A: Understanding and Getting Health Care Coverage
A-1, Understanding and Getting Health Care Coverage
Types of Health Care Coverage
Commercial or Private Insurance
Federal Employees Health Benefits (FEHB) Program
A-2, Understanding and Getting Health Care Coverage
When choosing health care coverage, consider:
What types of coverage are available to me?
Do I qualify for Medicare/Medicaid/VA/Federal coverage or insurance?
Am I able to obtain insurance through my employer or the Consolidated Omnibus Budget Reconciliation Act (COBRA)?
Who in my household needs to be insured?
What is my health status; do my household members or I have any chronic health conditions or prescriptions that will affect my annual health care costs? Am I having any medical or emotional symptoms for which I do or will need evaluation and possible treatment?
Will I need care outside of my county of residence?
How likely is it that I will have anticipated or unanticipated health care expenses during the covered benefit period?
Do I qualify for subsidies or cost sharing reductions? (Marketplace only)
Does the plan have an FSA/HSA/HRA attached?
What are the premiums, co-pays, deductibles, co-insurance, and out-of-pocket maximums associated with the insurance plans I am considering or have available to me?
What is the plan’s network of providers?
Does the plan provide out-of-network benefits? If so, at what rate?
Do my providers, clinics, preferred hospitals, or outpatient facilities participate in the coverage I am considering?
A-3, Understanding and Getting Health Care Coverage
10 Essential Health Benefits ACA-Compliant Plans Must Cover
Ambulatory patient services (outpatient services)
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
A-4, Understanding and Getting Health Care Coverage
Affordable Care Act (ACA)
The comprehensive health care reform law which was enacted in March 2010 (also referred to as Patient Protection and Affordable Care Act). The law has three primary goals:
Make affordable health coverage available to more people. The law provides premium tax credits, also known as subsidies, that lower costs for households with incomes between 100% and 400% of the federal poverty level. Under specialized circumstances, those beyond the general guidelines may qualify for subsidies as well.
Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level. Not all states have expanded their Medicaid programs.
Support innovative medical care delivery methods designed to lower the costs of health care generally.
A-5, Understanding and Getting Health Care Coverage
The premium rates are based on the health claims experienced by the "community" as a whole. This community might consist of those covered by an association, such as the members of a trade association.
This is used to vary the cost of insurance premiums according to the age, gender, medical history, and claims experience of a household applying for health insurance. If a household is applying for coverage with a community rated plan, the amount they pay for their premiums is influenced both by the general health/claims history of the community covered by the plan, as well as the health/claims history of the household.
ACA vs Community Rated Plans
Since 2014, the Affordable Care Act has required health insurers selling ACA-compliant plans to use a modified form of community rating that allows premiums to vary mainly based on the enrollee's age. In addition, ACA-compliant plans are only allowed to charge older enrollees up to 3x what younger enrollees pay. (healthinsurance.org)
Why Ratings Matter
"Ted," a young, healthy, white male, is likely to experience lower premiums in an experience and community rated plan and to pay more in an ACA-compliant plan, which doesn't take his good health and absence of pregnancy risk into consideration.
Conversely, “Brenda,” a 56-year-old Black woman with high blood pressure and a history of breast cancer is likely to be quoted much higher rates for a plan that takes her risk factors for needing future health services into account. Brenda is more likely to cost the plan more than Ted over the benefit period, so the insurance company would assign a higher premium rate to her compared to Ted for a community and experience rated plan. More than likely, her premiums would be lower in an ACA-compliant plan.
A-6, Understanding and Getting Health Care Coverage
Explanation of Benefits (EOB)
A statement that tells you and your provider what the allowable amount is for your claim. Of the allowable amount, the EOB explains what you owe and what the insurance company will pay, if anything. It also tells you whether what you owe is a co-pay or co-insurance and how much is applied to your deductible and out-of-pocket maximum.
A-7, Understanding and Getting Health Care Coverage
Standalone health insurance policy that is not connected to job-based coverage. It is your only option if you do not qualify for government sponsored health care coverage such as Medicare or Medicaid and do not have access to affordable employer sponsored health insurance.
A-8, Understanding and Getting Health Care Coverage
Types of Plans
Health Maintenance Organization (HMO)
A type of health insurance plan that usually limits coverage to care from providers who work for or contract with the HMO. It generally will not cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMO networks tend to be much more restricted than Preferred Provider Organizations (PPOs).
