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Frequently Asked Questions
Individual & Family Health

What are Indemnity Health Insurance plans?
 These are major medical plans that usually have a deductible and possibly co-insurance but cover both doctor visits and hospitalization.

What is a deductible?
This is the amount you pay before the insurance company begins paying benefits. 

What is meant by "co-insurance" in my insurance plan?
This typically refers to the amount or percent you and the insurance company share of the covered expenses after you have met the plan's deductible. For example, an 80/20 coinsurance: the insurance company pays 80% of the eligible expenses and you must pay the remaining 20%.

What is meant by the term "Out of Pocket Maximum (OPM)," in my health insurance plan? 
This is the maximum amount of eligible expenses that you must satisfy or pay out of your own pocket (Ex: $5000 per individual & $10,000 per family).  After this amount is satisfied, most insurance companies pay 100% of eligible expenses occurred in the remainder of the calendar year.  Be aware, some plans may have "plan years" instead of using the calendar year. Also some plans include the deductible in the OPM figure they state and others do not.

What are Health Maintenance Organization (HMO) plans?
These major medical plans usually require the insured to choose a primary care physician (PCP) from a list of network providers. In such chases your PCP acts as a "gate keeper" and is responsible for managing all of your health care. You may have to get a referral from your PCP to see a specialist or other provider. 
Some HMO plans have dropped this requirement and thus resemble PPO plans more than previously, but may have an entirely different network of providers than the companies PPO plan.
The insured person must receive care from a network provider in order to have the claim paid through the HMO. Treatment received outside the network is usually not covered, unless an emergency or is covered at a significantly reduced level.

What are Preferred Provider Organization (PPO) health plans?
In these major medical plans, the insurance company enters into contracts with selected hospitals and doctors to furnish services at a discounted rate. As a member of a PPO, you may be able to seek care from a doctor or hospital that is not a preferred provider, but you will probably have to pay a higher deductible or co-payment.You may also be fully responsible for any charges the out of network provider bills over and above the carrier's in-network negotiated payments.

What are Point of Service (POS) health plans? 
These are major medical plans, usually using the HMO's list of providers but providing some out-of-network benefits.  These resemble a combination of PPO and HMO models. They are more flexible than HMO plans. 

What are Health Savings Accounts (HSA) and High Deductible Health Plans (HDHP) or CDHC?
A Health Savings Account alone is not health insurance. It is a savings plan from which consumers can pay for their health care. HSAs enable you to pay for current health expenses and  future qualified medical expenses from the accumulated funds in your HSA, on a tax-free basis. High deductible insurance plans ($1150 minimum 2009) are used to accompany HSA accounts to cover expenses after the deductible is met. 
Health Savings Accounts (HSAs) were signed into law by President Bush on December 8, 2003. 


What is required to open an HSA?

A High Deductible Health Plan (HDHP) is required to open an HSA. You might refer to the HDHP, as a 'catastrophic' health insurance plan.  An HDHP is a less expensive health insurance plan that does not pay for the first several thousand dollars or more of health care expenses after which expenses may be covered at 100% or 80%, down to much lower percentages, depending upon what you choose when purchasing the HDHP. Maximum and minimum deductible requirements for the individual and family are determined by government regulations.  Drugs are generally subject to the deductible in these plans. There must also be an administrator of the funds, typically a special company specializing in this type of business, for which they charge a small fee.


Is an HSA Plan right for me or my family? 

These are great plans for folks with funds set aside to help in case of expenses occurring before the HSA is properly funded.  Also good if you are fairly health, not taking expensive drugs or needing a lot of medical attention. If this does not sound like your personal situation, then a more traditional plan may be a better fit.


What is the maximum Out-of-Pocket allowed for an HSA plan?

For 2009, the maximum annual out-of-pocket amounts for an HSA individual coverage is $5,800 and the maximum annual out-of-pocket amount for family coverage is $11,600.


What is the minimum or lowest deductible if I have an HSA-Compatible HDHP?

For 2009, the minimum deductible for HDHPs increases to $1,150 for self-only coverage and $2,300 for family coverage.

How do I know which health insurance company is best for me? 

