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Buying health insurance is like learning a language

Also, a financial transaction; every drop of expenditure is important.

By Dr. Harpal S Mangat

Dr.Harpal
Dr. Harpal Mangat

WASHINGTON, DC: Deciding which health insurance to get for yourself and the family can be a very confusing experience whether you are choosing from your employer health plans or deciding which plan to get for your employees.

Below are some basic concepts and analogies that I have counseled many of my patients over the years. By no means is it complete but will help in deciding what is best for you. Often I have seen brokers selling plans that do not suit the end customer, and when my staff  pull out the explanation of benefits, I see shock in the eyes of my patients when they realize what is not covered.

Buying insurance is like learning a language, there is essential vocabulary, rules of grammar and regional variations of the same words, and the spoken language or articulation. Those growing up speaking a language find it easy, but those who have to learn another language in their teen years have a tougher time.

Essential Vocabulary

Remember words have variable meanings depending on dialect and enunciation. As I keep telling my patients American is a difficult language to learn, it is definitely different from the English I learnt as a child in London, and scope and wit is not the same as I leant as a medical student in Dublin, Ireland. So words may be different on the insurance plans that I use below, but when you look at the principles they are much the same.

Commercial Insurance:

PPO plans: these are plans that allow you to go and see any doctor without a referral provided they are in the PPO network. The cost of seeing an out of network provider is often more expensive and will be passed on to you. Please read the fine print on some of these plans. I have seen plans that limit the number of physician visits per annum.

HMO plans: These are gated plans where your primary care physician will decide whom and where you can be referred to and often requires a written or electronic referral from their office which will guarantee payment to the consulting physician. Again network rules apply as listed above.

Open Access Plans: This is a hybrid plan of the above. You can see any specialist without a referral, but for expensive procedures like an MRI you will need prior authorization (a conference call between your physician and an insurance physician where your physician has to argue with the insurance physician why a particular test or medication is required and why the insurance dated/outdated protocols do not suit your health needs). Again Network rules apply.

Medicare

Medicare is Federal Health plan for those who have paid into Social Security and comes available on your 65th birthday. However those who are disabled can become eligible for a Medicare benefit earlier.

Additional citizens of the United Kingdom, Australia and Canada under the current tax treaties can transfer their National insurance credits into the Medicare system. Medicare is comprised of two components Medicare A and Medicare B. I advise everyone to get both components and a secondary lower cost supplemental insurance. Again Network Rule applies; Medicare is in the process of enforcing these rules.

Medicare A:  This covers your hospital stays and homecare visits at a 100%. But only covers your physician bills at 80%.

Medicare B: This covers your physician office benefits at 80% , hence I suggest buying supplemental insurances. Please read the fine print as some supplemental insurance limit the number of physician visits they will pay for.

Medicaid

Medicaid is state specific, each state sets up its guidelines on who is eligible, what it will cover and what it will not cover. In Maryland where I practice, most people earning beneath $42,000 per annum and are permanent residents are allowed to receive the benefit. This is one way that I have secured much needed insurance for parents who look after their grandchildren as their children and their spouses seek a new life settling in America. I suggest talking with your primary care physician to find which flavor (specific plan) of Medicaid they accept.

Rules of Grammar

Buying health insurance is a financial transaction. Every drop of expenditure is important. Below are listed words which signify expenditure and need to be understood.

The terms “cost-sharing” or “out-of-pocket costs” refer to the proportion of your medical bills you will be responsible for paying when you actually receive health care. Cost-sharing never includes your monthly premium.

If you buy insurance through your state marketplace, you’ll be able to see and compare the cost-sharing structure of plans before you buy. If you get insurance through a job, the information will be on the Summary of Benefits and Coverage form.

These are the four cost-sharing terms you will see:

Deductible: The amount you pay every year before the insurance company starts paying its share of the costs. If the deductible is $2,000, then you would pay cash for the first $2,000 in health care you got each year, after which the insurance company would start kicking in. In every plan you can buy, preventive services will be covered in full even if you haven’t used up your deductible for the year. Some plans will also pay a portion of your costs for a few other services, usually doctor visits and prescription drugs, even before your deductible has been met. In general plans with higher premiums have lower deductibles, and vice versa.

Co-pay: A fixed dollar amount you pay for certain types of care. You might pay a $20 for a doctor visit and the insurance company will pick up the rest. Plans with higher premiums generally have lower copays, and vice versa. And some plans do not have copays at all. They use other methods of cost-sharing.

Co-insurance: A percentage of the cost of your medical care. For an MRI that costs $1,000 you might pay you might pay 20% ($200). Your insurance company will pay the other 80% ($800). Plans with higher premiums generally pick up a larger portion of the bill.