Preferred Provider Organization (PPO)
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. Using providers outside of the network will typically cost more. PPO networks tend to be more extensive both geographically and within communities compared to HMOs.
A-9, Understanding and Getting Health Care Coverage
Pre-Authorization or Prior Authorization
This is also known as pre-certification. It refers to a process imposed by health insurance carriers where they must grant permission before you receive certain health care services, treatments, medications, surgeries, or durable medical equipment. Failure to obtain required pre-authorization can result in the insurance company refusing to pay for these services. However, even with pre-authorization, the insurance plan is not guaranteed to cover the cost.
A-10, Understanding and Getting Health Care Coverage
Refers to use of a health care provider that has a contract with your health insurance plan to provide health care services to its plan members at pre-negotiated rates.
Refers to a health care provider who does not have a negotiated contract with your health insurance plan. If you use an out-of-network provider, health care services could cost more.
A-11, Understanding and Getting Health Care Coverage
Signing Up for Health Care Coverage
The annual period when individuals can obtain, renew, change, or cancel their health care coverage. Missing an open enrollment period can put you at risk of not having health coverage for a full year until the next annual open enrollment period.
Special Enrollment Period
A time outside the yearly open enrollment period when you can sign up for health care coverage. You qualify for a special enrollment period if you have had certain life events, including losing health coverage, moving, getting married, having a baby or adopting a child, or if your household income is below a certain amount. Qualified individuals/families may enroll in Medicaid or the Children’s Health Insurance Program (CHIP) at any time.
A-12, Understanding and Getting Health Care Coverage
A health condition such as asthma, diabetes, or cancer, that you had before the date that your new health coverage starts. ACA-compliant plans cannot refuse to cover treatment for your pre-existing condition(s) or charge you more. However, individual insurance policies purchased before the ACA rules went into effect may still impose pre-existing condition exclusions.
A-13, Understanding and Getting Health Care Coverage
A formal order from your primary care provider for you to see a specialist or get certain medical services. If a referral is required by your insurance plan and you do not obtain one before receiving services, the plan may not pay for the services. Emergency services do not require a referral, regardless of plan type or network.
A-14, Understanding and Getting Health Care Coverage
Summary of Benefits and Coverage
A snapshot of a health plan's costs, benefits, covered health care services, and other important details about the plan.
A-15, Understanding and Getting Health Care Coverage
Unlike all other developed nations, we don't have a system of universal coverage, where everyone has health insurance from birth to death.
Universal health care coverage means that if you lose your job, are self-employed, work for an employer that doesn’t offer health insurance, are unable to work, or have chronic or serious health conditions, you can still get the care that you need paid for through insurance provided by the government. It means that you don’t have to ration your medicines or avoid going to the doctor because you can’t pay. It means not having to choose between food and medical care. It means that since they get paid enough to take care of patients, rural hospitals will be less likely to close. And if we look to other high-income countries for comparison, it means lower overall costs and better health outcomes than we have in the U.S. Plus, several other countries allow supplemental private insurance for those who wish to purchase it, and we could, too.
Another big problem in the U.S. is being underinsured. Nearly a quarter of working-age Americans are considered underinsured, which means that even if they technically have health care coverage, their out-of-pocket expenses are a barrier to care. In a study conducted by The Asclepius Initiative (TAI), 86% of those uninsured and 64% of those who were insured avoided, skipped, or stopped medical care or medications due to cost.
View the TAI Study Results: https://asclepiusinitiative.org/2022-survey-results-v2
Is universal coverage (guaranteed health care for everyone) socialism? No. Socialism is a form of government, not a form of health insurance. Providing health care for everyone is no different than providing public libraries, a police force, or a fire department.
For a comparison of the U.S. system to other countries, see: https://asclepiusinitiative.org/health-insurance-in-the-us-vs-the-world
These and associated educational materials have been developed using our available resources. They are not intended to serve as advice or recommendations on selecting a specific type of coverage or plan. Any errors or omissions are unintentional.
These materials were supported by funds made available by the Kentucky Department for Public Health’s Office of Health Equity from the Centers for Disease Control and Prevention, National Center for STLT Public Health Infrastructure and Workforce, under RFA-OT21-2103.
The contents of these materials are those of the authors and do not necessarily represent the official position of or endorsement by the Kentucky Department for Public Health or the Centers for Disease Control and Prevention.