of the services you could need, including hospital stays.
After you reach the deductible amount during a specific period of time, the carrier will begin reimbursing for covered medical services and treatment as specified in the policy. This may be at 100% co-insurance or could be another percentage, such as 50% of your medical treatment and services.
Once you meet your deductible then you’re done for that calendar year or for the period specified in your policy. The following year, or next deductible period, you have to start satisfying the deductible all over again.
Disclosure (of medical history and status)
When applying for individual health coverage, you will be asked to “disclose” any existing medical conditions, existing medications and past medical history. You must answer the questions truthfully. If the health insurance carrier learns that you have not provided all requested information about your health status, the policy may be cancelled and your coverage denied.
Discount Health Plan
A “discount health plan” refers to a type of “buyers’ club” that specifically markets reduced-rate health care services. The Plan typically charges a membership fee in exchange for a list of health care professionals who will provide services at a discounted rate to members of the Plan. Plans may be marketed to consumers as a way to save money on various health services, such as medical, dental and vision care, as well as pharmacy and/or chiropractic services.
Be aware that state laws protecting consumers of insurance will not protect people who buy Discount Health Plans. For example, health insurance laws that guarantee access to providers, do not apply to these plans. Discount Health Plans do not qualify as “creditable health insurance coverage.” This means that if you drop your health insurance after purchasing a Discount Health Plan and later decide to purchase health insurance again, your new insurance may not — and probably will not — cover pre-existing conditions for a period of time.
The Division of Insurance provides a guide to understanding Discount Health Plans.
If you have been diagnosed or treated for a previous condition, illness, or injury, before you were insured, the health insurance carrier may not want to cover continuing treatment for that medical condition. The carrier does not want people to wait to purchase insurance coverage until they know they will need treatment. When a condition is already known to the consumer, the carrier may offer health insurance that covers other conditions that arise, but excludes treatment for anything that was pre-existing before the insurance was purchased. Naming specific illnesses, injuries or conditions that are “exclusions” on the policy means that the carrier will not pay for any treatment associated with them. Some individual health policies may allow coverage for the pre-existing condition after a certain time period (usually 12 months) has passed with continuous health insurance coverage.
An exclusion in your policy may also mean refer to anything the health insurance carrier will not cover, ranging from a type of drug to alternative treatments to a type of surgery. These exclusions can vary from policy to policy. A hospital stay may list a number of exclusions, sometimes anything “extra” that is not a medical necessity – from watching a rental television to using a hospital phone to deluxe meals – may not be covered. Cosmetic or elective surgery is often excluded, unless it is done in response to a medical condition. Dental treatment and vision needs are usually excluded unless treatment is required due to an accident or illness. If dental and or vision treatments are covered, it should be spelled out in your policy.
An exclusionary rider is a part of your policy that states when there are certain conditions or types of illnesses that will NOT be covered by your policy. The exclusionary rider eliminates coverage for any medical treatment associated with the medical condition or previously diagnosed illness specified on the rider.
Health Savings Account (HSA)
A Health Savings Account is a type of savings product that offers a different way for consumers to pay for their health care. HSAs are designed to encourage individuals to save money they may need for future health care expenses on a tax-free basis.
To be able to take advantage of HSAs, you must be covered by a qualified High Deductible Health Plan (HDHP). Because an HDHP generally costs less than what traditional health care coverage costs, the money saved on insurance can be put into the Health Savings Account.
People can sign up for Health Savings Accounts with banks, credit unions, and insurance companies, and sometimes their employers. The IRS has more information on the tax benefits and consequences of HSAs.
Limited Benefit Health Insurance Policies
“Limited benefit health insurance policies” can cost far less than traditional insurance, but cap what health insurance carriers will pay toward medical care. For example, the policy may pay $2,500 per person, per year, an amount that would be exhausted by a single trip to the emergency room. Some limited benefit health insurance policies have daily caps, such as paying a few hundred dollars a day toward hospital coverage. This differs from traditional health insurance, which generally covers most medical expenses in a given year, after deductibles and co-payments have been made.
Before purchasing a “limited benefit health insurance policy”, find out if you will be covered for hospital visits or routine doctor’s care and make sure you understand the all of the limits in the benefits provided.
Major Medical Health Insurance
Major Medical health insurance policies typically provide comprehensive coverage for hospital, doctor, x-ray and laboratory expenses.
