Type 2 Diabetes and Health Insurance
Health insurance is an important issue for anyone with diabetes. Finding health insurance that includes hospitalization and major medical coverage is essential for any person with a serious health condition like type 2 diabetes. On average, people who have been diagnosed with diabetes have medical costs that are about 2.3 times higher than what their costs would be without diabetes.1
For the most part, type 2 diabetes is a self-managed condition. However, people with diabetes need supplies like test strips and insulin to monitor their blood sugar and stay healthy. In the past, it was often difficult for people with diabetes to obtain health insurance. However, since 2014, all new health insurance plans cannot deny coverage, charge more, or refuse to cover treatments because you or someone in your family has diabetes.2
If you live in the United States, where the health insurance marketplace is particularly complex and expensive, being well informed about your health insurance options will help ensure that you and your family have both the health services and financial protection you need.
Understanding health insurance options
While you do not need to be an expert when it comes to insurance, a basic understanding of some key concepts and terms will come in handy as you consider your health insurance options.
Traditional fee-for-service health insurance plans: work by allowing policyholders to get and pay for health services of their choice and get reimbursement by their policy provider according to the specific terms of their policy. One element of fee-for-service plans that appeals to many people is that they allow you to choose your own provider.
Managed care health insurance plans: contract with a specific network of health providers (doctors, hospitals, pharmacies, etc.) that provide services to policyholders. People with managed care plans usually pay little or nothing out of pocket for services within the allowed network of providers. The 3 most common types of managed care plans include:
- Health maintenance organizations
- Preferred provider organizations
- Point of services plans
What are health maintenance organizations?
Health maintenance organizations (HMOs) are the most restrictive type of managed care plans. With HMOs, policyholders are limited to providers and services within their specified network. People need referrals from their primary care physician (PCP) to see specialists like an endocrinologist. While they have more restrictions, HMO premiums are often lower than other types of plans.
What are preferred provider organizations?
Preferred provider organizations (PPOs) are another lower-cost option for obtaining care through a network of providers who have contracted with the health insurance company to offer discounted rates to policyholders. People are able to choose any healthcare provider, including specialists, without needing a referral. However, if you choose to receive care from an out-of-network provider, you must then pay for a bigger portion of the costs. PPOs account for most of the job-based group health insurance plans that currently exist in the United States.
What are point of service plans?
Point of service (POS) plans take a hybrid approach by combining fee-for-service, HMO, and PPO plans. POS policyholders can choose which providers they want to see and are not limited to a specific network.
How do I know what I am eligible for?
In the past, eligibility rules for health insurance plans were typically based on eligibility criteria or rules made by the sponsor of the plan spelling out who qualified for a specific plan. With the Affordable Care Act (ACA), eligibility rules have undergone significant changes. The table below explains the basics of insurance eligibility by type of government or private plan. Eligibility for government insurance programs or insurance programs for employees of federal, state, or local government branches vary by program.
Eligibility is determined by whether a person:2
- Qualifies for a government entitlement program, such as Medicare or Medicaid
- Is or was employed by a government agency, including the U.S. military
- Is a family member of someone who works or worked for a government agency and is/was eligible for such an insurance program
Many private health insurance plans include groups coverage as a benefit of:
- Membership in a union or other organization
- Individual plans
- High-risk health insurance pools
- Medicare supplemental insurance (Medigap plans)
Government Insurance Programs
- Medical assistance entitlement program for people and families with low income, with benefits varying from state to state3
- Provides coverage for a variety of long-term care services, including stays in nursing homes
- Coverage for children in families that do not qualify for Medicaid
- Source of coverage for most people 65 years or older
- Medicare Parts A, B, C, and D, there are several options available for organizing and accessing care, including prescriptions, so it is important to get advice about Medicare options if you are eligible
- Medicare Part B covers diabetes screenings, self-management training and nutrition services, glucose testing supplies, and insulin pumps and supplies4
- Medicare Part D covers many prescription drugs, including insulin, insulin pens, and syringes4
- People younger than 65 years who are disabled (including those with CF) may qualify*
*Must meet Social Security Disability Insurance or SSDI criteria. A 24-month waiting period is required before coverage begins.
- Health benefit program for active duty and family, reserves (under certain conditions), retired military and family
- Offers both fee-for-service and managed care plans
- Choice of health plans for federal, non-military employees and eligible family members
- Available from date of enrollment without restrictions
- May continue (under certain conditions) for employee and/or eligible family members beyond retirement and death of employee
- Health benefit plans for employees and eligible family members
Private Health Insurance
- Offered to employees and often to family members
- Choice of different plans typically offered
- ACA offers employers an incentive to provide insurance to employees and penalizes large employers who do not
- Can be either fully insured or self-insured*
*It is important to find out which type applies to you and what it means for your coverage. Unlike fully insured plans, self-insured plans are not regulated on a state level and this may affect you if there is a dispute concerning your legal rights as a member of the plan.
- Purchased by individuals to cover themselves and their families
- With ACA, these types of plans cannot be denied to someone on the basis of a pre-existing condition
- Supplemental insurance that can be purchased to pay costs not covered by Medicare
- Largely made obsolete by the ACA, covered state residents who are uninsurable due to a pre-existing condition
- Most states have closed their pools to new enrollees or shut down the program altogether since the ACA mandates that pre-existing conditions be covered by insurance5
- Temporary extension of coverage for people who lose employment-group health coverage through loss of employment, divorce, retirement, death of spouse, disability, or Medicare enrollment of spouse
- COBRA refers to the health benefit provisions from the Consolidated Omnibus Budget Reconciliation Act of 1985.
What is the Affordable Care Act?
The Patient Protection and Affordable Care Act (ACA) became federal law in 2010. Many of the changes and benefits of the ACA have been phased in, resulting in significant changes to the health insurance system and the federal and state laws that affect that system. It is uncertain whether the federal government will dismantle the ACA or dramatically change it.
How does the Affordable Care Act affect people with diabetes?
If you have diabetes, it is important to get the facts about what the ACA means to you now, along with what it may mean to you in the future. The U.S. Centers for Medicare & Medicaid offers a website with the latest information on how the ACA may apply to you. The site offers several tools for finding coverage, how to use your coverage, information on costs and savings, and details on enrollment dates.6
The ACA requires that plans cover a number of services of special importance to people with chronic diseases like diabetes. These include outpatient care, wellness services, substance abuse and mental health services, prescription drugs, lab fees, and services for management of chronic diseases.