Health care reform

Health insurance is an agreement between you and your insurance company. You buy an insurance policy that requires monthly or annual payments. In return, the company guarantees payment for part of your medical expenses when you get sick or hurt.

When you have insurance, you pay some costs and your insurance plan pays some.

• Premium is a fixed amount you pay to your insurance plan, usually every month. You pay this even if you don’t use medical care that month.
• Deductible is the amount you pay for medical care before the insurance company starts to pay its share. Once you meet your deductible, your insurance company begins to cover some costs of your care. Many plans provide preventive services and sometimes other care before you’ve met your deductible.
• Copayment is a fixed amount you pay for a medical service after you’ve met your deductible. For example, after meeting your deductible, you may pay $25 for a visit to the doctor’s office that would cost $150 if you didn’t have coverage. The health plan pays the rest.
• Coinsurance is similar to copayment, except that it is a percentage of the costs you pay. For instance, you may pay 20% (or $20) of the cost of a $100 medical bill and the health plan pays the remainder.

• No one plans to get sick or hurt, but most people need medical care at some point in their lives. Health insurance covers these costs and protects you from very high medical expenses.
• There are other important benefits of health insurance; plans available in the Marketplace (and most other plans) provide free preventive care, like vaccines, screenings and checkups. They also cover some costs for prescription drugs.
• Health insurance protects you from high, unexpected costs. Did you know the average cost of a three-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7,500? Health coverage can help protect you from costs like these.

Insurance coverage protects you from high medical costs two ways

• Out-of-pocket maximum. This is the total amount you’ll have to pay if you get sick. For example, if your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, coinsurance and copayments, the plan will pay for any covered care above that amount for the rest of the year.
• No yearly or lifetime limits. Health plans in the Marketplace can’t put dollar limits on how much they will spend each year, or over your lifetime, to cover essential health benefits. After you’ve reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit. People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.

There are two basic types of health insurance companies:

• Private insurance companies such as MercyCare Health Plans
• Government-sponsored plans such as Medicare and Medicaid.

There are four categories of Marketplace insurance plans that help you choose a plan that’s right for you. When you compare Marketplace insurance plans, they’re put into four categories based on how you and the plan can expect to share the costs of care:

• Bronze
• Silver
• Gold
• Platinum

All Marketplace insurance plan categories offer the same set of essential health benefits. The categories do not reflect the quality or amount of care the plans provide. The category you choose affects how much your premium costs each month and what portion of the bill you pay for things like hospital visits or prescription medications. It also affects your total out-of-pocket costs—the total amount you’ll spend for the year if you need lots of care.

Note: The Marketplace also offers “catastrophic” plans to people under 30 years old and to some people with very low incomes.

As with all health plans, you’ll have to pay a monthly premium. But it’s also important to know how much you have to pay out-of-pocket for services when you get care.

• Premiums are usually higher for plans that pay more of your out-of-pocket medical costs when you get care. For example, if you have a Gold plan, you’ll likely pay a higher premium, but may have lower costs when you go to the doctor or use another medical service.
• With a Bronze plan, you’ll likely pay a lower premium, but you’ll pay a higher share of costs when you get care.
• Platinum plans will likely have the highest monthly premiums and lowest out-of-pocket costs. The plan will pay more of the costs if you need a lot of medical care.

In general, when choosing your health plan, keep this in mind: the lower the premium, the higher the out-of-pocket costs when you need care; the higher the premium, the lower the out-of-pocket costs when you need care.

Think about the health care needs of your household when considering which Marketplace insurance plan to buy.

Do you expect a lot of doctor visits or need regular prescriptions?

• If you do, you may want a Gold or Platinum plan.
• If you don’t, you may prefer a Bronze or Silver plan. But, keep in mind that if you get in a serious accident or have an unexpected health problem, Bronze and Silver plans will require you to pay more of the costs.

