The Confusing World of Health Insurance
The Confusing World of Health Insurance
THE PROBLEM - MIS-INFORMATION
If you've ever caught a political ad where a politician is talking with someone and that person is claiming that after having health coverage for many years, their insurance company cancelled their coverage when they became sick. During one election period, some politician brought out a woman who had been smoking for forty years and had been told she had stage four lung cancer. She said to the audience that her insurance company had denied treatment for her but more than likely it was too late to treat stage four cancer successfully. This type of mis-information is to no one's advantage except maybe the politician running for office.
LACK OF UNDERSTANDING
Over a twenty year career working in the health insurance arena, I've heard many, and varied, stories about problems getting their health claims paid - in fact I doubt that there's a story I haven't heard. And it never fails - these situations often arise because of the lack of understanding, confusion and misconceptions that that most insured individuals have about their health insurance coverage.
The health insurance topic has many shades of gray, caused by the different types of insurance and plan designs and the complex issues that have a unique effect on the coverage. No matter whether I turn on the TV or radio, speak with individuals or read about the issues, it's clear that many people are stumped about how health insurance works. After years of watching the health care debate rage in the halls of Congress, it's clear that even politicians who are working on the problem may not completely comprehend the processes, issues and the implications of this big business known as health insurance. Even those who prepare your medical bills as well as the insurance representatives who deal with your claims payments, may not have a clear understanding of the billing process or your plan.
HERE'S THE DEAL
First, a brief explanation on a couple of very basic issues - the difference between group and individual health insurance coverage and when, and under what circumstances, insured consumers may lose their coverage. Both of these topics show up in the media and are constantly bandied by individuals and politicians. The comments I hear indicate that people who have health insurance, and carry the coverage for years, are dropped by the insurance company (or certain treatment or procedures are denied) when they become sick. In some cases this is true but it's important to understand how and why this can occur and the different types of health insurance that impacts a loss of coverage. So...lets' talk turkey!
Group health insurance is coverage for employees, and their eligible dependents, that can only be obtained through an employer-sponsored plan. This type of coverage may have within the plan guidelines, the following:
* A pre-existing period, that must be satisfied, before claims for a particular pre-existing condition is covered.
* Once the pre-existing period has been satisfied, all claims for eligible and medically necessary treatment and/or services are covered (up to the applicable limits, maximums or exclusions).
* Medically necessary treatment for an illness or injury, that is not a pre-existing condition or an exclusion under the plan, is generally covered on the coverage effective date.
* Annual, service or lifetime limits, maximums or exclusions as defined in the plan document.
* Most plans have some kind of service or dollar limitations or exclusions on certain treatment or servic built into their plan design.
* Under these limits, certain services/treatment can be denied for the balance of the plan year once the service or annual limits have been reached.
* Service limitations may specifically limit or deny treatment obtained from certain types of providers (such as naturopathic or homeopathic providers).
* Treatment that is excluded under the plan will not be covered, even when the treatment is determined to be medically necessary.
* Once a lifetime plan maximum has been reached, no further claims will be paid under the plan.
Individual health insurance, on the other hand, is a type of health insurance where an individual purchases health insurance coverage directly through an insurance company (non-employer sponsored). This is not COBRA coverage, but in fact health coverage purchased where a group plan may not be available to the individual. These types of plans may be costly and have limitations that may not go away with time. Generally....
* Individuals who participate in individual plans may be required to go through a physical examination and must answer a pre-existing questionnaire prior to being granted coverage.
* Coverage for treatment for specific pre-existing conditions may be denied for the life of the policy but other conditions, that are not pre-existing, may be covered (up to the applicable limits, maximums or exclusions).
* If upon the receipt of a claim or inquiry for coverage, it is determined that the treatment is related to a pre-existing condition, that was not revealed on the pre-existing questionnaire, the insurance company can cancel coverage or refuse to pay for the treatment, even if the individual has been insured and paying premiums for some time.
NOT A BLACK AND WHITE ISSUE
As you can see, cancellation of health insurance coverage is not a black and white issue. There are many variables and blanket statements by politicians and others who lack an understanding of health insurance processes and nuances are not always accurate and cause a lot of confusion. Those who make these broad assertions should understand what they are stating. But more importantly, insured individuals should be committed to understanding how their health coverage works instead of relying on the statements of others.
WHAT CAN I DO?
Take the time to read your insurance policy. "Oh sure," you say, "I'll never remember it all, if I even understand it in the first place." And that's true but after reading that document, you will have an idea of what to do or who to call when you have a medical/dental situation that occurs. Instead of being saddled with more out-of-pocket costs that necessary, you will understand enough to know who to call, what to ask and when to intervene. So dear readers.....take that first step and read - then contact your insurance company and ask for clarifications on points that you're not sure about. You will then find yourself in the driver's seat, instead of the other way around.