Understanding and Managing Your Private Health Insurance

What is private health insurance?

A health insurance policy is a legally binding agreement. The insured person agrees to pay a monthly premium. In return, the insurance company agrees to pay some or all of the bills for covered medical care according to the rules of the policy.

Most private health insurance is through group policies, usually obtained through work. Employers, and sometimes unions, can sponsor group health plans for employees and their family members. In these plans, the employer usually pays most or all of the monthly premium.

People who don't have job-based health benefits may buy individual health insurance policies directly from an insurance company. An individual policy covers just one person (or, if it is a family policy, the policyholder's spouse and children can also be covered).

Sometimes, people may also buy health insurance through other arrangements, such as professional associations, religious groups, or other membership groups.

What are the common types of private health insurance?

If you have private health insurance, you probably have one of these types of plans:

Fee-for-service plans (indemnity): Under these policies, you choose your own doctor or hospital, and the insurance company pays a portion of your bill (for example, 80 percent). These plans are what people sometimes think of as traditional insurance.
HMO (Health Maintenance Organization): By contrast, an HMO establishes a network of doctors, hospitals and clinics that will provide you with health care. You may pay nothing or only a modest amount (for example, $20) for covered care when you see your HMO provider.
PPO (Preferred Provider Organization): A PPO is a fee-for-service plan that has a network of doctors, hospitals, and clinics, but also gives you the option to choose your own provider. You have a choice of getting care in or out of the network. The insurance will pay a greater portion of your bill if you get care in-network than if you go out of network (for example, 80 percent vs. 60 percent).
POS (Point-of-Service): A POS plan is a blend between an HMO and a PPO. The POS gives you the option of seeking care from doctors and hospitals outside of the HMO network. When you do, you will have to pay a greater share of the bill for that care.

What do you need to know about your private health insurance?

You have been diagnosed with a serious medical condition, so getting the care you need is vital. It is important to understand how your health insurance works to cover the care you need.

Here are some key questions you need to ask about your health insurance:

What does my policy cover? Read carefully through the list of services your policy covers. Look especially for the kinds of care you know you'll need (for example, prescription drugs, visits to specialists, hospital care, transplants).
What doesn't my policy cover? Be sure to read over the list of exclusions. For example, many policies exclude coverage for medical care the insurer considers experimental. Some policies exclude coverage for basic care, too, such as prescription drugs or mental health care.
Does my plan cover pre-existing conditions? It is common for many private health insurance policies to exclude coverage for care related to pre-existing conditions. If you enroll in a new policy after you have been diagnosed with a bone marrow disease, the new policy might not cover your care for that condition until you have been enrolled for a period of time. Under group health plans you get at work, pre-existing condition exclusions can't be longer than one year. Also, group health plans have to give you credit for other health insurance coverage you had previously. So, for example, if you change jobs and move from one group health plan to another, your prior coverage will probably satisfy the new group health plan's pre-existing condition exclusion period.

In individual health insurance policies, by contrast, pre-existing condition periods might be longer, or even permanent. And you might not get credit for your previous coverage. The rules depend on the state where you live. Contact your state insurance department for more information.
Are there limits on what is covered? Pay attention to coverage limits and how they apply. Many private health insurance policies have a lifetime limit on covered benefits. For example, they may stop paying anything once they have paid $1 million. Sometimes a policy may also have an annual limit on what it pays for covered benefits. For example, they may stop paying anything after they have pay $100,000 in one plan year.

It is more common for private health insurance policies to put limits on coverage for specific kinds of benefits. For example, a policy might only pay for $10,000 in prescription drug costs in on plan year, or they may cover only 20 physical therapy visits in a year.

If your policy limits coverage for care you need, consult the section on patient resources for other possible sources of help pay your medical bills.
How much will I have to pay for my covered care? There are a number of factors that determine how much you will likely pay out-of-pocket to get the healthcare and medication you need.

