Risky Business: Resolve Insurance Concerns Early

While most people have health insurance, many never pay much attention to it until they experience a serious illness or accident. Needless to say, health insurance can be very confusing, as there is a dizzying array of health plan options, complicated by each state having different rules and regulations.

Many individuals may be unaware of the specifics of their coverage and how to best use their benefits until they take a crash course in an emergency room or doctor’s office. So, while a cancer diagnosis isn’t the best time to figure out the details of what a policy will cover, a clear understanding of the plan can help patients avoid unexpected costs and associated problems.

“The biggest problem I see when people are denied coverage for cancer is the bar for pre-existing conditions,” says Joshua D. Silverman, of the Silverman Law Firm in Richmond, Va., a firm that specializes in medical issues. “My advice for anyone, particularly for people with a diagnosis of cancer or with a family history of cancer, is to make sure they never have a gap in coverage. So long as there is no gap in coverage, a health insurer should not be denying people coverage for pre-existing conditions.”

The Affordable Care Act (ACA) is supposed to solve many of the current problems associated with insurance coverage, such as annual limits and preexisting condition exclusions. “But until it is fully implemented, we really do not know how well it will work,” Silverman says.

Additionally, lifetime limits on coverage will be phased out, so no one should “run out” of insurance. “I don’t think anyone really knows how much these plans will cost,” Silverman says. “The law does limit health insurers’ administrative costs under the 80/20 rule.”

In other words, at least 80 percent of premiums must go towards paying claims and no more than 20 percent of premiums can cover administrative costs. Under the ACA, low-income Americans without coverage will be able to get insurance at low or no cost, typically through Medicaid.

Physicians often work with a number ofinsurance carriers and often do not know thespecifics of coverage.

One risky assumption that individuals often make is that their healthcare provider is knowledgeable about their insurance, when that is likely not the case. “Physicians often work with a number of insurance carriers and often do not know the specifics of coverage,” says Jen Flory, director of the Disability Rights Legal Center in Los Angeles. “They may have certain specialists they work with, for instance, but who may not be in the patient’s insurance network.”

“Patients do need to do their homework and call their carrier,” she says.

Currently, insurance can be broadly divided into coverage that is offered through private plans and those that are offered through federal and state governments.

Private health insurance is available through individual plans, or via groups, such as an employer or association. Health plans provide coverage for preventive care, diagnostic tests, injuries and illnesses, but there are differences in how the plans function. These variations will reflect how services are paid for, the benefits that are included, the degree of flexibility in choosing healthcare providers and the percentage of cost that is covered.

Traditional health insurance plans, also known as fee-for-service plans, are often the most expensive choice, but they also provide the greatest flexibility when selecting healthcare providers. Patients can choose any physician or specialist without obtaining prior approval.

A health maintenance organization (HMO) is usually a less-expensive option, but patients must use doctors, hospitals and other practitioners within a restricted network. Co-payments are often lower, but a variety of cost containment processes are enforced and the choice of providers is limited, and unless it is an emergency, the HMO will not cover care given by a practitioner outside of the network. Moreover, a referral from a primary care physician is usually required before patients can seek care from a specialist. HMOs must offer out-of-network coverage when patients do not have adequate access to providers and specialists who can meet their healthcare needs, but prior authorization is necessary.

Preferred provider organizations (PPOs), while more expensive than HMOs, also offer lower copayments than fee-for-service plans, but with more flexibility than HMOs in terms of selecting a provider. The insurer typically offers the most coverage for staying within the “network” of providers, but patients who choose to go outside the network will incur higher expenses.

Health savings accounts (HSAs) are funds (not subject to federal income tax at the time of deposit) that can be used for medical expenses by individuals who are covered by high-deductible health plans. “Health savings accounts do two things,” Silverman says. “They keep people from being tempted to divert money set aside for medical conditions for other things, and they offer tax advantages.”

Medicare is the nation's health insurance program for people age 65 and older, which consists of several parts:

> Part A covers inpatient costs, such as those incurred in hospitals, nursing homes and hospice;

> Part B provides coverage for healthcare providers, outpatient care, home health care and many preventive services;

> Part C (Medicare Advantage) is a plan offered through approved private companies that includes Parts A and B, and sometimes Part D, but may also offer extra coverage, such as for vision, hearing, dental and health and wellness programs;

> Part D helps lower the cost of prescription drugs in the outpatient setting; and

> Medigap is a supplemental insurance offered by private companies to fill the “gaps” in Medicare coverage (some Medigap policies may also cover certain benefits that Medicare doesn’t cover).

Medicaid, run by both the federal and state governments, is health insurance for low-income individuals and those with certain disabilities. The criteria for Medicaid eligibility vary from state to state. Cost sharing also varies, but is generally extremely limited for most program participants.

The Children’s Health Insurance Program, like Medicaid, is a program jointly funded through the federal and state governments that provide health coverage to children whose families do not qualify for Medicaid but who are unable to afford private coverage.

TRICARE and CHAMPVA are programs that provide healthcare coverage for military personnel and their families. TRICARE covers active and retired military personnel and their dependents, survivors and, in some cases, former spouses. CHAMPVA covers veterans and their dependents and is run through the Department of Veterans Affairs (VA). The VA shares the cost of services with eligible beneficiaries. Those who are eligible for TRICARE are not eligible for CHAMPVA.

There are patient assistance programs and,while they don't cover all expenses, they can help.

A cancer diagnosis can be especially difficult for those without insurance. However, there are some options for the uninsured and underinsured that can at least help pay for some care, Flory says. “There are patient assistance programs and, while they don’t cover all expenses, they can help.”

Some are specific to cancer type or geographic area, and some organizations can assist with co-pays and other out-of-pocket expenses for those who have insurance.

One example is CancerCare, which provides assistance for those who cannot afford medication co-payments or who need help with indirect treatment-related expenses. The AVONCares Program for Medically Underserved Women provides financial assistance to low-income and uninsured women, while the Chronic Disease Fund helps patients with chronic illnesses who have insurance but can’t afford their medications.

There are also pharmaceutical assistance programs offered by drug companies and other organizations, Flory says. The Cancer Legal Resource Center provides a telephone assistance line (866-843-2573) for free, confidential information about relevant laws and resources for the caller’s particular situation.

The Health Insurance Marketplace, required by the ACA, provides a way of obtaining insurance or getting a more comprehensive plan. Those who may or may not have access to employer coverage, or who are ineligible for public coverage, might have more choices in these exchanges, which are operated by individual states, by the Department of Health and Human Services (HHS) or in a partnership between a state and the HHS.

Finally, coverage may be available through the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA). COBRA allows employees to continue receiving group health benefits for a limited time after losing coverage due to job loss, reduction in work hours, etc. HIPAA allows insurance to be purchased after the COBRA period ends, for persons who are not eligible for any public coverage. HIPAA guarantees that insurance can be purchased without pre-existing condition exclusion periods, and plans are available in every state. These plans are expected to end in 2014 as less expensive options become available through the Health Insurance Marketplace.