Health
Insurance - An Overview of Plan Types:
The marketplace for
health insurance coverage has continued to evolve as the costs for health
care spiral ever higher...and so have available Health Insurance Plans.
The volatile market
and issues seem to center on creating ever newer plans that strike a
balance between benefits (some mandated by State or Federal law, and
others not) and costs.
Historically,
Insurers best method for getting at the cost side of the equation is to
employ the required use of doctor and hospital discounted fee Networks,
where pricing and other service protocols can be measured, and where
negotiated discounts can be achieved. The benefits within these plans are
either richer or poorer depending on where medical services are received
by the end user consumer - either in Network or out of Network.
A newer, and perhaps
more novel approach, is to put the decision in the consumers hands by
having them negotiate provider prices at the point of purchase - this can
occur through the use of Indemnity, PPO, POS or HSA types of health plans
(see below). The believed positives to come out of these types of plans
are that if consumers become more directly involved in the cost for
benefits received equation, then costs will come down for everyone.
Particularly, medical providers, who are for profit businesses, will want
to attract and retain clients to pay their operating bills and to generate
income, and will therefore tend to work harder to find workable pricing
arrangements to secure the business of discerning consumers who, now that
they are more directly responsible for the payment, will shop both skills
and costs before writing a check for services.
Regardless of the
type of Insurance coverage, the solution to controlling spiraling costs
persists. Consumers can ill afford to be without some form of coverage, as
the liabilities are simply too great to bear.
Now, let us look at
an overview of the available types of Health Insurance Plans.
The
Predominant Types of Health Insurance Plans Are (in order of consumer
awareness):
-
HMO (Health
Maintenance Organization) - where your care is managed via a
gatekeeper PCP, or Primary Care Physician, which is part of a closed
Network of providers, and where you receive more first dollar benefits
and preventative care with a low co-pay vs. a high deductible.;
-
PPO (Preferred
Provider Organization) - where you obtain discounted medical
services, usually only after a deductible is met, by using doctors
within a contracted Network of providers, or, non-Network providers but
at reduced benefit levels;
-
POS (Point of
Service) - where you decide in which environment you will receive
medical care; namely, either in an HMO Network, PPO Network or
non-Network (where benefits decrease the further you stray from HMO
Network).
-
HSA
(Health Savings Accounts) - where you obtain medical services either
through a discounted PPO Network of providers or by any providers of
your choice (depending on the type of HSA), and where the Plan itself
includes a separate Savings Account coupled with a High Deductible
Health Plan ("HDHP" - catastrophic protection coverage). The
HSA is a NEWER TYPE of Health Insurance Plan, and is rapidly growing as
the plan of choice among consumers.
-
Indemnity
(Fee-for-Service) - where you obtain medical services from any
licensed providers of your choosing. No longer readily
available in the marketplace due to its non-competitive pricing, except
in versions such as the newer HSA (see below).
The HMO:
As a general rule
you would have to select a non-HMO with a deductible of $500 or more to
equal the lower premium costs of an HMO. HMO’s typically require Co-Pays
and therefore generally have no deductibles, require no claims paperwork,
and have minimal pre-existing condition exclusions for covered benefits.
There are some
perceptual positives and negatives with HMOs, depending on one’s personal
viewpoint:
-
The negatives
are: you must use only HMO doctors and hospitals, having all of
your medical care governed by a "gatekeeper" doctor, or Primary Care
Physician ("PCP"), who is part of an IPA, or Independent Physicians
Association. It is the PCP and the IPA that actually do the hands on
management of all of your medical care; therefore, you have somewhat
less freedom of choice over your medical care providers & care.
-
The
positives are: you generally get a premium rate that is less than
plans with comparable benefit levels, you have generally better overall
benefits than a non-HMO, plus no deductible, no co-insurance for
out-patient care, and no claim form responsibilities. HMOs are easier to
use and require less hands on involvement by the consumer, due to the
management of the care being fully provided by the HMOs contracted
PCP/IPA.
The PPO:
A PPO allows
one to self refer to, and to receive services either via discounted
Network providers, or via any licensed providers of their choosing.
However, when using non-Network providers, benefits are reduced, since the
discounted services have not been contracted. The built in incentive of
these plans is to direct one to services where costs are contractually
both discounted and controlled. The further one gets away from the
Insurance Company negotiated cost controls within the discounted Network,
the lower the benefits, but at least one has the freedom to choose their
source of care while still having coverage in either environment.
The
POS:
A very popular
"middle ground" type of policy is the "POS" plan design. POS plans
are highly flexible plans allowing you to determine your own level of
benefits based on where you choose to receive medical care; namely, via an
HMO provider, a PPO provider, or from any doctor of your choice. Of
course, the further you get away from the Insurance Companies negotiated
cost controls within the HMO & PPO (their discounted provider Network),
the lower the benefits, but at least you have the freedom to choose your
source of care while having coverage in all environments.
The HSA:
HSAs offer
special tax benefits while giving you freedom from HMO, managed care,
constraints. There can be HSAs with or without PPO Networks. An HSA is
comprised of 2 components; namely,
- a qualified High Deductible
Health Insurance Plan ("HDHP"), and
- an HSA Savings Account, which is
equal to 100% of the High Deductible you select. Money going into the
HSA Savings Account is 100% tax deductible, and money coming out of it
for "eligible medical expenses" (based upon broader Federal definitions)
is Tax Free.
