Dealing with health insurance issues can be confusing and frustrating. This information is to help you understand some of the basics of public and private benefits and to help you avoid common problems.
Benefit programs and health insurance policies vary in terms of what they provide or cover. Take the time to learn about your benefits and call your insurance representative to make sure you understand how your policy works. This could save you from a great deal of frustration. Keep in mind that your prescription coverage may function differently from your regular health coverage.
Health maintenance organization (HMO) plans usually contract with a specific list or panel of doctors from which you must choose. As an HMO member, you have a primary care doctor who is responsible for your care. To receive care from a specialist, you must get a referral from your primary care physician. As long as you see doctors within the HMO network, you will be required to pay only a small co-payment per visit. The co-payment generally ranges from $5 to $25. Most other charges are covered by the plan.
There are no deductibles or claim forms as long as the care is received from providers within the plan.
If you want to see a medical provider who isn't within the HMO network for a second opinion or for other medical care, you'll need written authorization from the HMO medical group. If you don't get authorization for the visit, the HMO won't pay for the costs of the visit. The authorization process can take up to a week, so plan ahead. If your request to receive a particular treatment or to see a specialist outside of the plan is denied by the HMO, you can appeal the decision (see section on Appealing Rejections).
Indemnity plans allow you to choose any doctor or hospital when seeking medical care. These plans typically have a deductible, which you pay before the plan pays for any medical expenses. Once you pay the deductible, the health plan pays a percentage of the medical expenses. Many plans pay about 70 percent to 80 percent of the bill.
The percentage of the bill paid by the indemnity plan is called co-insurance. You're responsible for paying the remainder of the bill. The amount you pay is called patient liability.
Indemnity plans vary greatly. You should check the details of your plan as it relates to you.
Although many plans require you to pay a co-insurance of 20 percent, you only pay this percentage until you reach your annual out-of-pocket maximum. If you have an out-of-pocket maximum of $2,000, forexample, the insurance plan will pay 100 percent of your claims after you have spent this amount.
Preferred provider organization (PPO) plans combine some elements of HMO plans with elements of indemnity plans. Like the HMO, PPO plans have contracts with a specific list of medical providers. If you see a doctor who is in the network, the PPO generally pays 80 percent to 100 percent of the medical bills after you pay the deductible.
If you use providers who are outside the PPO network, the plan will pay a lower percentage of the bill than if you use providers within the network.W hen you receive care outside of the network, the plan will require you to pay a certain amount, called a deductible, before it will cover any of the medical expenses you incur outside of the plan.
Although many plans require you to pay a co-insurance, you pay this percentage only until you reach your annual out-of-pocket maximum. If you have an out-of-pocket maximum of $2,000, for example, the insurance plan pays 100 percent of your claims after you have paid this amount.
A point of service (POS) plan is the most versatile plan, providing three types of coverage — one that functions like an HMO, another that functions like a PPO and a third that functions like an indemnity plan.
As a member of a POS plan, you can use all of these different types of coverage at any time, switching back and forth between different forms of coverage depending on the doctor or type of care you wish to receive. Each level of coverage is called a tier.
Tier 1 functions just like an HMO. If you choose to receive your care through your primary care doctor in your HMO, you will be responsible for only a small co-payment and no annual deductible. Your primary care doctor can refer you to other specialists within the HMO.
Tier 2 functions like a PPO. You can self-refer to any provider in the PPO network of doctors. The insurance will pay for a certain percentage of the medical charge. You're responsible for an annual deductible and co-payments.
Tier 3 functions like an indemnity plan. You can self-refer to a provider of your choice outside the network.
The insurance will pay for a lower percentage of the medical charge than in tier 2. You're responsible for an annual deductible and a higher co-payment that's greater than that of tier 2.
Although many plans require a co-payment, you pay this percentage only until you reach your annual out-of-pocket maximum. If you have an out-of-pocket maximum of $2,000, for example, theinsurance plan pays 100 percent of your claims after you pay this amount.
These are plans in which a company or union covers your medical expenses with money set aside to pay health claims. Since this type of coverage is less regulated, there is a great deal of variation among the policies. A member of a self-funded plan should thoroughly review benefits to see what is covered. For most self-insured plans, benefits for pre-existing conditions are severely limited during the first year of coverage.
COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows individuals working in companies of 20 or more employees to continue their health insurance benefits for up to 18 months after their employment terminates for any reason, excluding gross misconduct.
During the time that you're covered by COBRA, you're responsible for paying 102 percent of the total health insurance premium, including any portion of the premium that may have been paid by your employer. If you cannot afford the monthly payments, you might be able to use the Medi-Cal/Health Insurance Premium Payment (HIPP) program to pay your premiums (See section on Medi-Cal/HIPP).
If you have a Social Security-approved disability that started within 60 days of when you elected your COBRA benefits, you're eligible to use OBRA to continue your health insurance benefits for an additional 11 months.
