Managed Care Health Plan

You can typically obtain managed health care through your employer, a group such as a chamber of commerce, or as an individual through one of three options: (1) A Health Maintenance Organization (HMO), (2) a Preferred Provider Organization (PPO), or (3) a Point of Service Plan (POS). If you have the option to select one of these plans consider the following factors:

a. Health Maintenance Organization (HMO)

An HMO is a defined group of doctors and hospitals. HMO's can offer lower prices than other insurers partly because they sign up doctors and hospitals on contracts that give them volume discounts ranging from 10% to 40% on doctor services and hospital stays. Bigger HMO's can get larger discounts than smaller ones can. To gain access to specialists or hospital services, most plans require you to have the recommendation of a gatekeeper physician. Fees for services range from nothing to $30 and there is no deductible. The doctors may practice in a clinic or hospital, or work in private offices. All types of medical care is covered. The HMO plan usually has the lowest monthly cost.

b. Preferred Providers Organizations (PPO)

A PPO is a network of physicians and hospitals that agree to provide medical care to employers at a discount. You can also get care outside the network. The plan will reimburse you 80% to 100% of the cost of services if you use a doctor or hospital that is part of the network, or 50% to 70% for a service provided outside the network. The plan has a reasonable annual deductible that you must meet before you are reimbursed. The annual deductible is higher for access to physicians or doctors outside the network. Preventive health care services may be covered. Generally you are not required to have the approval of a gatekeeper doctor to gain access to specialists and hospital services.

c. Point of Service Organizations (POS)

A POS is a combination of an HMO and a PPO. The POS is a network of doctors and hospitals, but you can also opt for treatment outside the network. In either case, you must get the approval of a physician gatekeeper in order to access specialists and hospital services. You pay a flat fee from $15 to $35 for care within the network and you also pay an annual deductible. For care outside the network you pay between 20% and 50% of the charges. Preventive care is generally covered.

d. How To Evaluate The Doctors Of A Managed Care Network

To evaluate the doctors of a managed care network, ask the following questions:

• How many of the doctors are certified by one of the boards recognized by the American Board of Medical Specialists (ABMS)? You can verify the certification status of a particular doctor by calling the ABMS at 866-275-2267 (866-ASK-ABMS). The plan's Physician Directory should provide certification information. At least 70% of the doctors should have recognized certification.
  
  
• Determine whether the plan verifies all the details on applications completed by doctors in order to join the network. Also find out whether the plan has obtained a copy of each doctor's file from the National Practitioner Data Bank that has information on disciplinary action and malpractice suits. Find out how many doctors are rejected upon applying. Look for a rejection rate of at least 8%.
  
  
• After obtaining a copy of the plan's Physician Directory call a doctor you may know and have confidence in, and ask his opinion of the other doctors.
  
  
• Find out what percent of the doctors leave the plan annually. The average for PPO's is about 5%, while the average for HMO's is about 10%. Find out if there is an additional charge for continuing with a doctor who leaves until your treatment is completed.
  
  
• Select a plan where there are about an equal number of specialists and primary care physicians. If you think you will need a certain type of specialist make sure there is one on staff. If you want to select a specialist without prior approval, choose a plan that doesn't have a gatekeeper.
  
  
• If you have a doctor who you like who is outside the plan network, ask him to apply to join the network or to reduce his fees to make up for the additional cost to you.

f. How To Evaluate The Quality Of Care Rendered By Managed Care Providers

• To evaluate the quality of care rendered by managed care providers, make sure the plan has the answer to the following questions. No answer is a good indication that no one cares.
  
  
• Find out how many unplanned surgeries were performed the prior year and the total number of surgeries performed. The percentage of unplanned surgeries will let you know whether the doctors are detecting problems before they become acute.
  
  
• Find out how many patients had to be readmitted to the hospital after being out for no more than 30 days. This will let you know whether patients are being sent home too soon.
  
  
• Find out how long it will take to get an appointment and how long you will have to sit in the waiting room before you are seen.
  
  
• Find out how much time the doctors will spend evaluating your condition.
  
  
• Find out the average age of the participants in the plan. If you are approximately the same age, it is more likely that the services you need will be available.
  
  
• Find out whether the HMO has opted to be accredited by the National Committee for Quality Assurance (NCQA). You can call the NCQA at 1-888-275-7585 and request a free Accreditation Status List. The report will show whether your HMO was accredited for three years, one year, provisionally, or whether it failed accreditation. Because the HMO must pay a hefty fee to go through the review process (approximately $40,000), some HMOs opt not to be reviewed. If your health care provider is a PPO, find out whether it has opted to be accredited by the American Accreditation Program.
  
  
• Find out whether the plan takes a survey of plan participants regarding their satisfaction with the doctors and other aspects of plan services. Also determine if doctors receive an incentive if they get good patient reviews. A doctor that is incented for good patient reviews is more likely to focus on keeping patients happy.
  
  
• Find out whether the organization promotes preventative care through reminders by mail or telephone.
  
