Read This First
Things You Should Know BEFORE You Submit Your Claim
Dear Most Valued Client,
You’re probably reading this because you recently had an accident or illness that requires medical attention.
And you’re wondering …
- Should I submit a claim to my insurance company or not?
- Will there be any negative consequences?
- Will my price go up? By how much?
- Can my policy be canceled … and what happens then?
Those are very important questions. And while every situation is different, I’d like to provide you some inside information to help guide you to your answers. With most health insurance plans, the provider - the Dr., hospital, or clinic - will file the claim for you. The good news is that there are Federal and State laws that help protect the consumer with regard to premium increases and pricing.
While group employer health plans are guaranteed to be issues (down to 2 employees with the HIPAA passed in 1996), they can still limit coverage for pre-existing conditions. If you have had a lapse of coverage of more than 63 days in the past 18 months, the insurance company may impose a 6 or 12 month waiting period for any pre-existing condition. Most insurance carriers define a pre-existing condition as any health condition which was diagnosed or treated by a provider during the past 12 months (or 6 mos, whichever applies) prior to the coverage effective date, or for which symptoms existed which would cause an ordinarily prudent person to seek diagnosis or treatment. For example, if someone is taking high blood pressure medication to hypertension, that is considered a pre-existing condition. If you continual and credible coverage during the past 18 months, this condition would be covered day one with no wait. Also if you are double-over in pain but haven't seen a doctor, that is still considered a pre-existing condition.
On March 23, 2010, Congress passed the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148. Soon after this was enacted, certain benefits were available to everyone 6 months after the law was signed, including unlimited lifetime maximums and no annual maximums for essential benefits, adult children allowed to stay on parent's plans to age 26, and no pre-existing condition waiting periods for children under age 19. Beginning in 2014, the healthcare law states that there will be no pre-existing condition waiting periods or exclusions for anyone!
Between the passing of the law (3.23.10) and the implementation of the majority of the law (1.1.2014), there have been a number of changes to the law (removal of the 1099 tax, for example), clarification from HHS and a detailed description of benefits - including what are considered an 'essential benefit' and what benefits fall under the "preventative" category as "FREE" benefits, abandoning of the CLASS ACT by HHS as economically feasible, and a ruling by the Supreme Court on the 'constitutionality' of the individual mandate. Although the SC did not rule in favor of the mandate perse - they decide the government could not force people to buy health insurance under the Commerce Clause, they did decide that the government is allowed to TAX people who do not buy health insurance. This tax/penalty will go into force in 2014. (NOTE: for the purposes of the anti-trust law, the law was ruled NOT to be a TAX.)
Another piece of the healthcare law taking place in 2014 is the effect of 'community rating'. This in essence says that with regards to certain things - age, health, zip code, etc - one person cannot pay more than 2 or 3 times than another person. The community rating concept is designed to not discriminate, so that everyone pays about the same amount. So in theory, older people pay less, while younger people pay more; sick people pay less and healthier people pay more. Time will tell how the actually rates work. Those individuals deemed "uninsurable" by the individual marketplace, will be allowed to purchase insurance like everyone else, and the healthy individuals will help 'subsidize' their premiums.
Your Deductible & Coinsurance
Your deductible is the amount you pay when you have a large health claim; you are responsible for this amount.
Once the deductible is satisfied, most health insurance plans have a coinsurance feature - whereby you are splitting the bill with the insurance company for every dollar over the deductible. Typically you pay 20% of the claim/bill and the insurance company pays 80%. However, this is not forever! There is usually a stop-loss, a dollar amount that the 20% is applied to. If the stop-loss is $10,000 for example, and you have an 80/20 coinsurance, you will be responsible to pay $2000 after your deductible on the next $10,000 of claims. Once this 'stop loss' or maximum out of pocket is reached, the insurance company pays 100% of the bills until the end of the calendar year.
Most plans have you satisfy a new deductible starting January 1. (NOTE: Some plans have a 'Carry-over deductible' feature. With this feature, any portion of your deductible that is met in the last 3 months of the year (Oct, Nov, Dec), not only count towards that year's deductible, but also get CARRIED OVER to the next year's deductible. Check your policies to see if you have this! )
If you have a multiple people on your health plan - spouse, kids - you will want to check your policy to see what the limits are for a family. Most PPO plans limit the family deductible and coinsurance to a maximum of 3 per family. So whether you have 3 people or 10, you only have to satisfy a maximum of 3 deductibles. NOTE: One person will typically not meet more than ONE deductible per person/ year. The only exceptions that we are aware of are for HSA plans that have a COMBINED family deductible.
Again, if you are confused about how your plan works, call us. We are here to help...and you Don't need to wait until you have a claim to understand how your plan works!
State insurance laws protect you, the consumer. Among other topics, those laws define the circumstances under which a policy can be canceled or non-renewed. Depending on the type of insurance, these laws can provide you a lot of protection or very little.
Many states have mandated coverage for a long list of benefits; some companies recognize these laws, while others don't - and they don't have to if they are not domiciled in that state.
In most cases, Federal Law trumps state law. In the case of PPACA, the healthcare law specifically protects consumers from having policies rescinded or cancelled due to claims. For more information on the laws that might affect you, feel free to contact our office.