Understanding Health Insurance

How Well do You Understand Health Insurance?

A recent study evaluated how well Americans think they understand health insurance vs. how well they actually understand health insurance.

It turns out that although about three-quarters of people surveyed believe they know how to use their health insurance, only about 20 percent could correctly calculate the amount they would owe for a doctor’s visit.

In addition, many did not understand key terms like “HMO,” “PPO,” “out-of-pocket costs,”  etc.

It also turns out that people’s level of understanding varies based on things like their age, income level, education level, and frequency with which they use health care services. Not surprisingly, occasional users of health care services are the most likely to think they know more about health insurance than they actually do.

Test Your Health Insurance Knowledge

Here is a question asked in the study:  Can you figure out how much Robert would pay for an in-network doctor’s visit to have a wart removed from his foot?  The facts are:

• It is early January (meaning Robert has not yet met his deductible).
• The bill is $530 (the in-network rate for this service).
• Robert’s co-pay is $30 and his coinsurance is 20%.  His deductible is $100.  His co-pay does NOT count toward his deductible.

Is the answer:  A) $130, B) $210, or C) $236?

If you said B) $210, congratulations!  You are among the 20% who answered correctly.

Here’s how you get there:

• Subtract the deductible and co-pay from the total charge $530-$100-$30 = $400
• Compute the coinsurance: 20% of $400 = $80
• Total the deductible + co-pay + coinsurance:  $100 + $30 + $80 = $210

 Source:  American Institutes for Research

How to Choose a Health Plan —  Knowledge = Power

No matter how much you think you know, when it comes to choosing a health insurance plan, knowledge is power.  The more you understand, the better.  Here is a checklist to help you consider important factors when choosing coverage:

1	As you’re considering various plans, read each one’s summary of benefits and coverage. As you’re doing so, think about the medical services you and your family typically need and make sure those services are covered.
2	Make sure you understand the terms used in the plan’s documents. Click here for a glossary of terms. Contact us if you have any questions.
3	Carefully study the tradeoff between cost and choice. Lower premiums typically mean less choice in provider and higher out-of-pocket costs when you receive care.
4	Make sure your favorite doctors and hospitals are in-network providers for the plan you choose.   You will pay more to see a provider who is out-of-network.  Click here to read more about networks.
5	If you anticipate having major medical expenses due to a known illness or injury, make sure you choose a plan that will protect you financially. Can you afford a high deductible in the (likely) event you need care, or would it be better to pay a higher monthly premium to get a lower deductible?
6	Figure out roughly how much you or your family will incur in out-of-pocket medical expenses for the year. Consider prescription medications, chronic conditions, etc.
7	Be sure you understand what counts towards the deductible in any plan you are considering. For example, does your co-pay count towards the deductible?
8	Be sure you understand each plan’s rules for in-network vs. out-of-network coverage.  Is there a separate deductible for in-network vs. out-of-network care?  Will out-of-network care be covered?  Some plans cover it at a reduced rate, some will not cover it at all.
9	Once your coverage begins, understand all the details of how it works BEFORE you visit the doctor or other provider. If you are unsure of something, don’t be afraid to call your insurance carrier. If we helped you buy your coverage, you can also call us for information at any time.

 Source:  American Institutes for Research

Virginia Medical Plans Can Help

Health Insurance is confusing stuff!  There is a lot to know and a lot to sort through.

It costs you NOTHING to use our services, so why go it alone!   Get in touch so we can help you understand your options and choose the best coverage to meet your needs.

Open Enrollment runs from November 15, 2014 through February 15, 2015 and you can choose a new 2015 plan at any time during those dates.  For coverage effective January 1, 2015, you must enroll by December 15, 2014.  Click here for more about key dates during Open Enrollment.

Reach us by phone: 800-867-0800 or email: jkatz@vamedicalplans.com.

Thank you for your patience as we are experiencing a high volume of calls and emails.

Metal Plans Under the Affordable Care Act

The Affordable Care Act (ACA) created four new designs for health insurance policies. You may have heard policies referred to as “metal plans.”  This is because each design is named after a metal:

Bronze  |  Silver  |  Gold  |  Platinum

The four metal plans are distinguished from one another by their actuarial value.

Actuarial value (AV)  is the average amount of covered health care expenses that will be paid for by the insurance carrier.  It is also known as cost sharing.  The higher a plan’s AV, the greater the cost paid by the insurance company and the lower the out-of-pocket costs for the person covered.

Within the same insurance company, plans at the bronze level will have the lowest premiums, while plans at the platinum level will have the highest premiums.

However, it is possible, for example, for premiums charged by one company for its silver plan to be lower than the premiums charged by another company for its bronze plan.  That is why it is so important to fully understand the features of any plan you are considering.

Essential Health Benefits

All plans, regardless of their metal level, must cover ten essential health benefits.  Plans can offer additional benefits, but the basic, essential benefits must be covered.

Note, that’s not to say all of these benefits will be covered at 100%;  while certain preventive services must be covered at 100%, the portion of the expense paid by your policy for other essential services will depend upon the plan’s metal level as described above.

Here are the ten essential health benefits:

1. Ambulatory Patient Services — care you receive on a walk-in basis (e.g., doctor visits)
2. Emergency Services — care you receive at an Emergency Room
3. Hospitalization — medically necessary surgeries and other inpatient procedures
4. Maternity Care and Newborn Care
5. Mental Health Services and Substance Use Disorder Services — includes counseling and behavioral health treatment
6. Prescription Drug Coverage — prescription (but not over-the-counter) medications
7. Rehabilitative and Habilitative Services and Devices — examples are relearning to walk after a stroke (rehabilitative) or learning new skills like diabetes management (habilitative)
8. Lab Tests and Services — for example x-rays
9. Preventive and Wellness Services and Chronic Disease Management
10. Pediatric Medical Services (including both oral and vision care)

How Much Do the Metal Plans Cost?