  
• Find out whether the plan has a formal complaint policy and a board of medical examiners that review the complaints. Also find out how many complaints are resolved within one month of submission.
• Be sure to thoroughly read the plan's coverage booklet. Find out whether the plan covers preexisting conditions, mental health care, and experimental treatments.
  
  
• Be sure to find out whether your friends and family who already belong to the plan are satisfied.
  
  
• If you already belong to a managed care plan be sure to ask for a second opinion or a new doctor if you have trouble getting approval for expensive tests or procedures to be performed. If you are denied a special treatment, appeal the decision and get a written explanation detailing why the treatment was denied so you can contest it if you want to. Ask that your appeal be reviewed by another specialist in the same field who is qualified to review your case. If the treatment denied was recommended by your primary doctors, be sure to have the doctor provide all the necessary support for why the treatment is necessary. If hospital services are denied while you are admitted, complain to the managed care department, patient advocate, or social worker. If you still don't get satisfaction, be sure to complain to your employer. If you feel you absolutely need the treatment that has been denied, get the treatment from a non-network provider and fight about the coverage later. Be sure to ask the non-network provider to lower its bill in light of your situation.
  
  
• Find out if the organization is run by a medical society or a large group of physicians who are inclined to make decisions based on good medical practice rather than good business practice.

g. Other Health Insurance Strategies

• If your health insurance has a maximum life time benefit, be sure it is at least $1,000,000.
  
  
• Typically, health insurance costs are lower when you participate in group health insurance plans. Group health insurance plans may be employer sponsored or available through professional associations.
  
  
• If your group insurance coverage is inadequate, look for other group coverage through a professional association or purchase supplemental coverage with benefits that are coordinated with your existing health policy. If your spouse has group insurance coverage, be sure you take advantage of it.
  
  
• If you terminate employment where you are covered under a group health insurance program, your employer must provide you with the opportunity to have a continuation of coverage for 18 months after your date of termination. Generally, you are responsible for paying the premiums. To qualify for this benefit you must work for a company that has at least 20 employees.
  
  
• If your termination is the result of a disability, your employer must allow you to purchase an additional 11 months of coverage for a total of 29 months. In addition, if you become covered under another employer's plan, your previous employer may discontinue your coverage only if the new plan fully covers any preexisting conditions you may have had. If the new plan has limitations on your preexisting condition, you will be covered by both the new and old plans.
  
  
• Beneficiaries of an employee who reaches age 65 and qualifies for Medicare must be entitled to an additional 36 months of coverage from the date the employee turns 65.
  
  
• If you cannot participate in group health insurance coverage, your only other option for coverage is through an individual health insurance plan. Consider the following points when purchasing individual health insurance coverage:
  
  
  • Reduce health insurance premiums by having a high deductible and co- insurance ratio.
    
    
  • Be sure health insurance coverage is guaranteed renewable. A guaranteed renewable policy will protect you from having the insurance terminated because of the number of claims filed, or because of deteriorating health.
    
    
  • Obtain coverage for college-age children and other dependents.
    
    
  • If you cannot obtain individual coverage because you are considered a high risk, contact your state insurance commissioner to see if the state sponsors coverage for individuals in your circumstances.
    
    
  • To reduce the cost of health insurance, participate in your employer sponsored Flexible Spending Account or Cafeteria Plan.
    
    
  • If you and your spouse both have family medical coverage at your places of employment, before one of you cancel coverage with one employer, make sure the plan has provisions allowing you back on the plan if the spouse who retains coverage becomes unemployed. Some plans require you to apply to get back on the plan within 30 days of the time your spouse loses a job; many plans require you to take a medical exam to regain coverage. If you reapply having a preexisting condition, you could end up without coverage.
    
    
  • If you work for a company with more than 50 employees within a 75 mile radius, you will be eligible for as much as 12 weeks of unpaid leave of absence following childbirth or adoption, to care for a seriously ill parent, child, or spouse, or to recuperate from your own illness or operation. Your employer will have to continue your health coverage during this time and guarantee your job or a similar one unless you are a key employee defined as the highest paid 10% of the employees. Certain tenure requirements, verification of illness, and advance notice apply.

h. Medicare

• Medicare is a federally funded health insurance program for eligible individuals. The program is funded by a payroll tax. You are eligible if you are age 65 and you have contributed to the program for at least 40 quarters (10) years. Medicare coverage is divided into two parts: Part A and Part B. Part A covers hospital charges, blood, and skilled nursing, home care, home health care and hospice care after a hospital stay. For 2001 you are responsible for paying a deductible of $792 during your first 60 days in a hospital. During the next 30 days (61st through 90th) you must pay up to $198 a day. For the next 60 days (91st to 150th) known as your reserve days, you must pay up to $396 a day. After 150 days you are responsible for all hospital charges. The 60 reserve days can only be used once in a lifetime. Once they are used, you have to pay all hospital costs after the 90th day during your next hospital stay. If you are released from the hospital or a skilled nursing home and are readmitted after 60 days you will have to meet the same deductible and benefit period again.
  