Most private health insurance requires you to pay at least a portion of covered medical bills. These cost sharing features in your policy are important to understand. There are at least three different kinds of cost sharing that may be in your policy.

A deductible is the amount of covered medical bills you have to pay yourself before the insurance will begin to pay. For example, if your policy has a $500 deductible and it covers doctor office visits that normally cost $100 each, you will need to pay for the first five visits yourself before your insurance starts to pay for remaining visits. Most private policies have an annual deductible that applies to most or all covered care. But your policy might also have separate deductibles for specific services (for example, a hospital deductible or a prescription drug deductible).
Coinsurance is a percent of the bill you are required to pay. For example, your policy might cover 80 percent of a medical bill, leaving you to pay 20 percent coinsurance.
Co-pays or co-payments are fixed dollar amounts you must pay per service. For example, you might be required to pay a $25 co-pay each time you fill or refill a prescription, no matter what the drug costs.

What other coverage rules do I have to follow?
Often, private insurance has other rules you must follow for your medical care to be covered under the policy. For example, your insurance may require you to get a referral (or written permission) from your primary care doctor before you can see a specialist. Insurance might also require prior authorization for certain expensive drugs or treatments (such as bone marrow transplant). Your doctor may already know the prior authorization rules for your policy and so will be able to help you get all needed information to the insurer so your care will be covered. If not, ask the doctor or nurse to call your health plan or call yourself to find out the rules before you leave the office.

Another feature to watch for is disease management or case management programs. Sometimes, insurance companies will assign a nurse practitioner to work closely with patients who have expensive health conditions. The nurse manager may help you coordinate care when you need a lot of different drugs, therapies, treatments, and tests. Sometimes these case management programs are voluntary, that is, you can refuse to be in it if you prefer not to; other programs might be required.

Pay attention to the rules regarding network providers and find out whether your own provider is in network. Doctors and hospitals sometimes change networks during the year, so check periodically to be sure they're still in.

You may want to get care outside the plan network. For example, you may want to seek a second opinion, or, if you change plans, you might want to continue treatment from your doctor in the old plan network. Understand when your health insurance policy will or won't pay for care from doctors and hospitals outside of the network. Note also whether your policy requires you to pay higher cost sharing for out-of-network care.

Also, realize you might have to pay balance billing when you get care out of network. This is the difference between the fee your health insurer allows and what a non-network provider actually charges. For example, your health insurance might allow a charge of $50 for an office visit and reimburse 80% of allowed charges when you get care in network, but only 70% of allowed charges out of network. If a non-network doctor charges $100 for an office visit, your insurer will reimburse 70% of $50, or $35. You will owe the non-network doctor the $15 coinsurance on the allowed charge plus another $50 in balance billing, for a total of $65. Balance billing can leave you with large out-of-pocket medical bills.

Finally, for your prescription drug needs, find out about your health plan's drug formulary. This is a list of drugs that your insurance will cover. If you need a drug that's not listed on the formulary, it probably won't be covered. More and more, private insurance uses "tiered formularies." Less expensive drugs, such as generic drugs, may be on the lowest tier, and for these your cost sharing will be lowest (for example, a $10 co-pay per prescription). More expensive brand name drugs might be on a second tier and require more cost sharing (for example, a $25 co-pay). Some of the most expensive drugs, including many used by patients with bone marrow diseases, may be on even higher tiers with even higher cost sharing. Check the drugs you need against your health insurance formulary. If need be, ask your doctor if lower cost drugs are available and could be safely used instead.

