Health insurance is a complicated subject. The following information is an overview of some of the terms that you might find in your health plan, in order to assist you understanding and using your health benefits, no matter what type of plan you may have. It is important that you understand what your health plan actually covers, in order to avoid surprises while seeking medical treatment. This material may also assist you when choosing and enrolling in a health plan.
Types of Private Health Insurance
While you should review your specific plan in detail in order to understand the services it covers and how it covers them, a summary of types of plans is helpful to understanding the way that claims are processed and, at times, denied.
A Health Maintenance Organization (HMO) is a type of plan in which you must choose an in-network primary care physician (PCP) to oversee your treatment and health needs. An HMO will cover care from a specific network of providers, but many kinds of care are subject to some out-of-pocket costs to you.
A Preferred Provider Organization (PPO) is similar to an HMO in that it covers treatment through a network of providers, but it allows you to receive treatment from providers outside of the insurance plan’s network. In both cases, you will likely pay some amount out-of-pocket, but a PPO will tend to cover more of the cost of care you receive from an in-network provider.
A Point-of-Service (POS) plan covers care from providers outside of your network if your PCP has made a referral. If you refer yourself outside of the network, your coverage may be denied or a higher coinsurance required.
A High Deductible Health Plan (HDHP) is a plan which includes a higher deductible as a trade-off against the monthly premium cost of the plan. With a higher deductible, you will pay for more of your care yourself each year before your coverage kicks in. These plans are better for people who do not anticipate any significant health issues in a given plan year, and who are able to pay their deductible amount out of savings.
Some HDHPs are HSA-Qualified. People who are enrolled in an HSA-Qualified HDHP are allowed to set money aside in a tax-advantaged Health Savings Account (HSA). Money in an HSA can be used to pay for certain health care expenses, which can prove a great help to consumers when they need to pay the deductible amount.
How are private health insurance plans regulated?
Some health insurance plans are what is called ‘Fully Insured’. These plans are subject to the laws and regulations of the state where they are written. When a state mandates, for example, that a health insurance plan must cover a particular treatment or procedure, fully insured plans must comply with that state mandate. You can learn more about state laws and regulations that apply to this kind of insurance here.
Some employer-sponsored health benefit plans are what is called ‘self-funded’. With a self-funded plan, the employer pays for covered claims directly out of its own capital, rather than paying a premium to an insurance company. The employer may contract with an insurance company or other administrator (sometimes called a ‘third-party administrator’) to administer the benefits for its employees and their dependents. Self-funded plans are exempt from state law and are regulated under a Federal law called the Employee Retirement Income Security Act (ERISA).
Even though self-funded plans are exempt from state law and regulation, OHA can assist you with issues you may be having with your plan whether it is self-funded or fully insured.
The Health Insurance Marketplace
Pursuant to the Affordable Care Act, Connecticut has established Access Health CT (AHCT), the insurance marketplace for Connecticut health insurance. Individuals and businesses can use AHCT to enroll in health coverage during open enrollment and any special enrollments that may be applicable.
Only plans sold through AHCT are eligible for subsidized assistance in the form of Advance Premium Tax Credits. If your household is below 400% of the Federal Poverty Level, you may be eligible for this assistance which can significantly lower your monthly premium for health insurance.
OHA is able to provide assistance with issues you may have with eligibility and enrollment in health insurance through AHCT.
Public Health Insurance Programs
Medicare is a federally-funded health benefit. Most people qualify for Medicare by turning 65 but some are eligible to enroll prior to age 65 if they meet certain conditions. Medicare is complex and your selection of a particular Medicare Part or Plan can have significant implications for your access to care.
Medicaid is a comprehensive health benefit program for individuals who qualify for it due to their income level, disability status, or other qualifications. Connecticut’s Medicaid program is called HUSKY and is managed by the Connecticut Department of Social Services. OHA can assist you with issues you may encounter enrolling in HUSKY or securing necessary benefits. HUSKY is funded through a combination of state and federal funding, and is managed as a partnership between the state and the U.S. Government.
Health Plan Features
Summary Plan Document
If you have private insurance, the terms of your coverage will be written up in something called a Summary Plan Document (SPD). The SPD is a short document, usually only a few pages, which briefly details the coverage available under your plan, including the portion of coverage that you will have to pay for yourself (your deductible, co-pays, and co-insurance, collectively referred to as your ‘cost-share’ or ‘outof-pocket share’). When selecting a plan, you should be careful to read everything, especially if you have a family plan, because many plans may list an individual deductible but then specify in the fine print that an individual deductible does not apply to a family plan.
Prescription Drug Formularies
A Formulary is a listing of the medications covered under your health plan, and how they are classified. Before you select an insurance plan, you should be sure that you know how any medications that you or a family member needs, and what the costs will be. The SPD will summarize how prescriptions are to be covered, and will frequently include several tiers of coverage, with Tier 1 being the least expensive and including many generic, rather than brand-name medications. The SPD will detail what the co-pay or co-insurance for a medication in each tier will cost you, but your plan may require that you satisfy a separate deductible before it will begin paying for those medications. Some plans have a specific deductible for the pharmaceutical benefits that must be met, rather than the plan deductible, before the plan will begin paying for drugs.
Most plans have the formulary available to view while you are making your choice, and understanding which medications you will require, and how your plan may cover them, will help you to anticipate your total costs for a particular plan. Keep in mind that the formulary may change each year so it is important to check the plan’s formulary you are using, especially when renewing your enrollment.
Finally, most plans cover a higher percentage of your care when you seek treatment from providers in the plan’s network. Some plans include no, or almost no, coverage, for non-emergency treatment received out of network. Each insurer are required to have an accurate and current list of in-network providers and hospitals available online. You should confirm with your plan that your providers and hospitals are current innetwork participants for the plan you are choosing, as well as confirming that information with your provider. Please note that networks may change throughout the coverage year so always verify that a provider or facility is in-network when seeking or scheduling treatment. Also, make a note when and who you spoke with when you verified the provider’s in-network status.