A Guide to Health Insurance
Ever get lost somewhere between "deductible" and "durable medical equipment" when reading through your health insurance policy? You're not alone. Consumers Union, the nonprofit publisher of Consumer Reports, issued a health policy brief in January after testing people's understanding of health insurance. It concluded that consumers can't review "traditional" health plan information and figure out what it means for them.
People just weren't familiar with the terms and concepts found in health insurance policies. Here are the definitions of some common policy terms to help you get the care that you need.
Resources for the Uninsured
|Preexisting Conditions. If you've been denied health insurance because of a preexisting condition and have been without insurance for six months, you may be eligible for a state high-risk pool or a federal government program called the Preexisting Condition Insurance Plan. PCIP is intended to provide coverage for eligible people until discrimination based on preexisting conditions is phased out under health care reform. For more information, go to www.pcip.gov.|
|Job Change. If you're leaving a job, it's possible that you can take your health insurance with you through the Consolidated Omnibus Budget Reconciliation Act, or COBRA. This allows continued coverage under a group plan for up to 18 months as long as you pay the full premium cost. While expensive, this is often less costly than purchasing a new individual plan. For more information, go to www.dol.gov/dol/topic/health-plans/cobra.htm.|
|Veterans. Military veterans may have the option of going to hospitals and clinics run by the Department of Veterans Affairs (VA). More information can be found at www1.va.gov/health.|
Low Income. If you can't get or afford insurance, you may be eligible for reduced-cost medical care through the government's Health Resources and Services Administration, which offers primary and preventive health care through community health centers. Fees are based on income and need.
The Hill-Burton Act is a law that provides free and reduced-cost hospital services to uninsured people with low incomes. For information on participating facilities and how to apply for care, go to www.hrsa.gov/hillburton.
For help with prescription medication, many companies offer patient assistance programs for low-income people. Learn more at www.pparx.org.
If you lack coverage, talk to your provider. He or she may be able to help design a more affordable medication regimen as well as less costly care.
Types of Plans
A high deductible means that, as a policyholder, you will have to spend a fair amount of your own money, often a few thousand dollars, before the insurance company picks up one penny of medical costs. After the deductible is reached, the insurance is supposed to pay a hefty portion of the rest of your medical expenses for that year, though there are stories about people who ended up paying far more than their deductibles because of loopholes in their policies. High-deductible plans are increasingly offered by employers, who pay less for them than for traditional plans, according to Shana Lavarreda, PhD, MPP, director of health insurance studies at the UCLA Center for Health Policy Research.
A health maintenance organization, or HMO, is an insurance plan that covers visits only to health care providers within its limited network, except in an emergency. Lavarreda says this type of plan makes up about 20 percent of the market. The classic example, she says, is Kaiser Permanente: "If you have Kaiser coverage, you see Kaiser doctors in Kaiser hospitals." While the range of providers is limited in HMOs, one potential advantage is that patient care is typically highly coordinated, with information—health history, test results, prescriptions—efficiently shared among providers of different specialties.
A preferred provider organization, or PPO, contracts with a wider variety of "in-network" doctors at different institutions, but may also offer some coverage for out-of-network providers. To make matters more complicated, a PPO often offers "tiered health plans." These typically offer a policyholder cost savings in exchange for less flexibility in choosing a provider. For example, you may pay a higher percentage of co-insurance if you select an out-of-network doctor. If you are trying to select among tiered health plans, check to see if your provider is on the in-network list.
This national insurance program is for adults 65 and older and people with disabilities. There are four parts to Medicare: A, B, C, and D. Parts A and B are administered directly by the government. Part A covers hospital stays, short stays in nursing homes, hospice care, and home health; Part B covers doctor visits, outpatient services, and preventive care.
On Medicare you still need to pay for care that isn't covered as well as for a portion of covered services through deductibles, premiums, co-insurance, and other charges.
