Health Insurance
In the United States, insurance provides access to health care. Health insurance can help reduce the amount you need for cancer care.
Most people get health insurance in 1 of 2 ways:
Through an employer
Through a government program. Government health insurance options include Medicare and Medicaid.
However, some people do not receive health insurance at work. Others do not qualify for Medicare or Medicaid.
Types of private health insurance
Medical costs you must pay out of pocket depend on your insurance type. This glossary may help you explore the following insurance types and commonly used health insurance words.
Private health insurance
Private health insurers use different care models.
Two common types are:
Health maintenance organizations (HMOs)
Preferred provider organizations (PPOs)
HMO. This model covers costs within a network of contracted healthcare providers. People choose a primary care doctor within the network. That doctor oversees a person's health. And he or she refers the person to specialists when needed.
HMOs often have the lowest patient costs for private health insurance. But HMOs generally limit coverage in these ways:
You have fewer choices of doctors and hospitals. Only doctors and hospitals contracted with the HMO are covered under the plan. However, insurance companies may make exceptions for emergencies and medical necessity.
Access to a specialist requires a referral from your primary care doctor.
You may need precertification for some services, such as non-emergency hospital visits and specialist care. Precertification means getting the HMO's approval before receiving care. HMOs also may require notification within 24 hours of emergency care.
Some types of services may need to be covered.
PPO. This model contracts health care providers to offer services at a lower cost. Providers include doctors, hospitals, and other healthcare professionals. PPOs typically have a larger pool of in-network doctors than HMOs.
Most medical costs are covered when visiting in-network doctors. You only pay a small set fee. This is called a co-payment or co-pay. Also, PPOs allow visits to any doctor without a referral. PPOs may provide the freedom to visit out-of-network doctors. But you may pay a more significant portion of the bill.
PPOs may limit coverage in these ways:
You may need precertification for some types of care. That is more likely with out-of-network care.
Some types of service may need to be covered.
Savings accounts
Flexible Savings Accounts (FSAs) and Health Savings Accounts (HSAs) are 2 types of special bank accounts. They help you plan for medical expenses and receive tax benefits. Many employers offer these through private health insurance plans.
FSAs. You reserve a portion of your paycheck throughout the year. It is pre-tax money to use for out-of-pocket medical expenses. You decide the amount based on your estimated annual expenses.
Some plans provide an FSA debit card. For others, you pay first and submit your receipts for reimbursement. At the year's end, any unused funds will be lost.
HSAs. The funds you put in an HSA do not expire. Unused funds remain in your account for the following year. You may keep the account after leaving a job. You also have the option to invest the money. But only high-deductible health insurance plans offer HSAs.
With a high-deductible health plan, you are responsible for 100% of costs until meeting a deductible. Usually, this deductible is several thousand dollars. After you reach this amount, your insurance will pay 100% of covered medical services. You start with a new deductible each year.
Government-sponsored insurance programs
Medicare. Medicare is the federal health insurance program. It covers people 65 and older and some disabled Americans. It has different parts.
Medicare Part A covers these costs:
Inpatient care
Skilled nursing care
Hospice care
Some home care services
Medicare Part B covers these costs:
Physician services
Outpatient care
Physical and occupational therapy
Many cancer drugs are given in outpatient medical offices and clinics
Selected supplies that are deemed "medically necessary."
You are not required to enrol in Part B. However, you may face a late enrollment fee if you register later.
Medicare Part C is also called Medicare Advantage. It allows Medicare-approved companies to provide Part A and B benefits. Sometimes, Medicare Advantage plans include Part D benefits.
Medicare Part D is a voluntary prescription drug benefit. It covers prescription drugs not otherwise covered under Medicare Parts A or B.
Medicare does not cover all health care expenses. As a result, some people purchase supplemental insurance policies. These may be private insurance products called "Medigap" policies.
