Tips For Smart Shoppers

Once upon a time, people could go to any doctor they wanted. If their general practitioner decided they needed to see a specialist, they could see any specialist they pleased. If they needed medicine, they could go to any pharmacy and get exactly what the doctor ordered.

But things have changed. Today, we have a lot more choices, including HMOs, PPOs, generic drugs, lists of doctors we can and can't see, treatments we are allowed-only after two or three doctors agree that it's necessary.

The changes are due, in part, to skyrocketing medical costs. In fact, according to the Washington Insurance Council, in 1969 per capita expenditures for health care were about $268 per year in the United States. By 1990, that figure jumped to nearly $ 2,567. During the same 20-year period, health expenditures grew from 5.3 percent of the gross national product (GNP) to 12.2 percent.

Health insurers have had to absorb some of these costsand they've had to contend with ever-increasing fees for doctors, lab tests, prescription drugs, and hospitals. On the other hand, they have passed many of the increased costs on to you-the consumer-in the form of higher premiums. But there conies a time in every industry's lifecycle when it can't pass the costs on any longer and it has to do something else. It has to cut costs.

Still, you do have .choices when it Comes to your health insurance-whether you are buying your own coverage or getting it through your employer.

Getting The Most Out of Your Health Plan

In order to get the most out of your health plan, you should stay informed. How? Read your health insurance policy and/or plan member handbook thoroughly, making sure that you understand the sections that pertain to the benefits, coverage, and limits provided under the policy.

Some companies allow you to change your mind and get your money back after you purchase health insurance-but only if the policy has a "free look" period, which typically ranges from 10 to 30 days. So, read your policy as soon as you get it.

Insurance consumers-like consumers of anythingshould compare the various products they are considering buying. The problem with insurance is that people don't always know where to look.

You should have enough insurance to cover you and your family against the most serious and rmancially disastrous losses that can result from an illness or accident. If you are offered health benefits at work, carefully review what each plan offers to make sure the one you select fits your needs. If you purchase individual coverage, buy a policy that will cover your major medical expenses and pay them to the highest maximum level.

Call the health plan. Most offer brochures on the various coverages, as well as the information that you should and need to know: Additionally, they may offer telephone numbers for hotlines, services, etc. which might' also be useful in your search for the "best" plan for you.

You might also want to speak with the Human Resources director or health benefits officer at your workplace to learn more about your policy. They can usually provide you with some information, brochures, and personal insight as well as provide you with key contact numbers for your plan.,

Comparing Plans

Most people tend to choose between a traditional indemnity plan and a managed care plan. As with any plan, whether you end up choosing a fee-for-service plan or a form of managed care, you must examine a benefits summary or an outline of coverage. The benefits summary gives you a description of policy benefits, exclusions and provisions which makes it easier to compare policies.

Read the summaries carefully. Think about you and your family's specific health care needs. You may not" want coverage for pregnancy, but you may want coverage fot chiropractic services,

Here's a list of important questions to ask:

• What exactly does the plan cover? Some services such / as mental health, drug rehabilitation or dental care, may not be included at all. While you can't possibly predict all of your health care needs, find out if the treatments that you need are covered. Also, find out if treatments that are considered experimental or nontraditional are permissible and, if you're interested, if alternative or holistic treatments are covered.
• What will it really cost? Don't just look at the monthly premiums. Consider the overall costs, including copayments and deductibles. Some plans offer a reasonable limit on the total you will pay each year. Others place a lifetime limit on what the company will pay, which you can reach if you have one major health problem.
• Do you have a choice of doctors? Be sure to have some flexibility. Also be sure at least a few local hospitals and pharmacies are covered under the plan.
• Is there a utilization review? In some plans, you cannot switch doctors or see a specialist without authorization. What happens if you dont like the doctor you choose?
• Who decides what is considered medically necessary? Does the insurance company or the doctor decide?
• What about preexisting conditions? If you have a preexisting condition, such as high blood pressure, you may be liable for all costs relating to the illness. Know when and if your insurance pays for any illnesses you may have.
• What is the relationship between your doctor and your health insurance company? If your doctor receives a set fee per patient (capitation) or receives a bonus for minimizing costs (incentives), your healthcare could get shortchanged. A doctor may be reluctant to order tests or referrals under these situations.
• Does th~ plan you're considering have a grievance procedure? What if something goes wrong? Can you appeal? Be.. sure to talk with someone who is authorized to answer your questions, like the plan administrator, and keep good records. Who regulates HMOs in your state and what's the procedure to lodge a complaint if you think y~u're b~ing trea~e~ unfairly?

