ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, September 16, 1996 TAG: 9609180057
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
ALTHOUGH you can buy a comprehensive policy that should cover most medical, hospital, surgical and pharmacy bills, no single policy is designed to do everything. You may, for instance, want to consider separate policies for long-term care in a nursing home, a Medicare supplement (if you are over 65) and to replace or supplement income lost to a disability.
With health insurance, your aim should be to insure yourself and your family against the most serious and financially disastrous losses that can result from an illness or accident.
If you need individual coverage, buy a policy that will cover major expenses to the highest level you can afford. Save money on premiums, if necessary, by taking large deductibles and paying some of the smaller costs out of your own pocket.
Here are some facts about health insurance that you may consider:
BASIC HEALTH
Hospital-surgical policies, often called basic health insurance, provide benefits related directly to hospitalization costs and associated medical expenses.
Many of these policies specify that the insured must be hospitalized before any benefits are paid, but others provide benefits for certain specified outpatient charges.
Typical benefits include room and board and services such as surgery, physicians' nonsurgical services performed in a hospital, outpatient diagnostic x-ray and laboratory expenses.
Some policies may provide for full coverage without a deductible amount. Others provide for deductibles and/or co-payments.
Although there may be little out-of-pocket expense for a policyholder in a short-term hospitalization or routine surgery, lengthy hospitalizations and costly medical care may not be covered by these policies. Unless you have other insurance, you may incur sizable expenses that are difficult to meet.
MAJOR MEDICAL
Because all basic policies stop paying when certain time or dollar limits are reached, major medical policies provide additional protection against the high costs of serious or continuing illnesses or injuries.
These policies usually provide broader coverage than basic policies. They may cover the costs of blood, drugs and out-of-hospital costs such as doctors' fees. Benefits are paid longer, and dollar limits are higher, compared to basic policies.
Major medical policies usually have a yearly deductible. They usually pay 80 percent of covered expenses above the deductible. The insured pays the remaining 20 percent. After the insured has paid a stated maximum amount, some policies pay 100 percent of any remaining covered expenses.
Many companies offer policies that combine basic and major medical plans into one package, often called comprehensive policies.
Major medical and comprehensive policies also contain limits on lifetime benefits. You should have a limit of no less than $1 million for adequate protection.
HOSPITAL INDEMNITY
Hospital indemnity policies, often sold by mail, pay a predetermined flat benefit for each day an insured is hospitalized, generally up to a designated number of days. Because these benefits remain level despite inflation, the plans become less valuable as health care costs rise.
These policies are not a substitute for basic insurance, although cash benefits paid directly to you may be used for any purpose and may help meet expenses not covered by other insurance.
Some policies contain limitations on pre-existing conditions, while others may have an elimination period, meaning benefits won't be paid until after a certain number of days in the hospital. You may be offered different elimination periods for different premiums.
Although you can hold costs down by choosing a long elimination period, be aware that most patients today are hospitalized for relatively brief periods of time.
SPECIFIED DISEASE
These policies provide benefits only if you suffer from the disease named in the policy. The most typical covers only medical care associated with cancer. Benefits are usually limited in amount, such as $100 a day for each hospitalization or a one-time "first occurrence" payments for a specified disease.
The policies have value only if you get that disease, so these are not a substitute for basic and comprehensive coverage. They may be appropriate for some people if they have indications they are likely to contract the specific disease.
EMPLOYER
Employers often offer their workers a choice of plans. Even when you are covered by health insurance on the job, you must understand your options so you can make appropriate decisions. Group plans are better than individual policies because they usually provide more services than individual policies do, and at a lower cost.
FEE-FOR-SERVICE
The traditional health policy assumes that you, the patient, will be paying a fee for a service rendered by a doctor or hospital. You go to the physician or other medical provider of your choice, who bills you. You then submit a claim to the insurance company for reimbursement. As a courtesy, some providers will submit the claim for you.
The amount of your reimbursement depends on the deductible under the policy and whether it has been met; and the co-payment provision of the policy, typically 20 percent of the cost until a specified level of benefits has been reached.
Sometimes such plans contain elements of managed care, which means you will receive a larger benefit if you use a provider in an approved network.
Preventive services such as checkups frequently are not covered because many of these policies emphasize treatment of illnesses rather than prevention.
EMPLOYEE WELFARE BENEFIT
Many employers choose to provide health care benefits by establishing self-funded or partially self-funded employee welfare benefit plans under federal law. This means your employer may pay all or part of the costs associated with providing these benefits to you. In some cases, you may be required to contribute toward the costs associated with the plan.
Self-funded plans are not insurance and, therefore, are not regulated by the Virginia Bureau of Insurance. The employer determines the benefits and amount of coverage, although there are some federal requirements. Some requirements are procedures for handling and appealing claims and delivery of an annual summary of coverage. You can obtain information about your rights under these plans by contacting the Pension and Welfare Benefits Administration of the U.S. Department of Labor.
MANAGED CARE
Compared with traditional coverage, this is a relatively new way of providing and paying for health services.
Health maintenance organizations (HMOs) are a rapidly expanding form of managed care, but there are many other variations. With managed care, a group of doctors and hospitals provides comprehensive medical services to people who enroll in that particular plan.
For example, a person may join a local HMO and pay a monthly or quarterly fee. Whether that person uses the plan or not, the fee is the same. Such a plan may charge small amounts for services, such as $5 for every prescription you fill in the plan's pharmacy.
Thus, if you join an HMO, you may have little, if any, out-of-pocket expenses for medical care as long as you use doctors and hospitals that are part of the network. At most, you may have a small co-payment, but you should not face deductibles or co-insurance.
Other forms of managed care, on the other hand, may have some deductibles or co-insurance, but they offer financial incentives to seek care from network providers. You may not be able to see the doctor of your choice, but the plans cut costs for employees and companies.
WHAT IF I LOSE MY JOB?
Federal law requires companies with 20 or more employees to offer continuation of coverage for you and your family for 18 months if you lose your job. Following an employee's death or divorce, the family has a right to continue coverage for up to 36 months. You must notify your employer of your decision to take the coverage within 60 days, and you must pay the entire premium on a monthly basis up to 102 percent of the cost.
If this coverage doesn't apply to you, perhaps because your employer has less than 20 workers, you may still be able to convert your group coverage to individual coverage. If you take this route, you may not have to pass a medical exam. But coverage may be reduced while premiums are higher.
If you are outside these options or have not recently worked, you may seek a short-term policy while you look for another job. These policies are typically written for two to six months and are renewable only once, but they cover hospital costs. These policies are used by people between jobs or between college and a job, but only healthy candidates are accepted.
Another possibility is securing health insurance through a trade or professional association. This may also be an option for the self-employed.
INSURANCE OF LAST RESORT
If you are in poor health or have been denied insurance, you should contact Trigon Blue Cross Blue Shield at 1-800-334-7676. Trigon is the insurer of last resort in Virginia. That means that in exchange for certain tax benefits, the company cannot deny you insurance, but there is a two-year waiting period for pre-existing conditions.
LENGTH: Long : 173 lines ILLUSTRATION: GRAPHIC: 2 illustrations. color.by CNB