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.¹

The importance of health insurance for those with type 2 diabetes

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. On average, people who have been diagnosed with diabetes have medical costs totaling about 2.6 times what their costs would be without diabetes.^1,2

In the past, it was often hard for people with diabetes to get health insurance. But now, new health insurance plans cannot deny coverage, charge more, or refuse to cover treatments because you or someone in your family has diabetes.²

The health insurance marketplace is particularly complex and expensive in the United States. If you are the policyholder, it is important to be well-informed about your health insurance options. This will help ensure that you and your family have the health services and financial protection you need.

Understanding health insurance options

You do not need to be an expert when it comes to insurance. But a basic understanding of some key concepts and terms will come in handy as you consider your health insurance options.

Fee-for-service health insurance plans (non-PPOs)

A fee-for-service (FFS) plan is a type of health insurance that lets you visit any doctor or hospital, but you pay a fee for each service. The plan reimburses only part of the cost. So, you may have higher out-of-pocket expenses than you would with other plans. Some FFS plans include networks that offer discounts if you use preferred providers.³

Managed care health insurance plans

This is a contract with a specific network of health providers. The network may include doctors, hospitals, pharmacies, and other service providers. People with managed care plans usually pay little or nothing out of pocket for care they get from providers inside the allowed network.^2,4

The most common types of managed care plans include:^3-5

• Health maintenance organizations (HMOs) – Require you to use doctors in the plan's network. You need a referral from your primary care physician (PCP) to see a specialist like an endocrinologist, cardiologist, or podiatrist. While they have more restrictions, HMO premiums are often lower than those of other types of plans.
• Preferred provider organizations (PPOs) – Lets you use doctors in and out of the plan’s network. But services cost less if you stay in the network. No referrals are needed for specialists. PPOs account for most of the job-based group health insurance plans in the United States.
• Exclusive provider organizations (EPOs) – Covers only in-network care (except emergencies). There is no need for referrals.
• Point-of-services plans (POSs) – Combines parts of fee-for-service, HMO, and PPO plans. With a POS, you can choose which providers you want to see and are not limited to a specific network.
• COBRA – Temporary extension of coverage for people who lose job-based health coverage. The loss of coverage may be due to loss of employment, divorce, retirement, death of a spouse, disability, or Medicare enrollment of a spouse.

Government insurance programs

There are several types of government insurance programs. Eligibility for government insurance programs, as well as insurance programs for government employees, varies by program.^6-10

Government insurance programs include:^6-10

• Medicaid – Medical assistance program for people and families with low income. Benefits vary from state to state. Medicaid provides coverage for a variety of long-term care services, including stays in nursing homes. Medicaid is provided by the state you live in. Some states will contract out private companies to provide Medicaid benefits.
• S-CHIP – Coverage for children in families that do not qualify for Medicaid.
• Medicare – A source of coverage for most people who are 65 years or older. Some people with disabilities or certain conditions who are 64 years or younger may also qualify for Medicare. Medicare is provided by the federal government. Medicare benefits may be administered in different parts or can be combined under a single plan. Some people may receive some or all of their Medicare benefits through a private company.
• Medigap – Supplemental insurance that can be purchased to pay costs not covered by Medicare Parts A and B. Medigap plans sold after 2005 do not include drug coverage. These plans are sold by private companies.
• TRICARE – A health benefits program for people on active military duty and their families, those in the reserves (under certain conditions), and retired military and family. TRICARE offers both FFS and managed care plans.
• Federal Employees Health Benefits Program (FEHB) – Choice of health plans for federal, non-military employees and eligible family members. It is available from the date of enrollment without restrictions. Coverage may continue (under certain conditions) for the employee and/or eligible family members beyond the retirement and death of the employee. FEHB plans are typically serviced by a private company.

How do I know what I am eligible for?

In the past, eligibility for health insurance plans was typically based on rules made by the sponsor of the plan. These rules spelled out who qualified for a specific plan. With the Affordable Care Act (ACA), eligibility rules have undergone big changes.^2-4

Now, eligibility is determined by whether a person:^2-4

• Qualifies for a government entitlement program, such as Medicare or Medicaid
• Is or was employed by a government agency, including the US 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 group coverage as a benefit of:^2-4

• Employment
• Membership in a union or other organization
• Individual plans
• High-risk health insurance pools
• Medicare supplemental insurance (Medigap plans)

What is the Affordable Care Act?

The Patient Protection and Affordable Care Act (ACA) became federal law in the US in 2010. It has resulted 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 change or discontinue the ACA in the future.¹¹

How does the Affordable Care Act affect people with diabetes?

The ACA requires that plans cover a number of services of special importance to people with chronic diseases like diabetes. These include:¹¹

• Outpatient care
• Wellness services
• Substance abuse and mental health services
• Prescription drugs
• Lab fees
• Services for the management of chronic diseases

The US Centers for Medicare and Medicaid offer a website with the latest information on how the ACA may apply to you. The site has several tools to help you find coverage, learn how to use your coverage, find costs and savings, and get details on enrollment dates.¹²