Mandated Health Benefit
Mandated health benefits are benefits that are required to be covered by law. There are both federal and state mandated benefits. In Colorado (as in many states), the mandated health benefits may not apply to all types of health insurance policies or plans offered in the state. Some mandated health benefits are required of group health plans, but not of individual policies. If you have previously been covered by a group health plan, and are now shopping for individual health insurance, check carefully to see what the new policy covers. Many people assume that individual policies will have the same health mandates, and they may not. Covering some of these health mandates is optional for individual health policies.
There are some mandated benefits that are required by federal law, and there are some that are required by state law. Colorado statutes may mandate some benefits for certain types of insurance (benefits that must be covered by group plans, for example), that are not mandated for all types of insurance (such as individual coverage.)
If you have experienced an illness or disability for which you have been diagnosed, treated or advised, that is considered a “pre-existing condition.” When you apply for an individual health insurance policy, you will be asked to describe any pre-existing conditions or previous treatment. The health insurance carrier may decide to offer you health coverage with an “exclusion” for the specific condition, even if you are not currently experiencing problems. This means the carrier will not cover any medical treatment for the excluded condition. Failing to mention a pre-existing condition for which you have previously sought medical advice is a reason for the carrier to rescind or cancel your policy at a later date. It is always advisable to provide a full and complete medical history.
The amount paid to the health insurance carrier each month to purchase health coverage. The premium is paid by the policyholder on an individual policy. On employer group plans, the cost of the premium amount can be shared by the employee and the employer.
Reasonable and Customary Charges (also called “Usual, Customary and Reasonable” or UCR)
The cost associated with a health care service that is consistent with the going rate for identical or similar services within a particular geographic area.
Reimbursement for out-of-network providers is often set at a percentage of the “usual, customary and reasonable” charge, which may differ from what the provider actually charges for a service.
When an insurer disallows a portion of a charge as being in excess of the Usual and Customary allowance, it means only that the charge is in excess of the standard the company used to determine Usual and Customary, or UCR. Providers are free to charge whatever fee for service they choose. Your insurance coverage is designed to provide benefits up to the plan’s Usual and Customary percentile and is priced accordingly.
Your policy should contain a definition of Reasonable and Customary (or UCR) and explain how claims will be paid. If you disagree with the amount paid or if you believe a claim was denied improperly, there is a step-by-step process by which consumers may appeal the decision.
If you have questions or complaints about your insurance, please contact the Colorado Division of Insurance for assistance.
Broadly speaking, the Colorado Autism Insurance reform Law(C.R.S. 10-16-104), which went into effect July 1, 2010, applies to all children under the age of 19.
Plans must provide at least $34,000 of coverage per year for applied behavior analysis from birth to age nine. Plans must provide at least $12,000 of coverage per year for applied behavior analysis a child nine years of age or older until the child is 19.
The Affordable Care Act requires Americans have access to quality, affordable health insurance. To achieve this goal, the law requires health plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges (Exchanges), offer a comprehensive package of items and services, known as “essential health benefits.” Essential health benefits must include items and services within at least the following 10 categories:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management, and
- Pediatric services, including oral and vision care
The challenge now facing the Colorado Department of Insurance is what additional, if any, benefits they will require the new policies to contain. Each state is empowered to devise their own list.
Here is a partial run down of additional requirements being consider in other states and of course, each benefit has a very active advacacy group pushing for inclusion:
Acupuncture (now a requirement in California)
Pre-vacation visits to travel clinics (whatever this is, apparently it will be required in Colorado)
Bariatric Surgery (stomach reduction)
Each of these services is, of course, very dear to a segment of the population. The question before the Department of Insurance is “is it reasonable to require all health insurance policy holders to pay higher premiums for these benefits, when they may or may not be “”essential””?
Here is an excellent article written by the Washington Post on this subject.
One of the most impactful regulations of the Affordable Care Act (Obamacare) that has already gone into effect is the requirement that no child under 19 may be turned down for health coverage. For the family with a child with a significant ”pre-existing condition” this is a godsend. For the insurance companies it is a headache.
The reason that this is difficult for the insurance companies, is that although they can “rate-up” the child’s portion of the premium up to 200%, some of these kids have conditions that may cost $100,000′s to treat
Another concern is that parents, knowing the insurance companies must cover their child, will not be willing to purchase and pay for coverage until the child is “literally in the ambulance on the way to the hospital.”