Regardless of the metal level, health insurance premiums vary based upon:

• Your age
• Whether or not you smoke
• Where you live
• The number of people on your policy (e.g., family, individual, children, etc.)

Premiums cannot differ based on your health status or your gender.  In other words, you cannot be charged more if you have an existing medical problem, or based on your gender.

Since insurance carriers each set their own rates, it is always best to compare options available from more than one carrier.

All Health Insurance Premiums Include the Services of a Broker

That’s right.  It costs no more to use the services of a broker.  So, why not get the most for your premium dollars and let us help!   Virginia Medical Plans assists our clients in choosing the right coverage, enrolling in a plan, and handling administrative and claims issues for the life of their policy.

Call or email our office today!

• Phone:  1-800-867-0800
• Email: jkatz@vamedicalplans.com

What Types of Health Insurance are Out There?

Let Virginia Medical Plans help you make the best choice!

How will you make the best choice for your health insurance?  By understanding your options!

Here is a high-level review of the different types of health insurance plans.  The right fit is different for each individual.  So please give our office a call to discuss which type of plan may be best for you!

Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs)

Coverage is limited to a certain list of providers (called the network).  This means you can only go to a doctor, clinic, hospital, or other medical provider that is part of the plan’s network.  If you visit an out-of-network provider, you will be responsible for the full charge.

With an HMO plan, your care is coordinated through a primary care physician who must give you a referral to visit a specialist.  This is not true for EPOs.

You may be charged a co-payment for certain services.

Preferred Provider Organizations (PPOs) and Point-of-Service plans (POS)

These types of plans give you a choice of provider, but certain providers are within the plan’s preferred network.  You will pay more for service if you visit an out-of-network provider.

With a PPO, you may visit any doctor without a referral.  With a POS, you may visit any in-network doctor without a referral, but must have a referral to see someone out-of-network.

Co-payments and co-insurance are common for these plans.

High Deductible Health Plan (HDHP)

HDHPs typically allow treatment by both in-network and out-of-network providers, with the deductible for out-of-network care being higher — and tracked separately — than the deductible for in-network care.  Co-payments also will differ for in-network vs. out-of-network care.

Click here for a full description of HDHPs.  If you have a HDHP, you can use a Health Savings Account (HSA) to lower your costs.

Catastrophic Health Insurance Plan

A catastrophic health insurance plan covers essential health benefits but has a very high deductible.  It really serves as a “safety net” for a major medical event.  Premiums may be very low, but you may pay thousands of dollars before your coverage kicks in.  On the exchange, catastrophic plans are only available to people under age 30 and some with low income.

Virginia Medical Plans Can Help!

Again, this article provides only a high-level explanation of health insurance types.  There are many more details that should factor into your decision of which plan is the best choice for you.  Please give us a call!

What is a Health Savings Account (HSA)?

(This post was originally published in May, 2013 and was updated in May, 2015)

In our last post, we discussed high-deductible health plans (HDHPs).  In this post, we explain Health Savings Accounts (HSAs).

When you have insurance coverage through an HDHP you also establish a Health Savings Account — a vehicle for setting aside money to pay for medical-related costs.  The benefits of HSAs are many.  Here are some key points:

HSAs are Easy to Use

• Setting up an HSA is easy, and most provide a debit card for convenient access to the funds.
• Contributions can be made by you, your employer, or a third party.

Yearly HSA Contribution Limits are Set by the IRS:

	2014	2015	2016
HSA contribution limit (employer + employee)	Individual: $3,300 Family: $6,550	Individual:  $3,350 Family:  $6,650	Individual: $3,350 Family: $6,750

(Note: the 2016 limits were announced in April, 2015 and this post has been updated accordingly.)

HSA Funds are Used to Pay for any Medically-necessary Expense

You can pay for any medical expense — even one that is not covered by your insurance — from your HSA.  Using tax-free HSA dollars to pay for medical expenses results in considerable savings over the years. When you make a qualified medical purchase, simply keep your receipts. In the case of an audit, you will need to show proof that the money was spent only on qualified expenses:

• medical
• dental
• vision
• prescription drugs
• over-the-counter medications for which you have a physician’s prescription
• over-the-counter medical items (e.g., contact lens solution, bandages, etc.)

HSAs are Tax-advantageous

• HSA contributions are tax-free or tax-deductible
• Using tax-free money to pay for qualified medical expenses = 20-30% savings (depending on your tax bracket)!
• Interest earned on the account is tax-free
• Funds can also be invested (stocks, bonds, mutual funds, etc.) for greater growth potential

An HSA Stays with You and Can Last Forever

• You own your HSA.  It does not matter if you change jobs, move, retire, etc. — the account is yours.
• HSAs are NOT “use it or lose it”.  Money rolls from year to year and stays in the account essentially forever!

HSAs are a Great Tool for Retirement Planning

• After age 65, you may withdraw funds from an HSA penalty-free for any purpose.

HDHPs and HSAs Encourage Informed Decisions

• Since you’re paying for your own health care costs, you have more incentive to “shop around” for the best health care at the best price.  This puts you more in control and could save you money!

High-deductible health plans (HDHP) and Health Savings Accounts (HSA) are not for everyone, so give us a call to discuss whether it may be a good fit for you and your family.  And if it is, we’ll help you get set up!