Medicare Part B
Part B provides limited coverage for diabetes screenings, diabetes education, blood glucose testing supplies (meters, test strips, lancets, lancing devices), twice-yearly foot exams (and sometimes shoes or inserts), eye exams to check for glaucoma and retinopathy, A1C tests, diabetes self-management training, medical nutrition therapy, and, if you qualify, insulin pumps (plus insulin for the pumps). Coverage of glucose testing may vary depending on whether you use insulin. Insulin pump approval requires results from a C-peptide test that reveals whether you have complete insulin deficiency, as in type 1 diabetes.
Continuous glucose monitoring is not typically covered by Medicare, though there may be exceptions, and Medicare will allow CGM use for a couple of weeks a year to help with particular diagnostic concerns.
Medicare Part D
Non-pump insulin taken by injection is covered under Medicare Part D, the prescription drug plan administered by approved private insurers. Part D covers vials of insulin, insulin pens, and insulin supplies such as alcohol swabs, syringes, and needles.
Medicare Advantage (Part C)
Medicare prescription drug coverage can also be obtained as part of a Medicare Advantage (Part C) plan. The government pays a private insurer to cover a person for health care, including medications. The plan may include benefits that traditional Medicare doesn't cover, though perhaps at a higher cost to the policyholder.
This national insurance program, funded by both federal and state governments, is for low-income adults, children, and those with certain disabilities. There are often additional criteria for eligibility, which vary by state. The types of health services provided by Medicaid also differ depending on which state you live in. For state-by-state information, go to www.medicaid.gov.
Coverage under Medicaid will be expanded to more people under the Affordable Care Act (ACA), the health care reform law.
Prescription Drugs and Devices
This term refers to a coverage gap in the prescription plans in Medicare Part D. These plans, which are administered by private companies, cover prescription medications up to a certain amount, which can vary depending on the plan (some won't have a "donut hole"). After that limit is reached, you enter the coverage gap, in which you have to pay at least part of the cost of your medications until reaching another annual limit. After that's reached, you're out of the hole, and Medicare starts to cover the meds again, although you may still have a co-pay. Under the ACA, the donut hole is scheduled to gradually shrink and be eliminated by 2020.
Durable Medical Equipment
This is one of the most important terms for people with diabetes to understand, according to Kriss Halpern, JD, a diabetes law specialist. Continuous glucose monitors, insulin pumps, and necessary supplies such as sensors, infusion sets, and cartridges for insulin are considered by insurance companies to be durable medical equipment. Policies will specify how much the insurer will pay toward such equipment. People with diabetes often need to provide two months of daily blood glucose measurements to get their pumps or CGMs covered.
This is a list of medications, both generic and brand name, that an insurance plan covers. It also may specify how much the policyholder pays for a drug. Information on drug tiers (see below) may also be included in the formulary.
Insurance companies often try to encourage policyholders to use less expensive medications by putting these drugs in a tier with the lowest co-pay. The drug tier with the highest co-pay typically includes "nonpreferred" brand-name medications. Insurance companies may also have a middle tier for "preferred" brand-name medications and medications not sold in generic form, such as insulin. When evaluating health care plans, it's critical for people with diabetes to figure out which tier includes the medications they are currently taking, says Lavarreda, so that they don't end up spending too much on medication.
Statement/Letter of Medical Necessity
Your provider can be your best ally in presenting the documentation needed for gaining coverage of things such as insulin pumps and extra test strips. Insurers may approve coverage if they receive a provider's letter stating that a particular service or supply is medically necessary, which means that it is needed for the diagnosis or treatment of your condition and meets accepted medical standards.
Health Care Reform
The Affordable Care Act (ACA) is expected to greatly improve the lives of people with and at risk for diabetes, and the American Diabetes Association was active in determining the law's provisions—such as banning discrimination based on preexisting conditions and preventing insurance companies from taking away coverage when care is most needed. The ADA will continue to be involved in effective implementation of reform.