A key feature of the Affordable Care Act is the requirement that all people be covered by a health insurance plan—either purchased individually, provided by an employer or provided by the government. This requirement is called the “Individual Mandate,” and the Exchange acts as a Marketplace for purchasing health insurance. It’s important to note that this does not affect people who receive health care coverage through Medicare.

Any health insurance company selling on the exchange must be a Qualified Health Plan (QHP), certified by the federal government to sell in this Marketplace.

To make sure that everyone has health insurance, the federal government provides tax credits to most people who purchase health insurance on the Exchange. The amount of assistance will depend on family size and income and where they live. The cost of living is substantially higher in Alaska and Hawaii, so the tax credit will be adjusted for residents of those states.

The amount of the tax credit varies by family size and income.

If you have job-based health insurance you like, you can keep it. You’re considered covered. You are able to change to Marketplace coverage if you want to. Any job-based health plan you currently have qualifies as minimum essential coverage. You don’t need to change to a Marketplace plan in order to avoid the fee that uninsured people may have to pay. If you’d like to explore Marketplace coverage options, you can, but there are several important things to consider:

With most job-based health insurance plans, your employer pays a portion of your premiums. If you choose a Marketplace plan instead, your employer does not need to make a contribution to your premiums. You should consider this carefully before comparing Marketplace plans.

If you decide to check out Marketplace plans, be aware that you may not qualify for lower costs on your monthly premiums and out-of-pocket costs, even if your income would qualify you otherwise. Whether you qualify depends on what kind of coverage your employer offers. If your job-based coverage is considered affordable and meets minimum value, you won’t be able to get lower costs on premiums or out-of-pocket costs in the Marketplace. This is true no matter what your income and family size are. Your employer can tell you whether the insurance plan it offers meets minimum value and can provide you with information to determine if the plan is considered affordable to you.

If you do not qualify for lower costs in the Marketplace, and your employer does not pay part of your premiums on the Marketplace, be sure you take these things into account before you consider choosing a plan other than your employer’s.

Visit Healthcare.gov for the federal poverty guidelines for the 48 contiguous states and the District of Columbia. The 100 percent column shows the federal poverty level for each family size. The columns that follow represent income levels that are used as guidelines for health programs, including the health insurance exchange. More information can be found at Healthcare.gov.

A health insurance exchange is a Marketplace. In fact, the federal government is increasingly using the term “Marketplace” rather than “exchange.” We’ll use these words interchangeably, so you can become familiar with each. A key feature of the Affordable Care Act is the requirement that all people be covered by an insurance plan—either provided by an employer, the government or purchased individually.

Most Wisconsin residents won’t purchase insurance through the health exchange. They’ll continue to get their insurance from a private plan provided by their employer or from a government program such as Medicare or Medicaid.

As of Oct. 1, 2013, Wisconsin residents have the opportunity to buy health insurance from companies that have been approved to compete in this new marketplace. The plans cover individuals and employees of small businesses and became effective Jan. 1, 2014.

It is similar to buying a plane ticket or reserving a hotel room online. You enter basic information about your income and family size and are able to select a plan, offered by a participating insurance company, that seems best for you and your family. Individuals and families whose income falls within certain limits qualify for help paying for health insurance premiums and out-of-pocket costs. Also, the exchange directs lower-income people to Medicaid, the government health insurance program for low-income individuals and families.

No. People who are unable to enroll online are able to get help, or can use paper enrollment forms.

No. You can continue to purchase individual health insurance. But each of the health plans offered on the Exchange include an essential set of benefits that provide comprehensive health care services with different levels of cost sharing. Also, any health insurance plan sold on the Exchange must be a Qualified Health Plan (QHP), certified by the federal government to sell in this marketplace. Think of it as another level of consumer protection.

If you’re an employee of a small business that elects to purchase insurance through what will be called a SHOP exchange (Small Business Health Options Program), your employer will pay a set fee to the federal government and your cost will be the difference.

There are four types of plans based on the level of benefits—bronze, silver, gold and platinum. Bronze is the least expensive, platinum the most costly. It’s worth noting that no matter which plan you select, there is a list of “essential benefits,” developed by the Obama administration and states. Those include hospital, emergency, pediatric, drug, lab services and other care.