Other tips for getting the most out of your health insurance

Using your health insurance is not always easy, especially with a serious condition such as bone marrow failure disease. You will need many kinds of health care services and may experience a blizzard of paperwork. Mistakes can and do happen. Keeping track of it all can be a challenge. Here are a few more tips for using your coverage wisely:

Keep your health insurance card handy at all times. You will be asked to present it just about every time you seek care or fill a prescription.
Pay premiums on time. Do not let your health insurance expire. It can be difficult, expensive, and sometimes impossible to get new insurance.
Read and keep your policy or benefits handbook. If you can't find your copy, call the insurer or your employer and ask for a new one. Familiarize yourself with what it covers and any limitations or exclusions. Know the plan rules and follow them.
Keep accurate and complete records of all the care you receive, when, from whom, and why.
Keep copies of all paperwork related to your claims, such as letters of medical necessity, explanation of benefits, bills, receipts, requests for sick leave, and all other written correspondence from doctors, hospitals, other providers, and insurers.
Open your medical bills as you receive them. Usually, providers in your plan network will submit bills directly to the insurance company for you. However, you may still get bills for your cost sharing responsibility and other costs insurance doesn't cover.
If you become overwhelmed with your bills, try to get help. Ask a friend or relative, a caseworker, a hospital financial counselor, or a social worker to help you.
If you think your health insurance should pay a bill that the provider sent to you, don't just ignore the bill. Call or write the provider to let them know that you expect the insurer to pay and how you will follow up. Send copies of any correspondence with your insurer about a claim to the provider, too.
Engage your doctor. Your doctor and other providers can help you follow insurance procedures. Ask for their help in obtaining referrals or other authorization for medical care and choosing among providers. Their billing staff may be especially helpful at navigating the system. Keep them in the loop and ask for help when you need it.
Call member services at your health plan whenever you have a question or problem. Try to be polite and calm�always�even if you feel frustrated. If necessary, ask to speak to a supervisor. Write down the date and time of your call, the name of the person(s) you spoke with, and what they told you. If you don't get the help you need, make your request in writing and keep a copy of the letter you send.
If your health insurance denies a claim or pays a claim incorrectly and you disagree, appeal.
Sometimes there will be bills or cost sharing that insurance simply won't pay. If these become overwhelming, seek help for this too (see question on Medical Bills for more information).

My health insurance will not pay my medical claims. What should I do?

Don't take "no" for an answer. Insurance companies can make mistakes. If the health plan won't cover care you think it should, question the decision to see if they'll correct it. Contact your human resources department (for employer-based coverage) or your insurance agent (for individual coverage) to see if they can intervene on your behalf. If that doesn't work, consider a formal appeal.

Some organizations offer specific help with medical claims for patients with bone marrow diseases.

Also, don't be afraid to contact federal or state authorities to lodge a complaint. For complaints about a policy you purchased on your own or one provided by a small business, contact your state insurance department. You can visit the National Association of Insurance Commissioners' (NAIC) Web site which links to each state's insurance department. You might also want to contact your state attorney general. Many have consumer divisions that can help you with health insurance complaints. Check out The National Association of Attorney Generals Web site.

How can I appeal my health insurance company's decision?

All health insurers have procedures for appealing denials and resolving other disputes. Your policy or handbook should explain what those are and how to pursue them.

Most private insurance appeals processes involve multiple steps. It is not unusual for insurers to stick with their original decision to deny a claim the first time you appeal. Don't give up. Follow the next step in the appeals process and ask the insurer again to reconsider. Ask your doctor or other provider to write a letter in support of your claim and to provide any additional information the insurer may request.

If you exhaust your appeals within the plan and still are not satisfied, in most states, you may also be able to appeal to an independent external review program. This can take some time, but remember that research shows consumers who vigorously appeal health plan denials win at least half the time.

Learn more about appeal rights in your state. A nonprofit group called the Patient Advocate Foundation may also be able to help with your appeal.

Some organizations offer specific help with appeals for patients with bone marrow diseases.

I'm having trouble paying my medical bills. What should I do?

Many people go through tough times when they find it hard to pay their bills on time, even when they have health insurance. Most hospitals and agencies are willing to discuss and help resolve these problems. To keep a good credit rating, it is important to pay attention to notices that say a bill will be turned over to a collection agency. Families can do the following:

Review your bill. Get an itemized copy of your bill and check it for mistakes. A Consumer Reports article, "Decoding your hospital bills," discusses medical billing errors and provides a list of common errors; read the article at www.consumerreports.org (search for "medical bills").
Explain the problem to the hospital, clinic financial counselor or doctor's office secretary.
Ask if you can work out a payment delay or an extended payment plan.

