Health Insurance

What is health insurance?  (source: Connecticut Insurance Department)

• Indemnity plans: typically have a deductible - the amount you pay before the insurance company begins paying benefits. After your covered expenses exceed the deductible amount, benefits usually are paid as a percentage of reasonable and customary expenses, often 80 percent. These plans usually provide the most flexibility in choosing where to receive care.
• Preferred Provider Organization (PPO) plans: allow an insurance company to enter into contracts with selected hospitals and doctors to furnish services at a discounted rate. There is usually a higher deductible or co-pay if you seek care from a doctor or hospital that is not a preferred provider.
• Health Maintenance Organization (HMO) plans: usually make you choose a primary care physician (PCP) from a list of network providers. Your PCP is responsible for managing your health care, including referring you to another doctor in the network if necessary. Treatment received outside the network is usually not covered, or covered at a significantly reduced level.
• Point of Service (POS) plans: are a hybrid of the PPO and HMO models. They are more flexible than HMOs, but do require you to select a primary care physician (PCP). You can go to an out-of-network provider and pay more of the cost.
• Limited benefit plans: provide coverage for a particular health care setting, ailment or disease.

• Discount Plans: are often advertised promising deep discounts on health care for a “low” monthly fee. Participants do not have the same protections they would have under licensed health insurance.
• Non-Licensed Risk-Sharing Plans: invite you to join a group or association that will roll your monthly payments into a savings account, or trust, with other participants’ money, and then help pay some of your health care costs. Such arrangements are NOT authorized insurance plans and the participants do not have the protections available to purchasers of licensed insurance plans.
• Always verify before you buy – Contact the Connecticut Insurance Department 800-203-3447 or e-mail: cid.ca@ct.gov

What affects premiums?  (source: Connecticut Insurance Department)
Here are some ways you can control your health insurance costs:

• Many plans offer a menu of options. Regularly review your situation, and adjust your options to meet changing needs.
  
• Stay in your network as much as possible, making sure to obtain referrals as required.
  
• Many plans require pre-certification for certain tests and procedures. Know your plan, and comply with these requirements to avoid paying penalties.
  
• Hold onto all receipts for medical services. An accident, out-of-town emergency room visit or unexpected illness might cause you to incur out-of-pocket expenses.
  
• Look beyond the monthly amount you must pay and closely evaluate covered services, co-pay requirements, deductibles and reimbursement levels so that you make the best choice for your family and your pocketbook.
  
• If you’re married and both spouses work at jobs that provide health insurance, compare these policies and costs to see which one best fits your needs.
  
• If your employer offers a flexible spending account you can set aside pretax dollars for medical expenses and childcare.
  
• Consider combining a high-deductible catastrophic plan with a Health Savings Account (HSA), which is a tax-sheltered savings account similar to the IRA, but earmarked for medical expenses.  Deposits are 100 percent tax-deductible for the self-employed and can easily withdrawn by check or debit card to pay routine medical bills. Larger medical expenses are covered by a low-cost, high deductible health insurance policy.  What is not used from the account each year stays in the account and continues to grow interest on a tax-favored basis to supplement retirement, just like an IRA.  Employers are beginning to offer HSAs to their employees as a health insurance option.

What is 'long-term care'?
Because of old age, mental or physical illness, or injury, some people find themselves in need of help with eating, bathing, dressing, toileting or continence, and/or transferring (e.g., getting out of a chair or out of bed). These six actions are called Activities of Daily Living–sometimes referred to as ADLs. In general, if you can’t do two or more of these activities, or if you have a cognitive impairment, you are said to need “long-term care.”

Long-term care isn’t a very helpful name for this type of situation because, for one thing, it might not last for a long time. Some people who need ADL services might need them only for a few months or less.

Many people think that long-term care is provided exclusively in a nursing home. It can be, but it can also be provided in an adult day care center, an assisted living facility, or at home.

Assistance with ADLs, called “custodial care,” may be provided in the same place as (and therefore is sometimes confused with) “skilled care.” Skilled care means medical, nursing, or rehabilitative services, including help taking medicine, undergoing testing (e.g. blood pressure), or other similar services. This distinction is important because Medicare and most private health insurance pays only for skilled care–not custodial care.

Are there exclusions?

Every policy has an exclusion section. Some states do not allow certain exclusions. Many long–term care policies exclude coverage for the following: 

• Mental and nervous disorders or diseases (except organic brain disorders)
• Alcoholism and drug addiction
• Illnesses caused by an act of war
• Treatment already paid for by the government
• Attempted suicide or self inflicted injury

Is long-term care right for me?

Whether you should buy long–term care insurance depends on your age and life expectancy, gender, family situation, health status, income and assets.

• Age and Life Expectancy: The longer you live, the more likely it is that you will need long–term care. The younger you are when you buy the insurance, the lower your premiums will be.
• Gender: Women are more likely to need long–term care because they have longer life expectancies and often outlive their husbands.
• Family Situation: If you have a spouse or adult children, you may be more likely to receive care at home from family members. If family care is not available and you cannot care for yourself, paid care outside the home may be the only alternative.
• Health Status: If chronic or debilitating health conditions run in your family, you could be at greater risk than another person of the same age and gender.
• Income and Assets: You may choose to buy a long–term care policy to protect assets you have accumulated. On the other hand, a long–term care policy is not a good choice if you have few assets or a limited income. Some experts recommend you spend no more than 5 percent of your income on a long–term care policy.

What are the types of disability insurance?
There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD):

1. Short-Term Disability policies (STD) have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years.
    
2. Long-Term Disability policies (LTD) have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

Disability policies have two different protection features that are important to understand.

1. Non-cancelable means the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits.
    
2. Guaranteed renewable gives you the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you.

In addition to the traditional disability policies, there are several options you should consider when purchasing a policy:

• Additional purchase options: Your insurance company gives you the right to buy additional insurance at a later time.   
• Coordination of benefits: The amount of benefits you receive from your insurance company is dependent on other benefits you receive because of your disability. Your policy specifies a target amount you will receive from all the policies combined, so this policy will make up the difference not paid by other policies.   
• Cost of living adjustment (COLA): The COLA increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA.   
• Residual or partial disability rider: This provision allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled.   
• Return of premium: This provision requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy.  
• Waiver of premium provision: This clause means that you do not have to pay premiums on the policy after you’re disabled for 90 days.

Additional Information
Connecticut Insurance Department- Health Care Reform Consumer Resource Page
United States Department of Labor- COBRA Consumer Assistance