If keeping your current doctors is most important, we suggest you check with your doctors for a list of which insurance companies they participate. If you do not currently have a doctor you might look on company websites and choose one with a good number of participating doctors and hospitals in your area. If the company is a stock for profit company choose one with an AM Best rating of "A" or better.


Which plan is best for me, an HMO or PPO?

If your doctor participates with both plans, your decision might rest on your desire for lower premiums and less out of pocket or "cost sharing" (your share of medical expenses) if so choose an HMO. Most HMO plans do require you to choose a Primary Care Provider (PCP) and may require you to get a referral from your PCP before seeing a specialist in the network.  Most HMO plans provide only emergency benefits outside of their own network of providers.  PPO (Preferred Provider Organization) plans may have  higher premiums but do allow more freedom of choice, covering services sought from providers in the network and also out of network at a lower benefit. Referrals are not required by the plan for you to see any doctor in the network list of providers.


How is the premium determined for my health plan?

Geographical location and demographics such as age or perhaps gender, determine part of the premium.  If you live in a state that is not "guarantee issue" and choose a medically underwritten plan then your medical condition will also affect your rate. Most new business plan rates will be rated up if you or others covered on the plan are being treated for costly medical conditions.  Your claims experience or that of an entire group or area may affect your renewal rates too.


Why do my health insurance premiums go up even though I have had few claims?

Insurance company overhead and administrative cost plus lower profits from insurance company investments. Largely, medical inflation (cost of medical products and services) itself has continued at a much higher, often double digit, rate over the last several years. While you were fortunate and had no claims, others have experienced natural disasters causing physical and mental medical claims, national epidemics of flu and contagious diseases combined with other natural causes of illness and accidents. Unhealthy life styles and eating habits do not help.  World class medical equipment, facilities and treatments provide Americans with world class medicine but it cost and though measures are being sought to contain cost it has continued to rise.


How many participants are required to have group health insurance?

For most states and insurance companies the number enrolled must be two. Some do allow a husband and wife both working for the same company to each enroll and thus qualify as two participants.


What are the requirements to have a group plan other than the number of persons seeking coverage?

There usually must be a common sponsor and premium collector with common participants, such as an employer and employees or association and its members. All participants are covered under or have an option to choose the same benefits plan or plans. Covered benefits within the plan are the same for all enrolled and usually can not be elected or deleted individually. (Example, maternity might be on the plan and you could not elect to remove it in order to lower your premium.) Most group plans require at least 2 eligible, enrolling persons.


What is meant by Individual Health Insurance?

These are personal health plans designed for you or you as a self employed person to include your family for which you are personally responsible for the premium, as opposed to employer sponsored or paid insurance plans referred to as group health plans.

 
What are Basic or Limited Benefit Health Plans? 

Economical premium plans some provide essential protection against catastrophic medical expenses while others, often called Limited Benefits or Mini-Med Plans, provide benefits upfront for claims but only to a limited amount or only for certain covered expenses. It is critical to thoroughly read the details of benefits of any plan chosen but especially these plans.  


What is meant by Comprehensive Coverage Plans?

Broad coverage usually for doctor visits and hospitalization, covering both basic, upfront and catastrophic needs. Many such plans include wellness benefits, emergency care and prescriptions. You might have a copay (usually $10 to $50 per visit), Deductible (your "first dollar" expenses before most other benefits begin, typically $100 to $1000 or higher if an HSA plan), Co-insurance (percent of expenses shared between you and the insurance company up to a maximum dollar amount, example 80/20 -80% insurance company share, 20% your share).


Is there an advantage to having group insurance over an individual plan?

It depends of the plan and the insurance company, but generally speaking the benefits are richer in group plans compared to similar available individual plans. Often maternity coverage, for example, is not available, limited or is very expensive with individual coverage.  This is also often the case for drug benefits, mental health benefits and many others. 


How might HIPAA (Health Insurance Portability & Accountability Act) help me when applying for an individual health plan?

If you previously were covered under a group plan this regulation gives you the right to apply to the individual health plan of your choice in your state. You cannot be denied and pre-existing conditions must be covered depending upon how long you were covered under your prior plan. Premiums for HIPAA plans are usually considerable more costly, so if you are healthy, consider asking to apply for an underwritten policy.



 

 


Frequently Asked Questions :: Glossary of Common Terms

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