Medical Insurance Blog

Anti-Trust Exemption Gone for Medical Insurance Companies

Since 1945, the medical insurance industry has been exempt from the anti-trust laws that were passed.  Anti-trust laws are applicable to almost every single industry.  On February 24, 2010, the Health Insurance Industry Fair Competition Act was voted on, and the results were 406-19, which made the act pass that will expose medical insurers to the anti-trust laws.

Medical insurance companies say that the law is not needed for their industry.  But an incident that happened in New York shows that it is absolutely needed.  The incident involved the terminology found in many medical insurance plans: "usual and customary".  Basically, this means that the insurer will pay a fee that is typically charged by a particular physician for a particular procedure, OR the fee that is usual for a particular procedure which is charged by the majority of doctors with similar training and experience within the same geographic area, whichever is LESS.

The Attorney General in New York looked into who was behind the figures that made up "usual and customary".  It turns out that the figures came from a database called Ingenix, which is one of UnitedHealth UNH's subsidiaries.  This database purposely skewed the rates down via data collection that was faulty, bad pooling processes, and with the absence of audits.  Medical insurers would then use this faulty low rates for their reimbursements.

So Many Acronyms…Finally a Sensible Guide For Medical Insurance Plans

Medical insurance plans are a confusing mass of acronyms and insurance industry jargon. This article breaks down the four major types of medical insurance plans in plain English and with no fluff.

Medical insurance plans have more acronyms than the federal government. With all the talk of HMOs, PPOs and a whole other host of abbreviations, it isn't always easy to understand exactly what each of these medical insurance plans are all about. What consumers need is a straight-forward guide to the major types of health insurance plans, including what it is and how it differs from the other main types.

If you're fed up with rhetoric and overwhelmed by all the political debate and you just want simple answers to your simple questions, then you've found the right article. Below is a brief overview of each of the four major types of medical insurance plans, plain and simple.

Preferred Provider Organization (PPO): With PPO medical insurance plans, the full expense of the medical treatment is covered as long as the treatment is provided by a doctor or hospital that belongs to the PPO's network of providers - hence the term "preferred providers." Treatment that is obtained outside the network is covered at a reduced rate. It is the patient's responsibility to make up the difference.

Health Maintenance Organization (HMO): HMOs place considerable restrictions on the non-emergency treatments that a patient may obtain. The upside of an HMO, however, is that the premiums are significantly lower than other medical insurance plans. Minimal paperwork is another benefit of an HMO plan.

With HMO medical insurance plans the patient pays a monthly premium. Sometimes there is a small co-payment. Patients have a primary care physician who then refers them to specialists when necessary.

HMOs are somewhat controversial because, the argument goes, doctors have a financial incentive for reducing the amount of medical treatments provided to the patient.

Fee-for-service: A fee-for-service plan is the traditional type of medical insurance plan. With fee-for-service medical insurance plans the patient is able to choose any doctor they want and can change doctors at any time.

The patient pays a monthly fee which is called a premium. Also, the patient has a deductible, which is a set amount of money the patient must pay out of pocket for medical treatment before insurance payments kick in.

Once the deductible has been met, the insurance company pays a portion of the bill. For example, the insurance company might pay 80% while the patient pays 20% of the final bill for the treatment. Often there is a ceiling or cap on the amount of out-of-pocket expenses the patient must pay, at which point the insurance company pays 100% of the bill.

Point-of-Service Plans (POS): POS medical insurance plans are actually indemnity-type options which are offered by many HMOs. With a POS plan, the policy holder can elect to see a physician outside of the network and still receive some coverage while making a co-payment. Because of this, POS plans are often described as being a combination of an HMO and a fee-for-service plan.

If the patient's primary care physician makes the referral, then the insurance company covers most or all of the bill. The patient chooses their primary care physician from members of the plan's network.

While these overviews paint a good general picture of how each medical insurance plan operates, consumers should always conduct careful research before choosing their health insurance coverage. Even within a general category, such as a PPO, there can be considerable differences in coverage, co-pays and other critical issues.

Medical Insurance Terms Made Simple

When you are trying to find the most affordable medical insurance, you need to understand some basic insurance terms so you know you are comparing apples to apples and coming up with accurate answers. Several terms are very commonly used in medical insurance policies that can reduce the confusion and make it much easier to choose the best coverage and most affordable health coverage available. 

 

• Benefit - the amount the insurance company pays when the insured suffers a loss
• Benefit period – the benefit period is the amount of time involved in an individual claim. In the case of hospitalization, for example, the benefit period begins the first day of the hospital stay and ends when the patient is released from the facility. The benefit period will often extend for up to 60 days after release from a hospital or other qualified facility, counting any return to the facility as part of the original claim.
• Cafeteria Plan – a plan that offers a choice between two or more benefits or a choice between a benefit or cash
• Claim – a request by an individual or their provider to the insurance company to pay benefits for a loss
• COBRA - a federal law that allows employees to continue their insurance coverage, through self-pay, after it would normally terminate for up to 18, 24, 29 or 36 months. (COBRA insurance is generally expensive and not an affordable health coverage option for most people.)
• Co- Payment – a small charge the insured pays at the time medical service is received. Co-payments do not count toward deductible or out of pocket maximums.
• Deductible – the amount of covered expenses the insured must pay out of pocket before the insurance company pays. Choosing higher deductibles can help with affordable medical insurance premiums.
• Flexible Spending Accounts: special accounts typically funded by an employee’s salary reduction to help pay certain expenses not covered by the employer’s group health plan or insurance contract. The advantage of these accounts is that after-tax dollars are converted to before-tax dollars, thereby reducing the actual cost of expenses.
• Grace Period: time period that follows the premium due date when the coverage and policy remain in force.
• Health Maintenance Organization (HMO): a medical organization providing a wide range of widespread health care services for a specified group of enrollees for a fixed, pre-paid premium.
• Managed Care:  coordination of financing and delivery of health care services to produce quality yet affordable health care coverage. Managed care puts limits on the use of services and the charges of providers.
• Out-of-Network Care: medical services obtained by managed care plan members from non-contracted health care providers. In many plans, such care will not be reimbursed unless the insured obtains previous authorization
• Out-of-Pocket Maximum: maximum dollar amount an insured is required to pay under a plan.
• Preferred Provider Organization (PPO): managed care arrangement consisting of a group of hospitals, physicians and other providers contracted with an insurer, employer or other group to provide health care services to covered persons in exchange for prompt payment and higher patient numbers.

While there are many other terms used throughout the medical insurance field, these are some of the ones you can expect to find. Understanding these and other common insurance terms will help you determine the most affordable medical insurance for your individual needs.