Understanding Your Health Coverage

By Donald C. Bartnick, CMPE, CEO

Maryland Eye Associates

. http://marylandeyeassociates.com

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Understanding Your Health Coverage

Back in the day, our parents or grandparents had to pay out of pocket for their health care. For most people, health care was a direct expense for which they paid personally. In the ensuing years, employers began offering health insurance to employees as a benefit in lieu of additional pay. Because employers could pool their purchases of insurance, they could get better rates than the individuals and the benefit was affordable. The employees, however, were insulated from the cost of the insurance, and people began using their benefits more freely. They were more inclined to use their health care benefits because they werent paying for it directly.
The insurance companies, now called third party payors, began developing different coverage alternatives to reduce the rate of increase in premiums for health care coverage. We have seen the advent of PPOs (Preferred provider organizations), EPOs (Exclusive provider organizations), and HMOs (Health maintenance organizations). Each of these alternatives use somewhat similar mechanisms to reduce the utilization of health care benefits, in an effort to keep premiums affordable. In doing so however, the third party payors have created ever increasing layers of administrative processes to control utilization and direct patients to less expensive providers. In recent years, we have witnessed the blurring of distinctions among these alternatives with products (health plans) called “open access HMOs.” Most health plans offer both “in-network” and “out-of-network” benefits with financial incentives for going to doctors that agree to accept less payment for their care. Patients have traded free choice and accepted more administrative restrictions in an effort to reduce the rate of increase of health care premiums.
Despite these efforts, health care premiums continue to rise resulting in more employers and individuals being unable to continue providing for health care coverage. Some employers are reducing the percentage of the premiums they cover, while others simply cant afford to offer health care coverage at all. Individuals are choosing to forego health coverage because it is not affordable for them. Somehow, the patient needs to be placed back in control of their health care utilization and the financial incentives adjusted accordingly.
Some legislators have pursued this reasoning. The US Congress created “medical savings accounts” (MSAs) to provide the patient with a financial incentive to live a healthier life by combining a savings account for health coverage and a high deductible health insurance. The principle is that an individual will spend their own money more wisely. But the individual still needs a “safety net”; thus the combination of the savings account with a high deductible health coverage policy. This combination of coverages results in a package of health coverage that is less expensive because the “first dollars” are spent by the patient and not the third party payor.
Congress subsequently changed the name for an MSA to Health Savings Account (HSA). With this enabling legislation, the carriers doing business in Maryland began offering group policies with high deductibles that would be necessary to combine with the HSA. Group policies in Maryland can offer HSA combined coverage, “flexible spending accounts” (FSAs) or “health reimbursement accounts” (HRAs). Each of these operates under different rules. Some offer a “health care debit card” to be used for “first dollar payments.” Some are reimbursement accounts. Some allow the covered employee to save unused money while others do not.
All of these plans are an effort to return responsibility and control of health care expenditures to the patients. It can be viewed as the restoration of a free-market system with the consumer and the supplier interacting more directly rather than through a third party.
Investigate the alternatives available to you. Choose the health plan that serves you best. Urge your employer to consider new ways to provide coverage. Know your health plans requirements and coverages and work with your doctors offices to access your coverage to your advantage. And most important, stay healthy.