When c�1I!paring coverage, it is critical to lopk into a plans limitations and exclusions to determin~ which expenses are not covered and Which ar~ restricted,. For instance" many policies will pay only for treatment tlIat is deemed "medically necessary" to restore you to good health. Thes~ polici~ often will not cover routine physical examinations, cosmetic procedures or even the costs of eyeglasses or hearing aids.

Gag clauses'can prevent doctors from revealing their compensation or discussing treatment options not covered by the plan.

The following is a list of services you might want to ask about when looking into a plan:

• covered medical services
• inpatient hospital services
• outpatient surgery
• physician visits (in the hospital)
• office visits
• skilled nursing care
• medical tests and x-rays
• prescription drugs
• mental health care
• drug and alcohol abuse treatment
• home health care visits
• rehabilitation facility care
• physical therapy
• speech therapy
• hospice care
• maternity care
• chiropractic care
• preventive care and checkups
• 'Yell-baby care
• dental care
• other covered services

Old Fashioned vs. New-fangled

Is access to preventive care and routine check-ups an important factor in your choice of a health plan? If you answered "yes," you might want to go with a traditional indemnity-type plan. But, if you'd rather save money on premiums, an HMO might be a smart choice.

A traditional indemnity plan or fee-for-service coverage gives you freedom of choice. You choose the doctor you want to see and then pay a fee for each service rendered. If the services are covered under your policy, your illsurance company will reimburse you for some-but not all-of the cost. Many policies pay 80 percent of the costs. Fee-for-service plans cost considerably more than managed care plans.

However, if you want lower premiums, you will have to give up some of this freedom of choice (unless of course, your doctor is part of the HMO network and listed as your primary physician). Rather than being penalized by getting less of a reimbursement, as in a PPO plan-which gives you some choice-with an HMO you'd have to pay the whole bill yourself. (Clearly, this is a strong incentive to see only providers within the HMO.)

Today, many HMOs have added options to their plans which allow you to see a doctor of your choice who is out of network. Of course, this, too, will cost considerably more than a co-payment.

A PPO gr POS combinesilie features ofree-fo&service plans ahd HMOs. These .types of managed care plans provide a choice regarding doctors, hospital,.. etc. whereas an HMO restricts choice to a network provider. Under these plans you will also get some reimbursement Jor covered services from a provider. The only major diffe1ience between a PPO and a POS plan isthaf under aPOS plan, a prim<="" not.="" PPOs?do="" cases,="" most="" in="" and="" care,="" your="" coordinates="" physiCian="" care="">

If your doctor is already a contracting provider with a PPO or HMO, you may be able to save some money by going with one of the more restrictive plans-and you'd still get to see the doctor of your choice. In other words, read the preferred provider list, or the HMO's provider list, before you decide.

HMOs can be qpii"e restrlctiv'e,and nJ,anypeople don't learn the details of their plans until.they have a medical problem,," or a problem with cOv'erage. Critics question whether managed care has been stretching its method of cost containment tog far. Aniong other things; managed care is criticized for depleting funds for scientists and medical schools, proQosmg gag rules to restrict treatment discussions between doctors and patient�, and offering financial il?-centives to its staff,for curt:iiJing medical costs.

It's worth looking into how much the service fee is for monthly payments-and inquiring about a discount for prepayment. Even if you alrc;:ady have health insurance, you'll want to review your policy once a year to be sure it still matches your needs. As the health care sysiem continues to change, your health insurance should change with it.

Insurance Companies, etc.

