The Insurance Basics
What is insurance? Most simply, insurance is a contract between you and the insurance company that says that the insurance company will pay a portion of your medical expenses if you get sick, hurt or need an annual checkup and have to visit a doctor’s office or hospital.
Why is it important to have insurance? Without health insurance, it is more difficult to afford medication and services.
What types of insurance are there? There are many different types of insurance companies, programs and plans in the United States, each serving different populations with different needs. Two general categories are:
- Public programs - government-funded programs or financial support to help you pay for your medical treatments. Examples include Medicaid and Supplemental Security Income. Each program has different eligibility requirements and application processes.
- Private plans - plans funded by either private insurance companies or private employers. Enrollment requirements and costs are determined by either the insurance company or the private employer.
Finding the Right Plan
Don’t be stumped when it comes time to finding insurance once you turn 18. Here are some suggestions for finding coverage:
- If it’s not broke, don’t fix it. If you’re already covered under your parents’ health insurance plan, the Affordable Care Act requires that your insurance company allow you to stay on your parents’ plan until your 26th birthday. Don’t worry though − you don’t have to live with your parents to be on their insurance plan. You can even get married and still qualify!
- College: more than an education. If you are attending or planning to attend college, ask if the school has a student health insurance plan.
- Work for it. If you’re going to be working, look for jobs with health insurance as an employee benefit.
- The government. Both your state and federal government have assistance and insurance options that you can access. Here are a few:
- Supplemental Security Income (SSI). SSI provides cash to meet basic needs for food, clothing, shelter and medical benefits. Your eligibility depends on your income and is re-evaluated on a regular basis. You may already be on SSI, but you’ll have to re-apply for SSI as an adult once you turn 18.
Apply online or by phone at 1-800-772-1213.
- Medicaid. If you qualify for SSI, you also qualify for your state’s Medicaid program, which provides medical benefits to eligible low income persons needing healthcare.
Google “Department of Health and Human Services” to find your local Medicaid office.
- Additional State Programs. Some states have additional programs – like California Children’s Services - for children with certain diseases and health problems. These programs can sometimes extend to your 21st birthday.
Do a quick search yourself! Find insurance options in your state
Choosing an Insurance Plan
Your insurance is going to be most effective (meaning less out-of-pocket costs for you) if it covers (pays for) your prescription medications, doctor’s visits, etc. Call your potential insurance company or read the insurance company’s plan of benefits to find the answers to these important questions:
- Is my current doctor (PH specialist) covered (paid for) by this plan? You’ll want a plan that covers your PH specialist. If you’re planning to transition to an adult specialist, you’ll want to make sure that the plan covers visits to your new specialist.
- Is my PH center in-network for this insurance? If your center isn’t in-network, meaning not included in the company’s list of hospitals and doctor’s offices that they contract with, you may have to pay more out-of-pocket or need to obtain prior authorization for their services and tests (even if they’re routine).
- What are the total out-of-pocket costs and can I afford to pay them? Calculate how much you think you’ll pay monthly for medical needs and then ask yourself if you can afford it. Keep in mind:
- Is there a premium (monthly payment) you’ll have to pay to keep the insurance?
- Is there a deductible you’ll have to pay before the plan will start paying for benefits?
- How much will you have to pay each time you see your doctor or fill a prescription?
If you don’t think you can afford the plan, there are resources to help! Caring Voice Coalition has a financial assistance program for PH patients.
- Will this plan cover my medications? Check to see if your plan will cover the PH medications you’re currently taking. If you anticipate taking another PH medication in the future, ask if the plan covers these medications as well.
- If I were to require a transplant in the future, will this insurance cover organ transplant?
Know Your Insurance Rights
Certain laws protect your rights. As you learn how to manage your insurance, keep these laws in mind:
- Affordable Care Act (ACA), also known as healthcare reform, increases access to healthcare and enhances the quality of healthcare for all Americans. The ACA includes reforms that help more children and young adults get health coverage, end limits that insurance companies place on how much they’ll pay for an individual or family, allow you to stay on your parents’ health insurance until age 26, and give you access to preventive services without cost.
- Americans with Disabilities Act (ADA) states that employers may not ask job applicants about the existence, nature or severity of a disability. This includes questions about your family’s health or any past illnesses or surgical procedures you have undergone. Employers may ask you whether you are able to perform the essential functions of a job, but must make reasonable accommodations to allow you to perform your job as necessary (such as providing a refrigerator or freezer for your medications if necessary).
- Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to temporarily keep your health insurance policy if you are losing or changing jobs.
- Employment Retirement Income Security Act (ERISA) requires insurances providers to disclose plan benefits and funding levels, as well as ways to manage and access your benefits.
- Family and Medical Leave Act (FMLA) provides you with the right to take time off to address family medical issues.
- Genetic Information Nondiscrimination Act (GINA) prohibits insurance providers and employers from discriminating on the basis of your genetic information.
- Health Insurance Portability and Accountability Act (HIPAA) is a set of laws that protects your personal information while also allowing healthcare administrators to conduct necessary business operations. It also outlines standards for maintaining coverage through life transitions (such as changing jobs) and pre-existing conditions.
Affordable Care Act (ACA) – a law that increases access to healthcare and enhances the quality of healthcare for all Americans. Changes from the ACA include reforms that help more children and young adults get health coverage, end limits that insurance companies place on how much they’ll pay for an individual or family, allow you to stay on your parents’ health insurance until age 26, and give you access to preventive services without cost.
