Reprinted from the Health District's quarterly publication mailed to district residents (Fall 2004)
TOPIC: So. You're covered. But for what?
What you need to know about health insurance
 
by karin meyer

It used to be that if you signed up for health insurance, you were pretty much covered.

Those carefree days are over, my friend. In fact, they’ve been gone for a few years now.

But, if you’re like many healthcare consumers, you may still be stuck in the mind-set that health insurance, like a good night’s sleep, will take care of everything, no questions asked.

Leaving the details to chance is not healthy for you — or business, for that matter. That’s why one Fort Collins employer is considering the idea of offering “Health Benefits 101,” a training on how health insurance works and how its 191 employees can make best use of it.

“It’s out of sight, out of mind – till they need it,” says Jenny Briggs, benefits administrator at New Belgium Brewing Co.

“They start getting bills in the mail, and they say, ‘I have health insurance. Why am I getting bills?’ ” she says. “People don’t understand how deductibles work. They don’t understand plan structures.”

New Belgium’s interest in having educated healthcare consumers is obvious: they want employees to stay healthy. But workers at the employee-owned company have something more at stake: Making the best use of services covered by their insurance keeps costs in check and contributes to a healthy future for the company, and themselves.

“When you have strep throat, don’t go to the emergency room,” Briggs tells employees. “There’s urgent care and other clinics that can take care of those needs. You can help keep your costs and the company’s costs down.”

For consumers, it pays to be educated about health insurance benefits. Caught unaware of the fine print in the benefits manual can mean paying a hefty price: you foot the bill, not your insurance company.
“They need to understand what their responsibilities are,” says Briggs, “or they will get stuck with some of the costs.”

Glossary of Terms

Copayment: You pay a flat fee every time you receive a medical service (for example, $20 for every visit to the doctor). The insurance company pays the rest.

Coinsurance: The amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.

Covered Expenses: Most insurance plans, whether they are fee-for-service, HMOs or PPOs, do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy.
Deductible: The amount of money you must pay each year to cover your medical care expenses before your insurance policy starts paying.

Exclusions: Specific conditions or circumstances for which the policy will not provide benefits.

Maximum Out-of-Pocket Expense: The most money you will be required to pay a year for deductibles and coinsurance. It is a stated dollar amount set by the insurance company, in addition to regular premiums.

Pre-existing Condition: A health problem that existed before the date your insurance became effective.

Premium: The amount you or your employer pays in exchange for insurance coverage.

Source: Agency for Healthcare Research and Quality www.ahrq.gov/consumer

No question, health insurance is daunting stuff. Given that fall is when many employers offer open enrollment for health insurance and knowing that you, too, may be asked to consider making changes to your coverage, we asked local experts for what to look for in a health plan — and what to look out for.

Who needs health coverage?

When it comes to choosing a health plan, one size doesn’t fit all. A family has needs different than a couple or single person. Find a plan that fits your needs and budget.

“Each family needs to see themselves as a standalone entity that comparison-shops for health insurance like they would for a car or home appliance,” says Janet Benavente, an extension agent in Consumer and Family Science at Colorado State University’s Cooperative Extension. “Don’t assume anything (in a health plan) because there is so much change.”

When employees ask Gwen Feit, benefits technician for the city of Fort Collins, for help in choosing a plan, she asks them to consider:

• What is your household like? How old are family members and what are their health needs? Do you have small children who need shots and make frequent trips to the doctor? Consider an HMO or a plan that has good well-baby coverage. Do you or someone in your family have chronic health problems? Be prepared to pay more out-of-pocket expenses. Are you expecting or planning for a baby in the next year, or are you recently married or divorced? Your plan will need to reflect those life events.

• Weigh costs vs. benefits of each plan. If you’re healthy and choose a high deductible and no copays, do you have money saved to cover your deductible in an emergency? Or would you benefit from a lower deductible with copays? See checklist for services you will likely use.

• How important is choice? Plans that allow you the most choices in doctors and care tend to cost more than plans that limit choices. Plans that help manage care usually cost you less, but you give up some freedom of choice. Staying “in network” will lower your out-of-pocket expense.

Look closely at covered expenses

Health plans often make changes to cut costs. Here are some:

 • Prescriptions: Plans often have different copays depending on whether you choose generic, brand-name or nonformulary prescriptions. Certain drugs can be considered covered by some insurance plans, but not by others. Some plans offer mail order as a way for consumers to save money on drugs they take routinely.

• Preventive care and health screenings: Some plans cover routine care such as adult exams and well-baby visits; others do not. Some have added wellness benefit maximums. For example, if your plan has an annual $300 wellness benefit and your mammogram plus other screenings add up to $400, you will be responsible for paying the $100 difference.

• Medical coverage in auto accidents: Colorado recently switched from a no-fault system to a tort system. A key difference is that auto insurance no longer automatically includes medical coverage. Check if your health plan covers medical bills from a car crash.

• Precertification and referrals: Some plans require that you or your doctor precertify, or call ahead for approval from the insurance company, for certain types of procedures. Other plans require that you get a referral from your primary-care doctor before you can see a specialist.

• Chiropractic care, physical therapy and help for mental health and substance abuse: Check the fine print. In these cost-cutting times, coverage may have been eliminated or limited to a set number of sessions.

Exclusions

Consumers often overlook the list of exclusions, or services not covered, in their health plan summary. Examples might include coverage for contraceptives other than birth control pills, eye care, foot care, dental care, experimental care and infertility treatments.

Emerging trends

Insurance experts report a growing interest in health savings accounts, which allow people with high-deductible insurance plans ($1,000-$2,000) to set up tax-free accounts to cover other medical expenses. Another trend is self-directed health plans. Employees get a flat dollar amount per year to spend on healthcare as they see fit. The idea is to empower consumers to consider what services they need and value most, says Chris Campbell, a broker with Brown & Brown in Fort Collins.

Get involved

Each year businesses set benefits meetings so that employees can learn about health plan changes and ask questions. Make use of these opportunities, says New Belgium’s Briggs.

It’s often said that what insurance offers is peace of mind — but only if you understand what it covers. Checklist for comparing your health plans
Read about one healthcare consumer's experience