Why should I have health insurance?

The cost of health care has risen drastically over the past few decades. If you do not have medical insurance to help pay bills, a serious injury or illness can be financially devastating to you and your family. If you don’t have coverage you can be exposed to high health care bills; or, if you have too little or the wrong kind of coverage, you won’t have enough protection.

What Types of Health Insurance Are Available?

Major Medical Plans

This type of policy is usually effective in covering serious illness or injury where costs are high. Hospital care, drugs and doctors’ visits, are usually covered. These benefits can be delivered in several different ways:

• Indemnity plans – These major medical 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 actual expenses, often 80 percent. These plans usually provide the most flexibility in choosing where to receive care.
• Preferred Provider Organization (PPO) plans – In these major medical plans the insurance company enters into contracts with selected hospitals and doctors to furnish services at a discounted rate. As a member of a PPO, you may be able to seek care from a doctor or hospital that is not a preferred provider, but you will probably have to pay a higher deductible or co-payment.
• Health Maintenance Organization (HMO) plans – These major medical plans usually make you choose a primary care physician (PCP) from a list of network providers. Your PCP is responsible for managing all of your health care. If you need care from any network provider other than your PCP, you may have to get a referral from your PCP to see that provider. You must receive care from a network provider in order to have your claim paid through the HMO. Treatment received outside the network is usually not covered, or covered at a significantly reduced level.
• Point of Service (POS) plans – These major medical 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). Like a PPO, you can go to an out-of-network provider and pay more of the cost. However, if the PCP refers you to an out-of-network doctor the health plan will pay the cost.

Can my employer change our health insurance carrier and level of benefits during the year?

Yes. It is completely up to the employer whether or not they will offer health insurance to employees at all, and they can change carriers and level of benefits at any time.

What happens when my group health coverage ends?

You can apply for individual health coverage under the federal law Health Insurance Portability and Accountability Act (HIPAA). This type of policy is issued on a guaranteed issue basis if you meet the qualifying criteria. However, there is no limit on the maximum premium the insurance company can charge. Care for preexisting conditions may not be excluded from coverage.

What happens to my group health coverage if I leave my employer?

You may be eligible for protection under the Consolidated Omnibus Budget Reconciliation Act (COBRA) law and entitled to a minimum of 18 months of continuation coverage. You can find out more about COBRA continuation of group health benefits from the Federal Department of Labor Office of Employee Benefits Security Administration website.

Can health insurance companies deny my application for individual insurance due to a health condition?

Yes, a company has the right to deny coverage for almost any reason on a new application. However, once you are accepted for coverage, the company cannot cancel your policy except for nonpayment of premium.

What is a preexisting condition?

This is normally a physical or mental condition for which medical advice, diagnosis, care or treatment is recommended or received before the effective date of the policy.

Is there assistance available?

There are many programs available through the federal or state governments to assist with the high cost of health care and health insurance. You may contact your state government to learn about your eligibility for Medicaid (for low-income and disabled persons), the State Children’s Health Insurance Program (SCHIP), high-risk pool coverage for individuals who are denied coverage, prescription drug assistance programs, or other assistance.

You may also contact the Department of Health and Human Services for information about Medicare (including the new prescription drug program which provides many subsidies). In addition, the federal government provides tax credits for certain workers who have lost their jobs because of federal trade agreements or whose pension program has failed.

What is a “self-insured” plan?

An employer may choose to “self-insure” by paying out benefits from its own funds. Typically, an insurance company administers the program, but the liability for paying for the care of the employees rests on the employer. It is important for workers to understand that if their employer “self-insures,” state patient protections (such as access to internal and external appeals processes, assurance of certain benefits, and the right to have grievances heard by their State Insurance Department) do not apply. All federal protections (i.e., HIPAA and COBRA) do remain.

Where can I go for help?

If you have any questions about your policy, your rights and protections, or a potential agent or insurer, you can contact Kentucky Health Solutions for information. You can also contact your State Insurance Department for assistance if you have a grievance against a licensed health insurer.