Insurance companies are now required to provide at no additional cost some preventive care such as screenings and vaccinations. There are no longer lifetime limits on health coverage. And it is illegal to exclude someone from coverage because of a preexisting condition such as asthma or diabetes.

Rates on the Marketplace vary based on family size, geography, age and tobacco use.

Most middle- and low-income people who purchase health insurance on the exchange are eligible for government tax credits to help pay their insurance premiums. These credits are based on income and family size. Anyone who earns less than 400 percent of the federal poverty level gets tax credit if they purchase insurance on the health exchange. The level of tax credit depends on income and family size. On this website, you’ll find a chart you can use to calculate how much assistance you can expect to receive. It’s important to note that the tax credit will be used to lower your monthly premium, so you won’t receive a check from the government.

A contract that requires your health insurer to pay some or all of your health care costs in exchange for a premium.

An exchange is a Marketplace. Wisconsin makes use of an exchange established by the federal government.

Maximum amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance” or “negotiated rate.” If your provider charges more than the allowed amount, you may have to pay the difference (see balance billing).

When a provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. A preferred provider may not balance bill you for covered services.

Your share of the costs of a covered health service, calculated as a percent of the allowed amount for the service. You pay co-insurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20 percent would be $20. The health insurance or plan pays the rest of the allowed amount.

A fixed amount you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care.

The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible. The deductible may not apply to all services.

Health care services that your health insurance or plan doesn’t pay for or cover.

A complaint that you communicate to your health insurance or plan.

The facilities, providers and supplier your health insurer or plan has contracted with to provide health care services. Typically your co-insurance and co-payments will be less when you receive care from in-network providers. Expenses will usually be higher if you get care from an out-of-network provider.

The most you pay during a policy period before your health insurance or plan begins to pay 100 percent of the allowed amount. This limit never includes your premium or balance-billed charges or health care your insurance or plan doesn’t cover. Some health insurance or plans don’t count all of your co-payments, deductibles, co-insurance payments, out-of-network payments or other expenses towards this limit.

A decision by your health insurance or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization isn’t a promise your health insurance or plan will cover the cost.

A provider who has a contract with your health insurance or plan to provide services to you at a discount. Check your policy to see if you can see all preferred providers or if your health insurance or plan has a “tiered” network and you must pay extra to see your providers. Your health insurance or plan may have preferred providers also contract with your health insurer or plan, but the discount may not be as great, and you may have to pay more.

A physician, nurse practitioner, clinical nurse specialist or physician assistant who directly provides or coordinates or helps a patient access a range of health care services.

The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount.

There are four basic plans on the Marketplace that vary by level of cost sharing:

• Bronze plan: Provides essential health benefits and pays for 60% of the costs of the plan
• Silver plan: Provides essential health benefits and pays for 70% of the costs of the plan
• Gold plan: Provides essential health benefits and pays for 80% of the costs of the plan
• Platinum plan: Provides essential health benefits and pays for 90% of the costs of the plan
• Catastrophic plan: Provides essential health benefits for young adults under 30 years of age; high deductible plan

It can be a challenge to find coverage that meets your health care needs and fits your budget. Health insurance that covers more tends to cost more. Some tips as you are shopping for insurance:

• Do your best to balance the cost (monthly premium) of a policy with the protection it offers.
• Determine what you will have to pay yourself for covered services (deductible, co-insurance, co-payments and out-of-pocket limit).
• Estimate costs for non-covered care (services excluded or limited by the policy) and charges (fees above what the plan recognizes).
• Check whether the plan covers the health care services and medications you require.
• Check whether the plan’s health care providers include your current providers, are located conveniently and are high quality.
• Avoid policies that don’t have some kind of maximum out-of-pocket limit on covered charges.
• Don’t mistake insurance-like products for comprehensive coverage.
• If you have questions, call your state’s department of insurance or consumer assistance program.

More information can be found at Healthcare.gov.