Medicaid. The federal and state governments both fund Medicaid. Each state has its own program. This means eligibility and services are different for each state.
Traditionally, Medicaid has covered low-income people who are older or have a disability. It may also hide certain people with dependent children.
Some states elected to expand Medicaid under the ACA. These states may provide coverage for other low-income adults.
Find more information about Medicare and Medicaid at www.cms.gov and www.medicare.gov. Visit www.HealthCare.gov for information about Medicare and Medicaid under the ACA.
Other types of insurance
Health insurance covers some costs of cancer care. But typically, one plan only covers some of the costs. Other types of insurance are available to cover additional expenses.
Supplemental insurance. This helps cover expenses not covered by your primary insurance. Or it may cover costs you pay within your existing plan, including:
Deductibles
Co-insurance
Co-payments
Other out-of-pocket expenses
Supplemental insurance may also offer other benefits. For example, some plans cover income lost from missed work.
Disability insurance. This replaces income lost if health issues keep you from working. Qualifying health issues include long-term illnesses and injuries. Typically, employers and government-sponsored programs provide disability insurance. But individual policies are also available.
Hospital indemnity insurance. This provides limited coverage for hospital stays. It is usually a fixed amount for each day. And it is generally capped at a maximum length of stay. This mainly benefits people with a basic insurance plan that limits coverage of hospital care.
Long-term care insurance. This provides coverage to offset long-term care costs, such as nursing home care. Most private insurance plans and Medicare provide limited long-term care coverage.
How insurance works
It is essential to understand an insurance plan's benefits and limitations. The following examples show how co-pays, co-insurance, and deductibles work. You should also talk with a representative of your insurance provider. He or she can explain the details of your specific plan.
Example #1: Co-pays
Anna needs to see 2 specialists this week. Dr. Martinez charges $100 per visit. Meanwhile, Dr. Jones charges $500 per visit. Anna's insurance requires a $20 co-pay to visit a specialist. How much will the doctors charge her for the appointments?
Answer: Anna's out-of-pocket costs will be $20 for each appointment. That is a total of $40. Co-payments are a set amount. This means Anna's payment is independent of the bill amount.
Example #2: Co-insurance
Martin needs to see 2 specialists this week. Dr. Andrews charges $100 per visit. Meanwhile, Dr. Lee charges $500 per visit. Martin's insurance requires a 20% co-insurance for specialist visits. How much will the doctors charge him for the appointments?
Answer: Martin will pay Dr. Andrews $20. He will pay Dr. Lee $100.
A co-insurance payment is calculated by multiplying each bill by the co-insurance percentage. It is not a set amount like a co-pay.
Dr. Andrews will charge Martin $20 because $100 x 20% = $20.
Dr. Adams will charge Martin $100 because $500 x 20% = $100.
Example #3: Co-insurance and deductibles
Jasmine has a deductible of $2,000 a year. And she has not had any medical expenses yet this year. Her co-insurance for a hospital visit is 20%. She recently had a surgery that cost $10,000. How much will she need to pay?
Answer: Jasmine will pay $3,600 out of pocket for her procedure. The steps below explain how:
STEP ONE. Subtract the deductible from the total bill: $10,000 – $2,000 = $8,000.
STEP TWO. Multiply the difference by the co-insurance percentage: $8,000 x 20% = $1,600. This gives Jasmine's co-insurance amount.
STEP THREE. Add the deductible and the co-insurance amounts. $2,000 + $1,600 = $3,600.
What happens if Jasmine has another identical surgery within the same year? She already paid her deductible. Thus, she would have only the co-insurance payment. That would be $2,000 because $10,000 x 20% = $2,000.
Taxes
Some medical expenses not covered by insurance can be deducted from federal income taxes.
Examples of expenses that may be tax-deductible are:
Mileage for trips to and from appointments
Prescription drugs
Meals during lengthy medical visits
A tax advisor can explain the rules about medical expense deductions.
Comments
Post a Comment