Talk with a social worker about sources of short-term help.
Consider letting relatives or friends help out with money on a short-term basis.
Find other sources to pay the bill, such as churches, charity care, pharmacy assistance programs, or other state and local programs.
Think carefully before transferring your debt to a credit card. Keep in mind that you may be transferring your medical debt to a higher interest rate card, which will add significantly to the total payment. The National Endowment for Financial Education released a consumer guide on managing medical debt. Book Three of the guide specifically addresses options for avoiding and managing medical debt.
Finally, consult the list of patient resources, many of which have been developed specifically for patients with bone marrow diseases. There are several organizations that may be able to help you with your medical bills.

I might lose my private insurance, what are my rights? Help!

Depending on your situation, there are important protections under federal and state law that may help you through difficult health insurance transitions. Some of these protections can help you hang on to the coverage you have. Others provide some help finding new coverage.

COBRA is a federal law that allows people to remain temporarily covered under their employer-based plan following certain events such as a layoff, retirement, or divorce. This temporary continuation can be very important for people who are in treatment and need their coverage to continue until they can find a new job or new health insurance. Unfortunately, COBRA doesn't require your former employer to continue paying the premium; you must pay the entire premium yourself. For this reason, many people who would like to remain covered under COBRA cannot afford to do so. However, some organizations have programs that can help patients with bone marrow disease pay their COBRA premiums. If your job-based group health plan is through a company with at least 20 employees, COBRA protection probably applies to you. For questions about COBRA, start with your employer and your health plan. The U.S. Department of Labor could also help you with your COBRA questions.
Most states have laws requiring group health insurers to offer state continuation coverage that is similar to COBRA. If you are about to lose group health plan coverage from an employer with fewer than 20 employees, you may be eligible for state continuation coverage. Contact your state insurance regulator for more information about state continuation and whether this protection applies to you. You can visit the National Association of Insurance Commissioners (NAIC) Web site which links to each state's insurance department.
Another federal law called HIPAA offers some help when you lose job-based coverage and have to find a new individual policy on your own. HIPAA requires health insurance companies that sell individual policies to offer you a policy that won't turn you down and that doesn't have a pre-existing condition exclusion period. These are important protections. Without them, people with a bone marrow failure disease won't be able to buy individual health insurance policies in most states.

To be eligible for HIPAA protections, you must meet all of the following requirements:
- You must have had 18 months of continuous prior coverage, at least the last day of which was under a group health plan
- You must have used up any COBRA or state continuation coverage for which you were eligible
- You must not be eligible for Medicare, Medicaid, or a group health plan
- You must not have health insurance
- You must apply for health insurance for which you are HIPAA eligible within 63 days of losing your prior coverage
Depending on where you live, there may be limits on how much you can be charged for HIPAA coverage. In states that do not limit premiums, HIPAA coverage can be very expensive. Also, depending on where you live, there may be rules about what HIPAA policies have to cover.

Contact your state insurance department for more information about HIPAA coverage. You can visit the National Association of Insurance Commissioners (NAIC) Web site which links to each state's insurance department.
If you need to take leave from a job because of your illness, or to care for a sick family member, or to have a baby, you may be able to keep your group health coverage for a limited time. A federal law called the Family and Medical Leave Act (FMLA) guarantees you up to 12 weeks of leave for these reasons. Your employer may or may not have to pay your wages while you are on Family and Medical leave, but the employer must continue your health benefits and contribution toward your premium during your leave. You will have to continue paying your share of the premium. The FMLA applies to companies with 50 or more employees. Other rules also apply. For more information or questions regarding FMLA, contact the U.S. Department of Labor.
High-risk pools are programs that offer individual health insurance coverage to people with high-cost conditions, including bone marrow diseases, who might have trouble buying coverage on their own. They are offered in more than 30 states. In most states, individual health insurance companies can and will turn you down when you apply for coverage and you have a bone marrow failure disease. High-risk pool programs charge monthly premiums for coverage, often higher than the premiums charged by private insurers. Some high-risk pools offer discounted premiums to people with low incomes. Most high-risk pools also have pre-existing condition exclusion periods, although some will give you credit for your past health insurance coverage and waive some or all of the exclusion. Find out whether your state has a high-risk pool and contact that program for more information by visiting this Web site and then going to "States with Pools".