A recent example of the ADA's role in reform involves making health insurance policies easier to understand. As of Sept. 23, 2012, all plans will begin to include a "summary of benefits and coverage" that will say in plain language what the policy does. This document will include examples of how people with certain conditions can expect to be covered under a particular plan. Thanks to the ADA and other like-minded groups, one of those examples will be managing type 2 diabetes. Another example of the ADA's efforts concerns preventive care. The government has a list of services that count as preventive care and are therefore fully covered under the health care reform law. The ADA testified that screening for diabetes in pregnant women should be included at no cost to the patient as a preventive service: Such screenings will be covered in all new plans starting Aug. 1, 2012.
Flexible Spending Account (FSA)
This account allows you to specify at the beginning of the year how many pretax dollars you want set aside for medical expenses, which could include prescription medications, co-pays, deductibles, and medical devices. However, those untaxed dollars are good only for that year; any dollars left in the account at year's end disappear. FSAs often are tied to a debit card, which makes spending the money simpler. Other plans require policyholders to send in receipts and paperwork to claim reimbursement.
Health Savings Account (HSA)
Similar to an FSA, this account allows people to use pretax dollars to pay for medical expenses, but HSAs are only for people with certain high-deductible insurance policies that meet government criteria. Unlike with FSAs, the money in HSAs can be used in that year or in the future.
Usually provided by a primary care physician, nurse practitioner, or physician assistant, primary care includes health services and screenings, such as blood pressure checks and Pap smears, to prevent and treat common illnesses. For many people with diabetes, their primary care provider coordinates with specialists such as endocrinologists and diabetes educators, and performs routine checkups.
This class of health services includes checkups and screenings, such as eye and foot exams and blood tests for gestational diabetes and cholesterol levels.
Any type of medical test that is used to help diagnose a disease.
Co-payment or Co-pay
The flat rate that a policyholder pays up front for a covered medical service or prescription medication. The co-pay amount can vary by the type of service or medication.
The amount that a policyholder is responsible for paying for a medical service, given as a percentage. The co-insurance may vary depending on the type of service and, unlike a co-pay, is paid after a service, once the bill is finalized. For example, an insurance plan may cover 90 percent of a hospitalization. The co-insurance, your portion, is then 10 percent.
The amount a policyholder must pay in a given year before the insurance company kicks in. Not all health insurance policies have deductibles. Some plans have a single deductible for all types of care, while others may have deductibles for different types of expenses—for example, a specific deductible for prescription drugs.
Some insurers have lifetime or annual limits on how much they will pay for your medical care, called benefit maximums and annual dollar benefit limits, respectively. The health care reform law will ban most of these limits, says Halpern.
A monthly payment for insurance that can be paid by employers, employees, or individuals in exchange for continuing coverage. Often, employers require that employees pay a portion of the premium, which can often be paid with pretax dollars.
The policyholder's total expenses for health care, including co-pays, deductibles, co-insurance, and anything else not covered by the insurer.
These are a series of numbers that the Centers for Medicare and Medicaid Services, which administers health programs for the federal government, uses to group similar diseases as well as to track their frequency in the United States. Diabetes is coded as 250, with 93 subtypes running from 250.01 to 250.93. For example, 250.43 is "Diabetes with Renal Manifestations, type 1 [juvenile type] uncontrolled." These codes are associated with fees and are used by health care providers to get reimbursed for services.
A mental or physical condition (including pregnancy, in some plans) that existed prior to enrollment in a health plan. The specifics vary depending on whether a policy is through an employer or purchased as an individual. Genetic information cannot be considered a preexisting condition. Some policies will exclude care for a preexisting condition indefinitely or for a limited amount of time, which is called a preexisting condition exclusion period. Under health care reform, insurance companies will not be able to deny coverage or charge higher premiums based on preexisting conditions. Under the ACA, this is already true for children and will go into effect for adults Jan. 1, 2014.