Out-of-pocket limit: The most cost-sharing you will ever have to pay in a year. It is the total of your deductible, copays, and coinsurance (but does not include your premiums). Once you hit this limit, the insurance company will pick up 100% of your costs for the remainder of the year. Most people never pay enough cost-sharing to hit the out-of-pocket limit but it can happen if you require a lot of costly treatment for a serious accident or illness. Plans with higher premiums generally have lower out-of-pocket limits.

When dealing with money for healthcare you must know the benefits that the IRS offers, these are in the process of change. I will write in detail about the 2014 changes and the Health Care exchanges in my next blog.

Flexible Savings Accounts (FSA) and Health Savings Accounts (HSA)

These are pre-tax dollars you can put aside to the tune $2500 per annum(http://www.irs.gov/pub/irs-pdf/p969.pdf). Employers can contribute to this account. Flexible Savings accounts have to be used up inside the calendar year otherwise you will lose it. Health Savings Account are the same but can be rolled over to the next calendar year. From a practical aspect it is easier to have this benefit on a “Benny Card” which is a credit card that can be swiped at the credit card machine in the doctor’s office.

Articulation

This refers to the spoken language. I use it to express what happens when you go to your doctor’s office. The below statements are valid if the doctor accepts your insurance, is willing to bill them and is in network. If these three essential criteria are met then the below will be accurate so please check with your doctor’s office.

On arrival a co-payment will be required as determined by the insurance, if there is an additional co-insurance payment, the doctor’s office will bill you or take that payment at the front desk depending on their procedures.

Many specialists require a referral by the physician for them to get paid by the insurance. I always tell my patients to ask the specialist to write back a letter to me. There are two reasons for this. I want to know what my specialist is thinking and how up to date they are in their profession as well as making sure the patient has understood and is compliant with what the specialist  suggestions. Lastly I want to make sure they are not doing unwarranted tests or repeating what I have done and what has been furbished to them by me.

Most insurance have already determined the cost structure of each specialist and some code them in colors of the traffic light red, amber and green. I also ask my patients about the experience they had in the physician office: did the specialist answer their questions, did the patient comprehend the recommendations, and the behavior of their office staff. I have called physicians and told them what is going on in their office and suggested they need to clean up their office staff.  Many patients have told me about the antics of my staff when I am not present.

Once the consult has been done by the physician, the claim is sent to the insurance company with the charge, the insurance company will review the claim, check the codes are correct for the contract they have with the physician and send the physician an Explanation of Benefits (EOB) with payment. In the EOB will be what the physician can charge as out of pocket costs to the patient.

The physician will eventually send you a bill for these charges:

Recently many insurances have introduced Patient Centered Medical Home Benefits (PCMH) that help primary care physicians co-ordinate health care benefits with additional resources. It is important for you to discover if you have this benefit and see if your physician is enrolled in PCMH programs.

Lastly, as a part of the Health Care Act, Accountable Care Organizations have been set up by physicians. These are initially for Medicare but many commercial and Medicaid plans are joining them. They are mandated to find better quality care at a lower cost to the consumer. Ask your physician if he is a member of an ACO. As a board member of an ACO in Maryland we are looking at ways of delivering better quality healthcare at a lower cost to the consumer.

Choosing a Health Plan

When choosing a health plan first decide:

1)      How much you are willing to pay for healthcare.

2)      Identify out of pocket expenses and understand them before committing to a plan.

3)      Talk to the physician you would like to handle your healthcare and ask him if most of his specialist take that plan. Where I live a national Insurance carrier is not taken by many specialists.

4)      If you are an employer understand the health needs of your employees and when negotiating with your insurance broker remember that he may recommend a plan where he makes more profit and may cause you to loose good employees if their needs are not met.

(Harpal S. Mangat, MD, is in Practice in Maryland. He is an Assistant Professor at Howard University College of Medicine and on the Board of Maryland Collaborative Care, an Accountable Care Organization. He submitted recommendations to his US senator that got incorporated into the 2010 Affordable Health  Care Act.   He has two issued US patents and three additional patents that have been filed.

He is a graduate of the Royal College of Surgeons Ireland, trained at Trinity College Dublin, Oxford University and London University in Family Practice and Ophthalmology. In the US he trained at University of South Florida and Mercy Hospital Philadelphia in Ophthalmology and Internal Medicine. He is the transport physician for difficult cases returning to United Arab Emirates. His interests include innovative new technologies, Diabetes, Sleep Apnea and Lyme disease as well as long distance air transport of seriously ill patients.

He sees patients at his offices in Clarksburg www.clarksburgmed.com and Frederick www.mhcfred.com)


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