Health Care Coverage Basics

One of the main reasons I started this blog was because of the desperate cries of people lost in the health care system. Most people are unaware of what options are available or where to seek assistance.

There are a lot of resources out there to help you understand the health care system. But you need to take stock in what you have and what you need. I will try to address some of the main concerns in this and subsequent blogs.

Basics on Health Care coverage

Health insurance is insurance that pays for all or part of a person's health care bills. The purpose of health insurance is to help people cover their health care costs. Health care costs include doctor visits, hospital stays, surgery, procedures, tests, home care, and other treatments and services.

There are three basic plans available to cover the costs of health care:

Private Health Insurance- coverage by a health plan provided through an employer or union or purchased by an individual from a private health insurance company. ex. Blue Cross/Blue Shield, United Health Care, or Aetna.

Government Health Insurance- plans funded by the federal, state, or local government ex. Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP), military health care, state plans, and the Indian Health Service.

Worker’s Compensation Insurance- Insurance that covers medical and rehabilitation costs and lost wages for employees injured at work; required by law in all states.

Private Health Insurance
Many employers offer group health plans to employees and their dependents as a benefit of working with that particular employer (medical benefits). The employer may pay for part or all of the insurance cost (premium).Group and individual plans can be further classified as either fee-for-service or managed care.

Fee-for-service is traditional health insurance in which the insurance company reimburses the doctor, hospital, or other health care provider for all or part of the fees charged. Fee-for-service plans may be offered to groups or individuals. This type of plan gives people the highest level of freedom to choose a doctor, hospital, or other health care provider. A person may be able to receive medical care anywhere in the United States and, often, in the world.

Managed care plans are also sold to both groups and individuals. In these plans a person's health care is managed by the insurance company. Approvals are needed for some services, including visits to specialist doctors, medical tests, or surgical procedures. In order for people to receive the highest level of coverage they must obtain services from the doctors, hospitals, labs, imaging centers, and other providers affiliated with their managed care plan.

Types of Health Care Plans

Health Maintenance Organization (HMO)
An HMO is a type of managed care called a prepaid plan. This type of coverage was designed initially to help keep people healthy by covering the cost of preventive care, such as medical checkups. The patient selects a primary care doctor from a list of physicians participating in the HMO program. This doctor coordinates the patient's care and determines if referrals to specialist doctors are needed. People pay a premium, usually every month, and receive their health care services (doctor visits, hospital care, lab work, emergency services, etc.) when they pay a small fee called a co-payment. The HMO has arrangements with caregivers and hospitals and the co-payment only applies to those caregivers and facilities affiliated with the HMO. This type of coverage offers less freedom than fee-for-service, but out-of-pocket health care costs are generally lower and more predictable. A person's out-of-pocket costs will be much higher if he or she receives care outside of the HMO unless prior approval from the HMO is received.

Preferred Provider Organization (PPO)
A PPO combines the benefits of fee-for-service with the features of an HMO. If patients use health care providers (doctors, hospitals, etc.) who are part of the PPO network, they will receive coverage for most of their bills after a deductible and, perhaps a co-payment, is met. Some PPOs require people to choose a primary care physician who will coordinate care and arrange referrals to specialists when needed. Other PPOs allow patients to choose specialists on their own. A PPO may offer lower levels of coverage for care given by doctors and other professionals not affiliated with the PPO. In these cases the patient may have to fill out claim forms to receive coverage.

Point-of-Service Plans (POS)
Many HMOs offer an indemnity-type option known as a POS plan. The primary care doctors in a POS plan usually make referrals to other providers in the plan. But in a POS plan, members can refer themselves outside the plan and still get some coverage. If the doctor makes a referral out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay coinsurance.

Government Health Plans
Medicare and Medicaid are the two main health plans offered by the U.S. government. They are available to individuals who meet certain age, income, or disability criteria. TRICARE Standard, formerly called CHAMPUS, is the health plan for U.S. military personnel.

Medicare
Medicare was created in 1965 under Title 18 of the Social Security Act and is available to people who are 65 years or older , or younger individuals who have disabilities or end-stage renal disease (permanent kidney failure)
Medicare is divided into four parts.
Part A is hospital insurance and helps cover the costs of inpatient hospital stays, skilled nursing centers, home health services, and hospice care.
Part B helps cover medical services such as doctors' bills, ambulances, outpatient therapy, and a host of other services, supplies, and equipment that Part A does not cover.
Part C provides the option to choose from a package of health care plans
Part D helps provide coverage for medication.

Enrolled individuals must pay deductibles and co-payments, but much of their medical costs are covered by the program. Medicare is less comprehensive than some other health care programs, but it is an important source of post-retirement health care.

Medicaid
Medicaid was created in 1965 under Title 19 of the Social Security Act and is a federally funded state run program of public assistance for persons regardless of age whose income and resources are insufficient to pay for health care.
This program covers hospitalization, doctors' visits, lab tests, and x rays. Some other services may be partially covered.

State Children’s Health Insurance Program Summary (SCHIP)
The State Children's Health Insurance Program was created as part of the Balanced Budget Act of 1997 title XXI, to address the growing problem of children without health insurance. SCHIP was designed as a Federal/State partnership, similar to Medicaid, with the goal of expanding health insurance to children whose families earn too much money to be eligible for Medicaid, but not enough money to purchase private insurance.

Tricare
Tricare is the United States military's health care plan for military personnel and their dependents. The Tricare program is managed by TRICARE Management Activity (TMA) under the authority of the Office of the Assistant Secretary of Defense for Health Affairs (OSD/HA). Eligible military families may enroll in Tricare Prime, which is an HMO; Tricare Extra, which offers an expanded choice of providers; or Tricare Standard, which is the new name for CHAMPUS.

Workers' Compensation
Workers' compensation covers health care costs only for an injury or illness related to a person's job. Medical conditions that are unrelated to work are not covered under this plan. In some cases an evaluation is done to determine whether or not the medical condition is truly related to a person's employment.

For additional information
http://www.cms.hhs.gov/default.asp?