Deciding between insurance options

It can be a challenge to find coverage that meets your healthcare needs and fits your budget. Health insurance that covers more tends to cost more. Do your best to balance the monthly premium cost of a policy against the protection it offers. Try to determine what you will have to pay for covered services by considering the deductible, co-insurance, co-pays, and out-of-pocket limit. Also estimate costs for non-covered care (services excluded or limited by the policy, as well as potential charges from balance billing.) The Evaluating Health Insurance Choices Worksheet can help you keep track of this information.

It is wise to avoid policies that do not have some kind of maximum out-of-pocket limit on covered charges. Also, do not mistake insurance-like products, like the ones below, for comprehensive coverage. They are NOT a substitute for comprehensive health insurance coverage.

Dread disease policies: These policies pay only for costs related to treatment for specific diseases, such as cancer.
Accident-only policies:Hospital indemnity policies: These policies pay cash benefits for each day you are in the hospital. Usually, however, the cash benefit will be nowhere near the cost of hospital care. Hospital indemnity policies may be an option if you want to supplement your regular health insurance to cover extra costs that can come up when you get sick, but they should not be confused with health insurance.
Discount medical plans: Discount medical plans are not health insurance, and they will not protect you from high medical expenses. Some people may mistake discount medical plans for health insurance because of insurance-like features of these products. For example, discount plans charge a monthly premium, issue an ID card, and offer "coverage" for a broad range of health services. Discount plans also typically advertise a network of providers who will discount charges by, say 25 or 30 percent to patients who are cardholders. However, the discount policy, itself, never pays out any money. Instead, its network providers are supposed to reduce fees, but responsibility for paying the discounted fee rests with you.

Are there subsidies to help me pay my premiums?

A few states have created programs to help people pay private health insurance premiums. These include:

the Commonwealth Care program in Massachusetts (then click on "Commonwealth Care")
the Dirigo program in Maine (then click on "Dirigo Choice")
the Catamount Health Care program in Vermont
the Health Indiana Plan

In addition, the federal government offers a tax credit for health insurance premiums for a limited group of people. If you were laid off because of foreign imports, you might be eligible for the Health Coverage Tax Credit (HCTC) to pay for 65% of your health insurance premium. The HCTC can be used to pay for COBRA premiums or, in some states, for individual health insurance policies. Visit the Internal Revenue Service's Web site site to find out if you are eligible for this subsidy.

Finally, some patient assistance programs may be able to help you pay your health insurance premiums.

Who else can I call with questions about my private insurance?

Questions about insurance coverage often come up during treatment. Here are some suggestions for dealing with insurance-related questions:

Speak with your insurance company's customer service department.
If you have employer-based coverage, contact your employer.
If you have a problem with your employer-based coverage or COBRA, you might have to call the federal government. The Employee Benefits Security Administration (EBSA) at the U.S. Department of Labor is a good place to start. The agency has regional field offices around the US.
If you have questions or concerns about a policy you bought on your own, about a group policy purchased by employer, or about licensed agents selling insurance in your state, contact your state Insurance Department. The best place to start is by contacting the National Association of Insurance Commissioners (NAIC), which has a Web site that links to each state's insurance department.
Learn about the laws regarding insurance that protect the public. The Agency for Healthcare Research and Quality has a section entitled Questions and Answers About Health Insurance that may give you helpful information as a health care consumer.