Insurance Payers and Plans
Health insurance coverage is available for a broad category of medical
expenses. Because healthcare involves expenses related to facilities, services,
and supplies, there are various insurance plans to address individual medical
needs. The following is a summary of available insurance payers and plans.
Commercial Carriers
Commercial carriers are generally national in their geographic scope and
offer both group and individual plans. The types of contracts they provide vary
from carrier to carrier but can include hospitalization, basic, and major
medical coverage that can be provided by HMOs, PPOs, as well as
on a fee-for-service basis.
Blue Cross/Blue Shield
Blue Cross/Blue Shield plans typically operate in the state in which they are
based. Blue Cross provides hospital benefits and Blue Shield offers medical and
surgical benefits to individuals enrolled in their plans. Blue Cross and Blue
Shield plans offer various types of contracts, which may include basic or
supplemental benefits. The latter covers drugs (although often under a separate
plan), durable medical equipment, and certain benefits, such as psychiatric
care. In some Blue Shield plans, coverage must be renewed
annually.
Medicare Parts A and B
Medicare is a federal health insurance program that provides coverage for
people over the age of 65, blind or disabled individuals, and people with
permanent kidney failure or end-stage renal disease. The Medicare program is
administered by the Health Care Financing Administration (HCFA) and pays only
for medical services and procedures that have been determined as "reasonable and
necessary."
Medicare Part A covers inpatient hospital services and certain follow-up
care. This includes the cost of lab tests, x-rays, nursing services, meals,
semi-private rooms, medical supplies, medications, necessary appliances, and
operating and recovery rooms. Medicare Part A also covers home healthcare,
although there are strict eligibility requirements.
Medicare Part B covers physicians' services and supplies not covered by Part
A. Enrollees must pay a monthly premium that is set by the federal
government.
In many states, people covered under Medicare have the option of choosing
between managed care and indemnity plans.
Medicaid
Medicaid is a health insurance assistance program for some low-income people
(especially children and pregnant women) sponsored by both the federal and state
governments, although it is administered on a state-by-state basis. Coverage
varies from state to state although each of the state programs adheres to
certain federal guidelines. Some states require Medicaid beneficiaries to join
managed care plans.
CHAMPUS
CHAMPUS (Civilian Health and Medical Program of the Uniformed
Services/CHAMPVA.Veterans Administration) provides comprehensive health benefits
for families of uniformed service personnel and service retirees as a supplement
to military and Public Health Service care. CHAMPUS is a federally funded
program administered by the Office for the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).
Special State Programs
Crippled Children's Services, Children's Medical Services, Children's
Indigent Disability Services, and Children with Special Health Care Needs are
the various names of state-funded insurance programs that provide coverage for
children up to 21 years of age. These programs are designed for beneficiaries
with specific chronic medical conditions. Specific information about state
programs can be obtained by contacting the state's Department
of Health.
High-Risk Insurance Pools
High-risk insurance pools are associations that have been established to
provide medical coverage for individuals whose medical conditions prevent them
from obtaining private health insurance and who may not qualify for government
assistance. High-risk insurance pools are not available in all
states.
Insurance Plans
Basic Medical Plan
basic medical plan provides coverage for hospital-surgical-physician
services. This is often referred to as the "first part" of an
insurance plan.
Major Medical Insurance
Major medical insurance plans offer broad coverage of most medical expenses
up to a high maximum benefit and are offered to both group and individual
insurance markets. Some plans may have limitations related to specific services.
These plans usually have deductibles and coinsurance.
Supplemental Major Medical Insurance
Supplemental major medical insurance covers those expenses not otherwise
covered by the basic medical plan. These plans usually cover services at a set
percentage (80% or more) once the beneficiary has met the deductible designated by the policy.
Comprehensive Major Medical Insurance
Comprehensive major medical insurance plans are the most common plans
available under group health insurance. This type of plan combines both basic
and major medical and usually pays for approved services in a calendar year
after a deductible has been satisfied. Most comprehensive plans have lifetime
maximums of $1 million or less.
Both supplemental and comprehensive plans have common provisions, such as
deductibles, coinsurance, lifetime maximum benefits, and covered expenses. In
addition, other forms of supplemental coverage are available in both group and
individual insurance markets. Examples of other supplemental insurance include
hospital indemnity, dental, vision and prescription. Prescription drug insurance
is often part of an employer/group policy, but may contain exclusions for
certain types of drugs or therapies.
Consolidated Omnibus Budget Reconciliation (COBRA)
As of April 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA)
mandates that employers who sponsor group health insurance plans must offer a
continuation in coverage to employees and their families under certain
circumstances. Individuals are entitled to continued coverage if their hours of
work have been reduced (and they no longer qualify for health
benefits) or if their employment has been terminated (for reasons other than
gross misconduct).
Prepaid, Managed Care, or Capitated Health Insurance Plans
Prepaid, managed care, or capitated health insurance plans provide coverage
for the medical services of "participating" physicians to groups of individuals
enrolled in the plan. Premiums are paid in advance on behalf of the
beneficiaries or reduced rates may be provided on a fee-for-service basis.
The three major types of managed care plans are health maintenance
organizations (HMOs), preferred provider organizations (PPOs), and
point-of-service (POS) plans.
These plans often restrict access to specialized services. Such restrictions
usually require prior approval before certain medical care is provided; second
opinions before surgery can be authorized; limitations on the use of certain
medical products or devices; and requirements related to the facilities and
physicians that provide the care.
It is important to note that the managed care arena is rapidly developing
and, therefore, no generalization is ever completely accurate. Individuals
covered under such plans should seek policy interpretations from their
employer's benefit personnel, insurance carrier representative,
or a representative of the insurance commissioner's office.
Conversion Policy
Conversion policies are available through commercial insurance companies.
These policies provide a means of converting coverage for a dependent under a
parent's group plan to an individual policy. The time limit for the conversion
varies, depending on the provisions of the group plan. The advantage of such
conversion policies is that pre-existing condition requirements
are usually automatically waived.
REFERENCES:
Choosing and Using a Health Plan. U.S. Department of Health and Human
Services and the Health Insurance Association of America. AHCPR Publication No.
97-0011, March 1997.
Guide to Health Insurance. The Health Insurance Association of America,
Washington D.C., 1997.
Fundamentals of Health Insurance (Part A). The Health Insurance Association
of America, Washington D.C., 1997.
A Guide to Insurance Coverage for People with Hemophilia. Forbes Communications, 1990.