Most life and health insurance companies market both group and individual hospitalization coverage. There are also service organizations, such as Blue CrosslBlue Shield, that provide prepaid medical and health benefits in accordance with state laws that recognize them as not-for-profit organizations and exempt from state premium taxation.

The oidy difference between the two is that commercial insurers have a contractual relationship with you, and service organizations have a contractual relationship with providers. With a service organization, you use the services of the contracted doctors or hospitals-participating providers- ~ and claims are settled directly with the providers.

Cancer and Other Coverages

If you want a little more coverage than a standard policy offers, you can purchase-as a stand-alone policy or combined coverage-a number of alternative coverages to fill in the gaps in traditional health insurance. Accidental Death & Dismemberment riders cover you for the severance of arms, legs, or the loss of vision as a result of an injury or accident.

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There are also a variety of special insurance policies that provide a limited amount of coverage-including, travel accident insurance, specified disease or dread disease insurance, hospital income insurance, accident-only insurance, blanket insurance, etc.

One optional coverage that may be worth the money is prescription medication coverage. This type of coverage will cover the costs of medication required, in lieu of a stated cost-usually two, three, or five dollars.

Government Plans

There are two main programs in which the government becomes a health care provider: Medicare and Medicaid.

If you are age 65 or older-or disabled-you could be eligible for Medicare, a federal health care program financed by the Social Security taxes that are taken out of you and your employer's paychecks.

The other major federal health~care program is Medicaid. Qualification for benefits in a Medicaid program are based on rmancial need and the coverage -offered under the ,plan is fairly limited.

Individual vs. Group Policy

Health coverage is usually available on an individual or group basis. Group coverage-typically what most people have-is somewhat cheaper than individual coverage.

You can get group coverage through your employer, but unions, professional associations, and other organizations also offer the~ coverage~,

Your employer may choose to assume some or all of the costs of your premium-usually lower due to lower administration costs for large groups-or he could choose to deduct 'it from your pay.

To save even a little more money, your employer might want to set aside a sum of money in a secured account to pay for your health care costs when they arise. This type of plan is referred to as a self-funded plan.

Deductibles

As with other types of insurance, the higher your deductible, the lower your premium. For most people, a deductible in the $100 to $250 range is the most manageable. But compare other deductibles, too. If your family has been healthy for a number of years, you may want to switch to a deductible of $560 or $1,000. You'll notice a sizable reduction in premiums.

Save money on premiums, Jf necessary, by taking larger deductibles and covering smaller costs y?urself

Most policies have an out-of-pocket maximum-when your covered expenses reach a specified limit in a given policy year, a reasonable fee for the benefits that are covered under your plan will be paid in full by your insurer, and you no longer have to pay the co-insurance. However, if your doctor bills you more than the reasonable and customary charge, you may still be required to pay some of the costs.

Most policies have lifetime limits, too. It's smart to look for a plan with a lifetime limit of at least $1 million. If it's lower than this, you could run through coverage if you ended up having major health problems for several years.

Other Issues

Insurance agents and companies may not claim that they represent the Medicare program, the Social Security Administration, or any government agency. They may not imply that the policy they are selling is guaranteed, approved or otherwise backed up by the government. If someone calls you claiming to have been authorized by the government to review your existing insurance program, don't agree to an appointment.

Anyone who tells you that he or she is a counselor or adviser for any association of senior citizens, may in fact just be a licensed insurance agent trying to sell you a Medicare supplement insurance policy. Ask for credentials, the licenses they hold, and what kinds of products they are authorized to sell. A business card is not a license.

Never let an agent talk you into signing any form, application, or document in blank. When you are buying a policy; never pay your policy premium in cash or make out a check to the agent's personal account. The agent should make it clear that you have the option of paying your premiums directly to the insurance company.

You may want to check with your state insurance department to see if there have been a lot of complaints about the insurance companies you're considering. There are agents and companies whose lack of professionalism and ethics can cost consumers dearly. But there are also ways for you to protect yourself. Knowledge is power, and being aware of your coverages as well as your legal rights and responsibilities will help you avoid being taken advantage of when choosing a plan.