As a member of the rare disease community—and even if you are not—it is important to understand health insurance even though it can be a complicated and challenging subject.
Health Insurance 101
Health insurance is a way to pay for healthcare. If the policyholder (the patient, patient’s parents, or a caregiver) pays the premiums, then the insurance company (such as Aetna, Blue Shield, UnitedHealthcare, etc.) will cover many of the costs associated with your health needs. Think of premiums as one of the costs of having a plan. This amount is paid regularly (bi-weekly, monthly, quarterly, annually) by the policyholder.
Insurance premiums, like most other medical expenses, are not tax deductible until they exceed 7.5 percent of a person’s income. However, if self-employed or using a flexible spending account, a tax break can be given without reaching that threshold.
But remember: When considering plans, the lowest premium isn’t always the cheapest plan. What the insurance covers is just as important as, and sometimes more important than, what is paid up front and the cheapest plan is the one with the best price for the benefits you are most likely to use.
In addition to premiums, there are other commonly used insurance terms that represent additional costs to the policy holders, like deductible, co-payment, and co-insurance. Read helpful definitions of these and other terms through Healthcare.gov’s Coverage to Care: A Roadmap to Better Care and a Healthier You and UnitedHealthcare’s Health Insurance 101 Glossary.
Want more information on Health Insurance 101? Watch the RARE Webinar series on Navigating Health Insurance Issues for additional information on this topic.
Types of Insurance
There are two different types of health insurance: public and private. Public insurance is provided by the government and includes Medicare (for those 65 or older or with disabilities) and Medicaid (for those with low income). Learn more about Medicare, Medicaid, Supplemental Security Income (SSI), and Disability in the Parenting a Child with a Life-Limiting Illness Toolkit.
Private insurance is insurance offered by for profit companies. Private insurance is offered through employer-based plans, healthcare.gov for those individuals who need to purchase private insurance when employer based insurance is not available, and directly from private insurance brokers. If an employer offers insurance, consider using it. Group coverage, particularly when it’s employer-subsidized, is almost always a better deal than anything obtained independently.
Young adults covered under a private plan through a parent’s employer can now remain on that plan until age 26, whether or not they are a student, live at home, or are married. Many young adults with rare conditions may need more time to complete school and start jobs with their own coverage, so this extension of dependent coverage is helpful. Parents should check with their insurance, as they may need to complete additional paperwork to maintain this coverage.
Young adults who are not covered through an employer or parent’s employer, but do not qualify for Medicaid in their state, are now able to purchase insurance through a state or federal “marketplace.” They can start this process at Healthcare.gov. There are specific times for open enrollment, but it may be possible to take advantage of special enrollment based on certain life events, like losing a job, getting married, or turning 26. Young adults can find assistance online from a local agency, a hospital navigator, a social worker who is part of the healthcare team. If enrolled in an institution for higher learning, you may use the student insurance offered.
Employees who lose their job at a company with 20 or more employees under the federal law called the Consolidated Omnibus Budget Reconciliation Act, or COBRA, can remain on the ex-employer’s group policy for typically 18-36 months, along with their partners, dependents, and adult children under 26. However, they will now be responsible for covering the full premium, and this will be more than the cost the employee had previously been paying. Enrollment in COBRA must be done within 60 days after the job loss.
If possible, a young adult may want to maintain COBRA until they find more affordable insurance elsewhere. For more details on COBRA, visit the United States Department of Labor Website.
Comparing Insurance Plans
Benefits and costs vary widely from plan to plan, so if choices are available, examine each one carefully to identify the most appropriate one based on its coverage, premium rate, co-insurance and co-pay costs, drugs included in the formulary, and physicians and hospitals available in-network. Use Seattle Children’s Hospital’s Center for Children with Special Needs’ Health Insurance Chart to fill out information and compare plans more easily. Keep in mind that dental and vision insurance may be included within the plan, or they can be separate policies.
Insurance may be expensive, but having none can be even more expensive. There are sensible ways to save money on insurance, but skipping coverage is not one of them. Medical bills from even a minor car accident can deplete savings, while those from a major illness, such as a rare disease, can push one into bankruptcy.
It is important for young adults to investigate their current insurance and if it might end. It may end when the young adult turns a certain age (if on a parent’s plan), if they are no longer a student (if using a college-based plan), or when they change jobs.
It is also important to understand that individuals with a rare disease cannot be denied health coverage because of their illness or any other pre-existing condition. This does not mean, however, that an insurance policy will cover particular providers or treatments. You may need to document your needs and fight for coverage for certain treatments or care from certain specialists.
It is also important for patients to understand what their plan covers and what it does not. Here are some questions to ask yourself when reviewing insurance plans:
• Are my physicians in-network? Using out-of-network providers costs more, and usually these costs do not apply to the maximum annual out-of-pocket expenditures (i.e. the deductible). However, seeing an out-of-network provider can be necessary due to travel, a plan’s limited network, or the special needs of a patient that can only be met by specific specialists who are out-of-network. It is important to recognize these costs and be prepared to cover them when adequate physicians are not available in-network.
Insider Tip: “Exceptions can sometimes be made so that patients can see out-of-network providers at an in-network rate. This occurs in special cases when the insurance company agrees that it is a vital medical necessity for a patient to go out-of-network,” says Julie Raskin, Executive Director of Congenital Hyperinsulinism International. “You can try and set up this kind of arrangement by first connecting with the physicians or specialists who will be providing the care. In many cases they will write a letter of medical necessity, and these efforts can be supported by the staff of the patient advocacy organization for your rare disease.”
• Are out-of-network benefits available? Some benefit plans cover services received from out-of-network providers; others do not. For instance, many HMOs, or health maintenance organizations, that provide or arrange managed care for health insurance, do not reimburse out-of-network providers at all. This means that the patient is responsible for the full amount charged by the doctor.
• Is a primary care doctor needed, and are referrals needed to see a specialist? A requirement for those with HMO plans, referrals help primary care doctors keep track of the care their patients receive. Most plans now expect patients to have a primary care doctor who will help coordinate the rest of the patient’s care (this may have been a pediatrician when a patient was younger). For some patients with rare diseases, however, they may rely on a specialist’s expertise to do this.
• Are your rare disease specific needs being met by the plan? For patients with rare diseases, determining coverage needs can be tricky. Make sure to read the insurance policy carefully and see what restrictions, limitations, and benefits are offered. Some plans will assign a case manager to those with complex health conditions, to help coordinate care and keep costs down.
• What is the co-pay? A co-payment (or co-pay) is the fixed amount paid every time a patient visits a doctor, laboratory, ambulatory care center, hospital, physical therapist, emergency room, pharmacy, or other healthcare professional. These are usually higher for specialists than primary care physicians, and the amount varies depending on the insurance plan.
Once an insurance plan has been selected, make sure to keep a copy of the insurance card at all times. It will be needed for doctor visits or emergencies. The cards also have phone numbers on them that can be useful when policy-related questions arise.
Patients denied coverage for a needed therapy, treatment, or resource should not take “no” for an answer. They should ask for the exact reason for the denial, collect all documentation that explains the need for treatment, and consult their insurance policy for the proper appeals process. Watch the RARE Webinar series on Navigating Health Insurance Issues for additional information on this topic.