Breaking down basics of health insurance
Breaking down basics of health insurance
Written by Chantal Outon Thursday, 20 November 2008
America’s healthcare system has received a grave diagnosis, and the health insurance industry is not medicating the problem with much success. In Texas, the prognosis is dire; the Lone Star state has the highest uninsured rate in the country with 5.8 million people, or 25 percent of the population, living without health insurance.
Experts are finding it is not the unemployed and indigent who make up the bulk of Texas’ uninsured since many falling below the poverty level qualify for government-assisted health coverage. A large percentage of uninsured people in the state are young, healthy individuals who do not want to pay for health insurance and who do not receive coverage through their employers.
“The biggest issue right now is finding affordable health insurance coverage,” said Katrina Daniel, associate commissioner of the life, health and licensing division at the Texas Department of Insurance. “The system is primarily employer-based, so it can be difficult to purchase health insurance if you’re an individual with health concerns.”
While the cost of health insurance tops the list, understanding the options, requirements, billing and jargon involved in the industry might be another reason for the large number of uninsured. TDI’s Dianne Longley, director of research and analysis for life, health and licensing, said the best ally in the search for health insurance is an agent.
“My No. 1 suggestion is to get a good agent and shop around,” she said. “Communicate with your agent what your needs are, then have your agent get a quote from several different health insurance companies before you make a decision.”
There are myriad healthcare choices for consumers, but there are some basics to consider. The two types of health insurance coverage available to Texans are traditional plans and managed care plans.
Traditional plans
Traditional plans, or fee-for-service plans, allow the insured to visit any physician they choose, but require them to pay for doctors’ services and then file a claim for reimbursement. The insured person generally pays a deductible — an amount that must be paid each year before the insurer starts paying — and a percentage of doctors’ fees. Once the deductible is met, most plans pay a percentage for covered services, generally about 80 percent, while the insured must cover the other 20 percent. This is known as co-insurance.
Common fee-for-service plans offer comprehensive health coverage, and many pay hospital expenses in full. These types of plans typically have what is called an out-of-pocket maximum, meaning that once the insured person’s medical expenses reach a certain level during the year, the “usual and customary” costs for covered benefits are paid in full by the insurer and the insured person no longer pays the co-insurance. Should doctor bills exceed the usual and customary fees, the insured person may have to pay a portion of the bill.
Managed care plans
Managed care plans are those with networks of doctors providing comprehensive health services. Some offer incentives to encourage members to use the plan’s doctors, while others require members to use only specific doctors. Types of managed care plans include health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point-of-service (POS).
HMOs do not require members to pay a deductible or co-insurance, but charge monthly premiums that essentially have members pre-paying for healthcare services, as well as co-payments when visiting doctors and designated fees for prescription drugs, emergency visits and hospital stays. Plans generally require using network doctors and hospitals and insist that members’ primary-care physicians provide a referral for a specialist or other doctor outside the HMO’s network. However, HMOs must allow women to choose a network gynecologist without a referral, and direct access to specialists is allowed by law in some situations.
PPOs also have a doctor network, but provide some coverage for doctors outside the network (members usually must pay more in such cases). Members pay a co-payment when visiting doctors, and they sometimes pay a percentage of doctors’ fees. One key benefit is that the member may choose his personal doctor and a referral is not usually needed to see a specialist.
POS plans are essentially hybrid health plans that include elements of HMOs and traditional plans. They are available with some HMOs, but include a written agreement that may add or exclude certain coverage. Inside the network the plan operates like an HMO, while outside the network, it operates like a traditional plan.
Local option
Two Cedar Park-based entrepreneurs have launched a website business they hope can assist area residents who aren’t necessarily indigent, but who cannot otherwise afford health-insurance coverage. Scott Vanlandingham and Daniel Hummel recently founded Patient Deals, a website that connects patients with doctors who may discount medical fees for patients paying at the time of service.
The website, PatientDeals.org, is a free service for patients and doctors and includes a wide variety of Central Texas physicians, dentists and even chiropractors who are willing to discount fees for everything from regular family-practice visits to surgical procedures and urgent care, so long as patients pay at the time of service. Though it is up to patients to negotiate on their own behalf, Vanlandingham said patients can save up to 25 percent on an average doctor bill simply by cutting out the insurance middleman.
“If you can afford health insurance, that’s great. If you can’t, there are other options,” he said. “We’re trying to put the power back in the hands of consumers.”
Area organizations serving the uninsured and underinsured
- Lone Star Circle of Care, 868-1124 or www.lscctx.org
- People’s Community Clinic, 478-4939 or www.pcclinic.org
- Samaritan Health Ministries, www.theshm.org
- Seton Topfer CommunityHealth Center, 324-6850 or www.seton.net/locations/topfer/
- Volunteer Healthcare Clinic, 459-6002 or www.volclinic.org
- Other resources
- Indigent Care Collaboration, 804-2090 or www.icc-centex.org
- Insure A Kid, 324-2447 or www.insureakid.org
- Patient Deals, www.PatientDeals.org
- St. David’s Community Health Foundation, 879-6600 or www.stdavidsfoundation.org
- Texas Children’s Health Insurance Program, 1-877-KIDS-NOW or www.hhsc.state.tx.us/chip
- Travis County Community Health Centers, 329-5959 or www.tachc.org
- Travis County Healthcare District, 978-8000 or www.traviscountyhd.org
- United Way Capital Area, 472-6267 or www.unitedwaycapitalarea.org
- Williamson County and Cities Health District Healthcare Helpline, 248-3252 or www.wcchd.org