For those who are
healthy, and young to middle aged, HSAs can accumulate a lot of cash over
the years, which if not used for medical needs, may eventually be used to
supplement one’s retirement income. If used in this latter fashion, and
taken after Age 64, the 10% penalty tax no longer applies and the HSA
income distributions are then taxed at ordinary income tax rates. Some
may also plan to use these accumulated dollars to fund Long Term Nursing
and/or Home Health Care Insurance needs. Since these are also considered
a form of legitimate eligible medical expenses the money would also be
received Tax Free.
With HSAs there is
the added incentive to protect the tax deferred accumulations within the
Savings Account component of the Plan (those monies which are there to
meet the expenses of High Deductible requirement).
We have written
extensively on HSAs. To learn more about HSAs please review the following
linked pages of our website as well as the Treasury’s Field Bulletin:
The Indemnity:
Most Insurers no
longer offer this type of plan for the main reason that it is too costly.
Indemnity plans are open architecture plans that allow one to go to any
licensed provider of their choosing. Historically, Insurers have found
that such plans result in service charges where the "sky is the limit", or
"whatever the market bears"; therefore, most carriers no longer offer such
plan types.
The best type of
Indemnity Plan (again, a plan type that allows you to go to any Doctor of
your choosing) is best available through a new type of Medical program
called an HSA or Health Savings Account (prior to 1/1/2004 known as an MSA
- Medical Savings Accounts (1997-HIPAA created as a trial program that was
extended through 2003, and ended with the creation of the HSA).
HSA Plans can be either PPO or
Indemnity in structure. The basics of an most Indemnity and HSA plan types
is that they require one to first meet a High Deductible before any
catastrophic benefits are paid out. The thinking of most Insurers is that
this will force or compel the consumer to get involved before any
costs are incurred, and will also motivate them to negotiate more cost
competitive pricing from such providers.
Student Health Insurance
Background Information: On February 11,
2011, the Department of Health and Human Services (HHS) published a Notice
of Proposed Rulemaking in the Federal Register relating to student health
insurance coverage. The proposed regulation clarifies the circumstances
under which health insurance sold to students enrolled in colleges and
universities is considered a type of individual health insurance coverage.
It also provides that certain Public Health Service (PHS) Act requirements
would be inapplicable to such coverage. The policy set forth in the
proposed rule would be applicable to policy years beginning on or after
January 1, 2012.
Q. What student health plans are affected by the proposed rule?
A. Student health plans that will now be considered “individual health
insurance coverage” include those that meet the following criteria:
Plans provided by a college or university through a
health insurance company. (This excludes health insurance plans for
students that are self-funded by the college or university.)
Plans that are only available to students enrolled in
the college or university sponsoring it, as well as their dependents.
Plans that are available to students regardless of
their health status.
Q. How is health insurance sold to students considered to be
“individual health insurance coverage” different than “short-term limited
insurance”? Do PHS Act requirements apply?
A. The proposed regulation clarifies the circumstances under which
health insurance sold to students is considered individual health
insurance coverage, as opposed to short-term limited duration insurance.
Insurance coverage that meets the definition of short-term limited
duration insurance is not subject to PHS Act requirements.
With respect to student policies that are individual health insurance
coverage, HHS will not consider PHS Act requirements to apply to such
coverage for policy years that begin before the first policy year to which
the final regulation will be applicable. In addition, issuers that had a
reasonable belief that the insurance coverage that they were providing to
colleges and universities met the definition of short-term limited
duration insurance will not, for purposes of federal law, be considered to
be out of compliance pending the start of the first policy year to which
the final regulation will be applicable.
Starting with the first policy year to which the final regulation will be
applicable, any student health insurance coverage (that is, any insurance
sold to students that does not meet the definition of short-term limited
duration insurance set forth in 45 C.F.R. §144.103) will be subject to all
requirements that will apply to student health insurance coverage under
the final regulation.
Worldwide Travel Health Insurance
International travel is becoming more widespread throughout
the world. We offer insured health plans for foreign nationals traveling
to the US and for US citizens traveling or living abroad.
Click Here for plans, rates and online sign up.
Obtaining Health Insurance Approval:
Health Insurance is
MEDICALLY UNDERWRITTEN, and therefore subject to an Insurer’s approval
process. It is not guaranteed. Therefore, it is critical that you give
yourself ample time to obtain coverage. The application process itself
takes approximately 3-6 weeks.
There is a form of
coverage called "Temporary Medical", which is available to provide
immediate (within 24 hours), interim coverage; however, these plans
generally do NOT cover pre-existing health conditions.
We suggest
submitting applications for both a permanent & Temporary plan so that you
are not without coverage, unless you are presently covered. If you are
presently covered DO NOT consider canceling your coverage until you
receive written approval from any new plan to which you may apply and
then, of course, any cancellation should take effect only in coordination
with or after any new plans effective date.
Click onto the following for an
instant quote for over 50 plans from a wide spectrum of Insurers, or
simply call us at: 1.800.482.5347.
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For those of you who are more
familiar with names like Anthem Blue Cross or Blue Shield, and prefer
these well known brand name Insurers, the above link will also quote them,
along with most other familiar carriers here in the State of California.
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NOTES: Important factors that will effect the approval
and issuance of any Health Insurance coverage include such factors as the
following. If you have any such problems that have or would likely prevent
you from obtaining health insurance an alternative is to consider Group
Health Insurance where you cannot be denied coverage or coverage for
pre-existing conditions, so long as you quality for Group Insurance.
CLICK HERE to
learn if this option can work for you:
Pre-existing medical conditions, histories, and/or
ongoing medical problems; sex; age; residence/zip code area.
- Misc. Need Information for
Quoting Purposes:
- Your name and birthdates
and those of any dependents to be covered
- Telephone numbers and email
addresses, and best time and place to reach you
- Home address and Zip Code