Children's Health Insurance Program (CHIP) − an insurance program that provides health insurance to low-income children and, in some states, pregnant women in families who earn too much income to qualify for Medicaid but cannot afford to purchase private health insurance coverage. CHIP coverage generally ends at age 18.
Coinsurance − the amount you have to pay for a medical service written as a percent of the total cost. For example, the health insurance may cover 80% of charges for a covered hospitalization, leaving you responsible for the other 20%. This 20% is known as the coinsurance.
Copayment (Copay) − a set amount you have to pay for a medical service covered by your insurance. For example, you may have a copayment of $15 every time you visit your primary care physician.
Deductible − the amount of money you have to pay for your healthcare before your insurance plan pays for any medical services or prescriptions. For example, your insurance company may pay for 90% of your prescription costs, but only after you pay $500 towards prescription costs. This $500 is known as the deductible.
Durable Medical Equipment (DME) − medical equipment that can withstand repeated use, is not disposable, serves a medical purpose, is generally not useful to an individual in the absence of sickness or injury and is appropriate for use in the home. Examples include home oxygen, wheel chairs, pumps and inhalers.
Explanation of Benefits (EOB) − a description, sent to you and your healthcare providers by your insurance plan, of benefits received and services for which the health care provider has requested payment.
Formulary − a list of prescription drugs that your insurance plan will cover. Each plan has a different formulary.
Health Insurance − protection that helps cover the cost of and increases access to medications and medical care.
In-Network − a list of providers who participate in a health plan's provider network. By using in-network providers, you may have lower copayments, and may not need prior authorization for services.
Managed Care Plans − Virtually all private health insurance companies incorporate some form of a managed care component, where the plan implements health care measures to control costs associated with heath care services. Types of managed care plans include:
- Health maintenance organization (HMO). A plan that covers a particular geographic area and gives you access to certain pre-selected doctors, hospitals and other medical providers within a network. If you are a member, you are required to obtain care from this network of providers in order for insurance to cover the costs, except in cases of emergency. There is usually no deductible and only minimal co-payments. HMOs also require members to select a primary care physician (PCP) who acts as a gatekeeper to direct access to further medical services.
- Preferred provider organization (PPO). A group of healthcare providers that form a network of doctors, specialists and hospitals. Unlike an HMO, you have the option to receive care from an individual or facility that is outside of that network. With a PPO plan, you don’t have to choose a PCP, nor are you always required to get a referral to see a specialist. Typically, enrollees are offered incentives to use preferred providers, such as reduced deductibles and copayments, or increased benefits such as preventative healthcare. Still, you will likely be subject to a deductible as well as a coinsurance that could be a substantial percentage (e.g., 20%) of the physician’s charges or cost of prescriptions.
- Point of service plan (POS). A plan that combines the characteristics of an HMO and a PPO. Like an HMO, you pay zero deductible and usually only a minimal copayment when you use a healthcare provider within your network. You also must choose a PCP who is responsible for all referrals within the POS network. On the other hand, you have the flexibility of a PPO in choosing to go outside the “network” for healthcare — subject to higher deductible and coinsurance/copayment costs.
Medicaid − provides medical benefits to eligible low-income persons needing health care.
Medically Necessary − term used to describe services and care that is reasonable and appropriate for the diagnosis or treatment of a medical condition or illness.
Open Enrollment Period − the period of time set up to allow you to change coverage and choose from available plans, usually once a year.
Out-of-Pocket (OOP) Costs − costs that you “share” with your insurance company and thus pay out of your own “pocket.” The most common forms of OOP costs are deductibles, copayments, and coinsurances.
Out-of-Network − providers who do not participate in the network of a managed care plan.
Payer − a public or private organization that underwrites (pays for) coverage for health care expenses.
Premium − the payment made by an employer or individual to purchase and maintain insurance. These payments are usually made in monthly installments.
Prior Authorization (Pre-Determination or Pre-Authorization) − review of services to determine if the insurance company will cover/not cover charges before the services are provided. Many PH therapies require prior authorization.
Provider − institutions and individuals that are licensed to provide health care services. For example, hospitals, physicians, pharmacists, etc.
Reimbursement − payment made by an insurance company to a provider for approved medical services.
Step Therapy − Step therapy requires that less costly and risky treatment alternatives be explored and deemed unsuitable before more you can pursue more costly and risky options.
Additional Resources: Your Insurance Advisors
Advocacy for Patients with Chronic Illnesses (1-860-674-1370 or www.advocacyforpatients.org) provides information, advice and advocacy regarding retrieval of medical information, obtaining and keeping health insurance, obtaining coverage for your treatment, applying for Social Security benefits and asserting your rights.
Caring Voice Coalition (1-888-267-1440 or www.caringvoice.org) serves the comprehensive needs of individuals affected by serious and chronic disorders. They have programs to help you with insurance reimbursement, financial assistance, patient support services and public advocacy.
Healthcare.gov (www.healthcare.gov) is the official U.S. government site on healthcare reform. It provides information to help you understand the new law, tools to find insurance options, tips on how to stay healthy and a glossary to explain insurance terminology.
Patient Advocate Foundation (1-800-532-5274 or www.patientadvocate.org) is a national non-profit organization that seeks to safeguard you through effective mediation assuring access to care, maintenance of employment and preservation of your financial stability.
The U.S. Social Security Administration (1-800-722-1216 or www.ssa.gov) delivers Social Security benefits and services through a nationwide network of over 1,400 offices.
Visit our Insurance section for more insurance information and resources. You can also contact Insurance@PHAssociation.org or 301-565-3004 x773 with questions, suggestions or information requests.