  
• To be eligible for skilled nursing home care you must meet four requirements: (1) The facility must be approved by Medicare, (2) your physician must prescribe that you receive skilled nursing care on a daily basis, (3) you must be admitted to a hospital for a least three days (including the day you leave the hospital) before you enter a skilled nursing home, and (4) after you leave the hospital you must be admitted to the skilled nursing home within 30 days for the same medical condition that you were originally hospitalized. If you meet these requirements, for 2001 Medicare will pay 100% of the charges for the first 20 days, and $99.00 a day the next 80 days (day 21 through 100). Beyond 100 days you are on your own. If you are released from a skilled nursing home and readmitted after 60 days, you obtain a new benefit period with Medicare paying 100% of the first 20 days, etc.
  
  
• Medicare Part B covers doctor's fees, medical services rendered while you are in the hospital, outpatient medical services, outpatient hospital services, home health care, and blood. For these services in 2001, you pay an annual deductible of $150 and 20% of the Medicare approved charges including the cost of prescriptions and most shots that you can administer yourself.
  
  
• To reduce your out-of-pocket costs use doctors who accept Medicare assignment. A doctor who accepts Medicare assignment will only charge you the amount Medicare agrees to pay. The maximum amount a doctor can charge you for a specific treatment is 115% of the Medicare approved amount.
  
  
• If you are eligible for Medicare, it is usually advantageous to elect Medicare part A and B. Part A provides hospital coverage and part B provides medical insurance. Part B is optional and costs $ 96 per month for 2010. You can continue to work past age 65 and still remain eligible for Medicare benefits.
  
  
• If you are over age 65 and you are ineligible for Medicare, you can purchase both part A and part B coverage for a monthly premium. Part A cost $ 500 per month for 2010 and part B costs $ 96.00 a month. You can continue to work past age 65 without it effecting your eligibility for Medicare benefits.
  
  
• As an alternative to the fee-for-service Medicare system, consider enrolling in a Medicare HMO. HMOs contracting with the Medicare program must provide the same coverage offered by fee-for-service Medicare plans, but Medicare pays them on a monthly prepaid basis for each participant. The same, and often additional benefits, are offered by Medicare HMOs. Once you enroll in a plan, it may charge you a nominal monthly premium and copayment instead of the deductibles and coinsurance amounts you would pay to a fee-for-service provider. In most cases, if you join an HMO, you will not need Medigap insurance because the HMO covers the cost of all or most all of the medical services. However, if you leave the HMO and return to fee-for-service after having canceled or passed up the opportunity to obtain a Medigap policy, you may not be able to obtain a Medigap policy if your health has deteriorated.
  
  
• If you are eligible for Medicare, you can elect to establish a Medicare + Choice Medical Savings Account in lieu of receiving Medicare benefits. The Secretary of Health and Human Services will make contributions to your account. You can use the monies accumulated in Medicare+ Choice MSA to pay for you medical services from medical providers of your choice. IRC 138 and IRC 220(b)
  
  
• For more information on Medicare, request the free Guide To Health Insurance For People With Medicare by calling 800-638-6833 and leaving your name and address.

i. Medigap Policies

• If you are over age 65 and eligible for Medicare coverage, consider purchasing supplemental Medicare gap insurance (a Medigap Policy) that pays some or all of the cost of medical bills not covered by Medicare Part A and B (known as the gap in coverage). You are guaranteed Medigap coverage if you apply for coverage within 6 months of enrolling in Medicare Part B. Consider purchasing one of the 10 standard Medigap policies authorized by the National Association of Insurance Commissioners. The 10 policies are categorized with the letters A through J. Each policy provides different types of coverage. Select a policy based on the following: (1) Your particular health care needs, (2) the benefits provided under health insurance you currently own, (3) whether or not your doctor accepts Medicare assignment, and (4) the amount of money you have to allocate to insurance premiums or to the costs of non-covered medical expenses. Once you select a policy (A through J) compare its cost at several different insurance companies. Be sure to find out what the cost of the policy will be as you grow older. A more expensive policy with stable premiums may be cheaper than a policy that's less expensive now but becomes unaffordable as you age. For more information on Medigap policies, request the free Guide To Health Insurance For People With Medicare by calling 800-638-6833 and leaving your name and address.

Chart

The basic benefit included in all plans consist of hospitalization Part A coinsurance plus coverage for 365 additional days after Medicare benefits end; medical expenses Part B coinsurance which is 20% of the Medicare approved expenses; and blood which consists of the first three pints used each year.

• Try to purchase Medicare gap insurance through an employer plan, group, or association, such as the American Association of Retired Persons (AARP).

j. Medical Savings Accounts

Health Savings Accounts

• If you are eligible for Medicare, you can elect to establish a Medicare + Choice Medical Savings Account in lieu of receiving Medicare benefits. The Secretary of Health and Human Services will make contributions to your account. You can use the monies accumulated in Medicare +Choice MSA to pay for your medical services from medical providers of your choice. IRC 138 and IRC 220(b)