If you’re uninsured, Part 2: The options

Welcome to Part 2 of our handbook for people who are uninsured. We’re planning several articles in this series, much as we have started publishing our “Ways to Save” series, and we’ll then  archive them on the site.

Here’s Part I of the uninsured series.

The best way to start shopping for insurance is to know your options. The world of insurance can seem bewildering, so let’s define the terms.

Catastrophic: Catastrophic health insurance is not full medical coverage. Instead, it provides coverage for emergencies—car crashes, serious illnesses that result in hospitalization or an emergency room visit, etc. It’s widely considered to be a low-cost alternative to an actual full health insurance plan.

High-deductible: A high-deductible plan has higher deductibles, meaning the amount you must pay before your insurance company will cover your costs, and lower premiums, meaning the monthly fee you pay to your insurance company. You pay less each month, but have to pay more before your insurance kicks in.

Low-deductible: This plan will cost you more each month, but your insurance company will reimburse more of your costs, should you need to visit a doctor, buy prescription drugs or go to the hospital or emergency room.

Family Plan: Some insurance plans also cover children of the insured person or the spouse, or both spouse and children. There are a variety of options.

Other useful terms:

HMO: HMO stands for  Health Maintenance Organization. This type of insurance plan is comprehensive; the HMO arranges for insurance through its own group of contracted doctors and health care professionals. It involves a premium payment. Additionally, there is a co-pay for all doctor’s visits, but it can be relatively low—something like $5 and up.  You must stay within your network to be covered. If you go out of network, costs can rise fast; typically you pay the full cost of out-of-network care.

PPO: PPO stands for Preferred Provider Organization. The providers in  the network have agreed to provide care for a contracted rate. When you visit a participating doctor, you’ll present a card, and most of your bill will be covered. Like an HMO, co-pays are usually required under this plan, with the co-pay generally either a set fee ($20 or $30) or a percentage of the bill. If you choose to go out of network, you’ll pay more: most plans have an out-of-network deductible, which you must pay, and then you are responsible for paying some part of the provider’s bill. Going out of network can be very expensive; the reimbursement rate depends on your coverage, but it’s typically higher, maybe considerably higher, than your network’s contracted rate.

POS: Point of Service plans are a combination of HMO and PPO. You decide whether to stay in network or go out. Insurers set the networks, and the co-pay works very much like an HMO or PPO. When you go out of network, typically you have to pay the full amount up front, and then submit the bill for reimbursement. The reimbursement rate depends on your coverage, but it’s typically higher, maybe considerably higher, than your network’s contracted rate.

EPO: Exclusive Provider Organization plans function like a PPO with one big difference: if you go out of network, you typically pay the entire cost yourself.

In-network vs. out-of-network

An in-network doctor is a provider who is under contract by your health insurance company to be accept an agreed-upon or negotiated rate  for the cost of the visit. An out-of-network doctor is one who is not contracted, and thus will charge a patient full price.  It’s important to know what doctors, hospitals and clinis are in-network so you don’t have  to pay the full rate out-of-pocket.

Why go out of network?

A patient might seek out-of-network care in the event of a medical emergency that necessitates immediate care from whatever doctor, hospital or clinic is close by. Alternatively, a patient may choose to use a primary-care doctor or other specialist who’s not in the insurance company’s network.

For many insured people, when their plan changes, they may find that a doctor or hospital they have been using is suddenly out of network, or a doctor or hospital may stop accepting a certain kind of insurance. It pays to ask. Every time.

Out of network doctors at in-network hospitals:

Unfortunately, it happens: A patient visits a hospital or clinic that is considered by the patient’s insurance company to be in-network, but  a provider who is considered out-of-network is supplied. (Anesthesiologists are often the topic of such misunderstandings.) The results can be devastating for the patient, who may be forced to pay the full out-of-pocket cost of the visit. This problem is prevalent in New York, and in 2009 then-Attorney General Andrew Cuomo launched a reform campaign to help consumers understand the costs of out-of-network coverage.

For more information and further reading:

http://www.healthcare.gov/compare/index.html

http://www.fairhealthconsumer.org/resources.aspx

Other options for uninsured adults and families in New York:

The health insurance you’re eligible to receive can sometimes depend on factors like your age and your income, or your profession, and it’s important to know where you fall.

If you’re under 26, you could be covered:

As part of the 2010  federal health reform bill, if you’re under 26, you are eligible for coverage under your parents’ plans if they have health insurance. The law includes insurance plans already in place — meaning if your parents already had health insurance at the time the law was approved, and you’re under 26, you’re eligible  for coverage. Read more here.

Next: Resources.