OBRA is a federal law that allows individuals to extend their COBRA coverage for an additional 11 months. Individuals who elected to use COBRA because of a Social Security-approved disability are eligible for OBRA. During the time that you're covered by OBRA, you're responsible for paying 150 percent of the total health insurance premium, including any portion of the premium that may have been paid by your employer.
If you're still disabled when your OBRA coverage expires, you'll be eligible for Medicare, which provides health coverage for people who have been disabled for 29 months and are approved for Social Security.
Cal-COBRA is a state law enacted Oct. 3, 1997, that requires employers with more than two and less than 20 employees to provide employees the right to continue health insurance benefits for 18 months after their employment terminates for any reason, excluding gross misconduct.
You're responsible for paying 110 percent of the total health insurance premium for the first 18 months, and if you have a Social Security-approved disability, a maximum of 150 percent for an additional 11 months. This includes the portion of premium the employer may have paid.
If you have a pre-existing medical condition and have difficulty obtaining health insurance, you might be able to join group health insurance through a professional association. There are many different associations, such as the American Bar Association, Actors Association and American Medical Association. Once you obtain health coverage through your association, you pay the medical premiums.
If you join an association and have a choice of health care plans, keep in mind that indemnity plans and PPO plans often have a period of up to six months before they cover you for a pre-existing condition, if you have not had previous medical coverage. HMO plans are required by law to cover your pre-existing condition immediately.
The Health Insurance Plan of California (HIPC) offers coverage for people who work independently or who work for small businesses. This plan pools together a large number of individuals and offers many of the options previously available only to large businesses. As a HIPC member, you may be eligible to choose from many HMO or POS plans. For more information, call (800) 255-4472.
The Major Risk Medical Insurance Program (MRMIP) is a state program that provides medical insurance for people unable to obtain medical insurance in the open market. If you have a pre-existing condition and have been denied coverage by private insurance companies and are not eligible for Medicare, you may be eligible for MRMIP.
The plan offers a wide range of medical providers with assorted plans and offers prescription drug coverage. The annual limit is $75,000 with a lifetime maximum of $750,000. There is an annual deductible of $500 and a co-payment and a maximum out-of-pocket of $2,500 per year.
The program may have a waiting list for applicants seeking to enroll. More information can be obtained by calling the California MRMIP at (800) 289-6574 or online at www.mrmib.ca.gov/.
Medi-Cal is coverage for Californians who meet the same disability standards as Social Security recipients and who meet financial guidelines. Medi-Cal will pay health care bills incurred up to three months prior to the application date. Here are three examples how you may become eligible for this program.
Supplemental Security Income (SSI)-linked Medi-Cal is automatic medical coverage you receive once you qualify for $1 or more of SSI income.
Aged and Disabled Medi-Cal is medical coverage you can apply for when your disability income (unearned income) is above SSI limits but below maximum limits set by the state.
Medically Needy Medi-Cal is medical coverage you can apply for when your disability income is above SSI limits and Aged and Disabled limits. It may require a monthly co-payment called "share of cost"if your disability income (unearned income) is above certain limits.
To apply for Aged and Disabled or Medically Needy Medi-Cal, contact the county Medical Office in your county Department of Human or Social Services. You're allowed up to $2,000 in assets. Your home and a car valued at no greater than $4,000 (unless used for medical appointments) are exempt for the assets.
A disadvantage of Medi-Cal is that not all doctors accept new Medi-Cal patients. There also may be certain limitations on coverage. If you have private insurance at the time you become disabled, you may be able to enroll in the Medi-Cal/HIPP program (see below), which helps pay for the continuation of your private insurance while on Medi-Cal.
The Medi-Cal Health Insurance Premium Payment Program (Medi-Cal/HIPP) will pay the premiums for your private health insurance plan. To participate, you must be eligible and enrolled in Medi-Cal, but not in any of the Medi-Cal HMO programs or MRMIP. You also must be insured under a private health insurance plan that does not exclude your serious medical condition.
If you're eligible, Medi-Cal/HIPP allows you to keep your private health insurance while on Medi-Cal. Unlike Medi-Cal, Medi-Cal/HIPP won't make retroactive payments. To apply for Medi-Cal/HIPP, call the Medi-Cal/HIPP office at (800) 952-5294.
Medicare provides health coverage for those who qualify for Social Security. Most people become eligible at age 65, or if they have been disabled for 29 months (See section on Social Security). Medicare covers hospitalization, skilled nursing, home health and hospice care, but requires certain deductibles, premiums and co-payments.
If you're receiving outpatient care, Medicare covers 80 percent of allowable outpatient medical services after a $100 deductible. You are responsible for 20 percent of the charge, regardless of the cost. Note that Medicare doesn't cover outpatient prescription drugs unless they're administered in a doctor’s office or an outpatient clinic. Because of this, many patients choose to enroll in Medicare HMOs or to buy relatively inexpensive private health insurance supplements to reduce their out-of-pocket costs.
If you can't afford private health insurance, you might be able to supplement your Medicare with Medi-Cal. More information about Medicare is available from HICAP (See below).