While a parent and child may apply anytime for insurance, to ameliorate this situation somewhat, the feds have allowed the insurance companies to only offer child-only policies during ”open enrollment” periods, except in the case of a “qualifying event.” In Colorado those open enrollment periods are January 1-31 and July 1-31 with coverage starting 30 days after the enrollment period.
Outside these periods, the only other times insurance companies are required to offer child-only coverage is in the case of a qualifying event. A qualifying event is defined in the new Colorado law as within 30 days of birth, adoption, marriage, dissolution of marriage, loss of employer-sponsored coverage, loss of eligibility for Medicaid or Child Health Plan Plus (CHP+), entry of a valid court or administrative order mandating the child have coverage, or involuntary loss of existing coverage other than because of fraud, misrepresentation or failure to pay premium.
A carrier may deny coverage if the child has access to other creditable coverage such as a parent’s plan through an employer.
Most health insurance carriers will offer only one of their plans to child-only applicants. These plans are usually bare-boned and are difficult to apply for, i.e. paper applications, no agent involvement, etc. The only company we work with in Colorado that offers their full array of plans, and no additional barriers in applying, is Rocky Mountain Health Plans.
Of course, we expect this will all change on January 1, 2014 with the full implementation of the Affordable Care Act and the exchanges that go with it.
If you’d like to know more about child-only policies, please call me at 303-541-9533.
Clients are often concerned that they will get “locked into” a long-term commitment when they purchase individual health insurance. The truth is that you may cancel your plan whenever you choose, and most companies will reimburse you for any time you have paid for, but not used.
However, your insurance company is required to continue to offer you coverage as long as you continue to pay the premium and have told the truth, to “the best of your knowledge and belief” on the application. Once your health insurance policy is in place, you cannot be singled out for premium increase or termination no matter how many claims you make. You must be treated like everyone else in you age group and Zip Code.
If you would care to know more about this, please give me a call at 303-541-9533.
Colorado Continuation/Conversion is a state law that assures an employee who leaves a company with less than 20 full time employees and has been covered by the firm’s health insurance plan for 6 continuous months, a continuation of their health insurance coverage for up to 18 months, except in cases of “gross misconduct.” For an employee leaving a Colorado based company with more than 20 employees, the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) applies.
The ex-employee will be responsible for the full premium (the combination of that which the employer and the employee were previously paying) plus a small administrative cost.
Within 10 days of termination, the employer must sent written notice to the employee of the right to continue. The employee then has an “Election Period” of 30 days from termination to notify the employer of acceptance.
If after this period the employee decides they do not want to accept Continuation coverage, they owe nothing. However, if they do decide they want to accept the coverage, they will owe premium back to their last day of employment.
One concern with smaller companies is that if the firm goes out of business and/or cancels their health insurance plan, this whole option disappears for the ex-employee.
Colorado Continuation/Conversion is a form of “group health insurance” and generally cannot exclude coverage for pre-existing conditions. However, because of this, the premiums are much higher than a relatively healthy person or family could obtain with an individual policy.
If you would like to know more about your options, please give me a call at 303-541-9533.
Well, to start off, you are a year older each birthday and thus statistically more expensive to cover. Now, the increase for a 25 year old that turns 26 is relatively small. But, for a 55 year old, with growing health care needs that turns 56, the increase can be significantly higher.
So, the older you are, the greater your increase will be each year.
Additionally, there is something called “medical inflation” that is different from your run-of-the mill cost of living increases. Medical inflation takes into account all the expensive new tests, prescriptions, procedures, etc. that come along each year. Your present plan will cover these, but there is a cost involved.
Then of course there are the new federal and state mandates larded on as requirements to health insurance plans. In the past few years the Affordable Care Act has added no co-pays for wellness visits, a provision that no child under 19 can be denied coverage for a pre-existing condition and eliminated any annual and life-time dollar limits to coverage as just a few of the new, expensive add-ons. In Colorado, the recent requirement that all new policies must cover maternity has also significantly increased costs.
These are the basics, but if you need a more detailed explanation go here.
Or you can just call me at 303-541-9533 and we can talk about some ways to trim your premium costs.
Under Colorado law, your child will automatically be covered by your (father or mother) insurance plan for the first 31 days of life, without notification or payment of premium.
If you do notify your plan of the child’s birth within the first 31 days, he or she will automatically be added to the plan going forward. As no new underwriting is required, this law is to assure coverage in the case that the child is born with problems.
Of course, you will be charged extra premium in the same manner you would for any new dependent.
Want to know more about it? Please give me a call at 303-541-9533