What you need to know about health insurance

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The issue of health insurance is an important one for anyone with diabetes. Obtaining health insurance that includes hospitalization and major medical coverage is essential for any person with a serious health condition because of the lifetime requirements for a variety of medical and other health needs and the considerable cost associated with those needs. If you live in the US, where the health insurance marketplace is particularly complex, being well informed about your health insurance options will help ensure that you and your family have both the health services and financial protection that you deserve.

Understanding health insurance options

While you don’t 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.

Fee-for-service versus managed care.Traditional fee-for-service health insurance plans work by allowing policy holders to obtain 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 consumers 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 policy holders. People with managed care plans usually pay little or nothing out of pocket for services within the allowed network of providers. Health maintenance organizations (HMOs) are the most restrictive type of managed care plans. In HMO plans, policy holders are strictly limited to providers and services within a specified network. On the positive side, premiums for HMOs tend to be lower than other plans.

In today’s health insurance market, pure fee-for-service plans are rare, with most of these types of plans incorporating some of the limitations that come with the managed care approach to containing costs. Interestingly, one example of a pure fee-for-service plan is Medicare. Preferred provider organizations (PPOs) are hybrids of fee-for-service and managed care plans that account for most of the job-based group health insurance plans that exist today in the US. Another hybrid is that is available in some locations is the point of service (POS) plan.

How do I know what I’m 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. In the US, a person can get health insurance either through the government or through a private insurance company.. Many work adults get health insurance through their employer from a private insurance company. The tables shown below lay out the essentials on insurance eligibility by type of government or private plan. The tables shown below lay out the essentials on insurance eligibility by type of government or private plan.

Specific eligibility requirements for government insurance programs, which include Medicare, Medicaid, Veterans’ benefits, TRICARE, Federal Employee Health Benefits Program (FEHB), State Child Health Insurance Programs (S-CHIPs), or insurance programs for employees of state and local governments vary by program. Eligibility is determined by whether a person:

  • Qualifies for a government entitlement program, including Medicare or Medicaid
  • Was or is a employed by an agency of government, including the military
  • Is a family member someone works or worked for government, who was eligible for such an insurance program

The main types of private health insurance plans include group coverage as a benefit of employment or membership in a union or other organization, individual plans, high-risk health insurance pools, and Medicare supplemental insurance (sometimes referred to as Medigap).

Government Insurance Programs

Medicare
  • 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
  • People younger than 65 years who are disabled
Medicaid
  • Medical assistance entitlement program for people and families with low income, with benefits varying from state to state
  • Provides coverage for a variety of long-term care services, including stays in nursing homes
  • ACA reforms may expand eligibility
S-CHIP
  • Coverage for children in families that do not qualify for Medicaid
VA Benefits
  • Comprehensive healthcare to veterans with service-related disabilities
TRICARE
  • 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
FEHB
  • 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
State and local government employee plans
  • Health benefit plans for employees and eligible family members

*Must meet Social Security Disability Insurance or SSDI criteria. A 24-month waiting period is required before

coverage begins.

Private Health Insurance

Group health plans
  • 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*
Individual and family plans
  • Purchased by individuals to cover themselves and their families
  • With ACA, these types of plans can not be denied to someone on the basis of a pre-existing condition and must be made affordable
Medigap
  • Supplemental insurance that can be purchased to pay costs not covered by Medicare
State high-risk pools
  • Coverage for state residents who are uncover able due to a pre-existing condition
  • Will be discontinued over time as ACA is phased-in and provides coverage for all patients with pre-existing conditions
COBRA
  • 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.

*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 member of the plan.

Diabetes and the ACA

As you may know, the ACA (the full name is the Patient Protection and Affordable Care Act) became federal law in 2010. Many of the changes and benefits of the ACA have been phased in, making significant changes to the health insurance system and the federal and state laws and regulations that affect that system.

How will the Affordable Care Act affect me if I have diabetes?
If you have diabetes, it is important to get the facts about what the ACA means to you. Two important things that the legislation does that will affect people with diabetes directly are to:

  • End the annual and lifetime caps for health services that many insurance plans have
  • Eliminate the ability of insurance providers to exclude people due to pre-existing conditions

The US Department of Health and Human Services provides a website with the latest information on how the ACA may affect you: www.healthcare.gov

The website for the ACA provides several useful tools, including the complete text of the ACA, highlights of the key features of the ACA, information on how the law is being implemented on a state-by-state basis, and a list of resources for finding out more about the ACA and getting your questions answered. Included among the key questions you can get answers to are:

  • What is the health insurance marketplace?
  • What is the marketplace in my state?
  • What if I have job-based insurance?
  • How can I get coverage at lower costs?
  • Am I eligible for Medicaid?
  • What if I have a pre-existing condition?
  • How does the healthcare law protect me?

The ACA will require 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.

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