HICAP provides information to seniors and other people on Medicare. HICAP counselors help you understand Medicare, compare private Medicare supplemental plans, review Medicare HMOs, develop a system to organize your doctor and hospital bills, file Medicare and private insurance claims and prepare Medicare appeals or challenge claim denials. All HICAP services are free. To speak to a HICAP counselor, call (800) 434-0222.
If you or your medical provider is told that a particular procedure is not covered, you can appeal the decision or ask your doctor or hospital to repeat the request for an authorization. If you think your insurance company is treating you unjustly, hiring a lawyer may lead to a quick reversal of the rejection without any need for litigation.
If you have trouble paying your medical bills, speak to a social worker or to the practice manager to inquire about assistance. Staff at the UCSF Cancer Resource Center also may know of services that can help reduce your financial burden. These services include pharmaceutical companies that provide low-cost and free drugs to low-income patients, reduced utility rates for low-income patients and coverage for certain transportation services.
The State of California administers the State Disability Insurance (SDI) program. This is a 52-week program, which issues payments every two weeks. You pay your premium for this program through your employer, unless your employer has opted out and has another plan. To be eligible, you must have contributed to SDI via a California employer for at least 12 months for the full 52-week benefit.
The Social Security Administration (SSA) oversees two programs that pay disability income benefits to individuals who are legal U.S. and California residents, SSDI and SSI. The programs are:
Social Security Disability Insurance (SSDI) — SSDI provides a benefit based on an individual's Federal Insurance Contributions Act (FICA) contributions. The program requires that you pay into Social Security for at least 20 of the last 40 quarters (five of the last 10 years) if you're age 31 or older. SSDI requires a full and unpaid five-month waiting period. Eligibility begins in the sixth month and payment is received at the beginning of the seventh month to cover the previous month. This program has no asset limits and is solely based on contributions to FICA and medical eligibility.
Supplemental Security Income (SSI) — SSI provides a minimum monthly income for those without other resources. To receive SSI, you must apply for other disability benefits if eligible, such as SDI and SSDI. Your assets must add up to $2,000 or less and may include a home as long as you live in it and a car as long as it is valued at or below $4,500. The value of the car can be above $4,500 if you use it to get to and from your medical appointments. You should apply for SSI immediately after becoming disabled to establish an "onset date."
Social Security’s Definition of Disability is a physical or emotional impairment that is severe enough to keep a person from working for a continuous period of not less than 12 months or that is expected to result in death. To apply for disability benefits, contact Social Security at (800) 772-1213 or visit www.ssa.gov to find a local office.
Private benefits can include Short Term Disability Insurance (STD) that pays a benefit for usually up to one year or Long Term Disability Insurance (LTD) that pays a benefit for several years or until retirement age. These may be provided by an employer automatically or offered to employees on a voluntary basis.
Individual policies exist, but are difficult to obtain if there is a pre-existing condition in the past 10 years.
Short-term disability (STD) provides insurance for short-term salary continuance because of disability. This can provide a gross benefit of 40 percent to 100 percent of gross pre-disability salary (income prior to disability) or a flat dollar amount. Gross STD benefit minus SDI, SSDI or sick leave equals the net STD benefit.
Long-term disability (LTD) provides insurance for long-term salary continuance because of disability. This can provide a gross benefit of 40 percent to 70 percent of gross pre-disability salary (income prior to disability) or a flat dollar amount. Gross LTD benefits minus SDI, SSDI or sick leave equal the net STD benefit.
The Americans with Disabilities Act and Federal Rehabilitation Act prohibit certain types of job discrimination by employers against people who have or have had cancer.
If you're undergoing treatment for cancer or recovering from cancer, federal law requires an employer to provide you with reasonable accommodation such as a change in work hours or duties. The employer is required to provide you with reasonable accommodation only after being informed of your condition.
The Family and Medical Leave Act requires an employer with 50 or more employees in a 75-mile radius to provide up to 12 weeks of unpaid job-protected leave for family members who need time off to address their own serious illness or to care for a seriously ill child, parent or spouse.
Typically, life insurance policies are used to benefit an individual's designated beneficiary when the policyholder dies. Recent laws, however, have made it possible for individuals with a catastrophic or terminal illness to sell their life insurance policies while they're alive. This process, called viatication, enables individuals with terminal disease to access a source of money while still alive.
Many people use the money from the sale of life insurance policies to pay for medical treatment or other bills. Companies offering viatication services typically pay between 35 percent and 85 percent of the face value of the policy. If you're considering viatication and have a life insurance policy through your employer, it is important to make provisions for the continuation of the policy once you stop working so you have the option of viatication in the future.
Since you'll receive only a percentage of the face value of your life insurance policy, you should consider this option carefully. Another option is to ask your insurer if it offers an accelerated benefits program.
Reviewed by health care specialists at UCSF Medical Center.
This information is for educational purposes only and is not intended to replace the advice of your doctor or health care provider. We encourage you to discuss with your doctor any questions or concerns you may have.