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HIV: PRACTICAL MATTERS-FINANCING MEDICAL CARE: PRIVATE, THIRD-PARTY PAYERS FOR FINANCING HEALTH CARE-GROUP PLANS

by admin - July 28th, 2011.
Filed under: HIV.

All private, third-party payers—Health Maintenance Organizations (HMOs), Blue Cross/Blue Shield, and commercial insurance companies—offer two kinds of plans for financing medical care: group plans and individual plans. Group plans are offered by the third-party payer to an employer, and then by the employer to the employees. Individual plans are offered by the third-party payer directly to the individual.     Group plans-Blue Cross/Blue Shield, HMOs, and a large number of commercial insurance companies all sell group plans to employers.     Commercial insurance companies are often national businesses that offer similar group plans to all employers throughout the country. Blue Cross/Blue Shield is a group of 77 not-for-profit, regional insurers who offer different group plans in each of their different regions. HMOs, whose rules for group plans are different from those of commercial companies and Blue Cross/Blue Shield.     Group plans held by companies with large numbers of employees usually do not require you to have a medical examination or to submit your medical records. Anyone with HIV infection currently working for a large company with a group plan will be covered by that plan. Smaller companies, however, are more likely to have group plans that require the employers to answer health questions about their employees.     If you are hired for a new job in a large company, the group insurance will often have a rule about preexisting conditions. To rule out people who take out insurance only when they become sick, insurance companies sometimes enforce a waiting period—usually a matter of months—between the time of application and the time coverage begins. If you are hired for a new job and you have been diagnosed with HIV infection, the insurance company will usually wait for the period set by the preexisting conditions rule before covering you. This rule applies to all preexisting conditions.     Blue Cross/Blue Shield, which has a group plan offered by many employers, does not usually transfer from one employer to another. Each employer negotiates its own individual contract with the local Blue Cross/Blue Shield company. If you transfer from one employer to another, preexisting condition rules will now apply under the second employer’s policy.     The insurer (whether a commercial insurance company or Blue Cross/Blue Shield) always sets limits on what the group plan covers. One of the limits is that group plans generally cover only some fraction of your medical expenses. They often cover around 80 percent of hospital expenses and about 60 percent of physicians’ expenses. In addition, most of the Blue Cross/Blue Shield group plans also cover home health care, the majority also cover hospice care, and about 30 percent also cover prescription drugs.     That part of the medical bill left over after the insurer has paid its fraction is called your co-pay. Co-pay is done two ways, by co-insurance and by deductibles. Co-insurance is usually stated as a percentage of an annual bill: you are usually responsible for 20 percent of eligible medical expenses each year. After that, the company pays all eligible medical expenses. Deductibles are usually stated as an amount of money that you must pay before the insurance company can be billed: you must pay, for instance, the first $25 of any bill.     A second limit on what groups plans cover is that they will pay only for what they consider to be the customary charge for a service. For example, an office visit may be billed at $50, the customary charge (based on area charges by physicians for comparable services) may be $40, the coverage may be 80 percent of the customary charge, or $32, so your co-pay for this bill will be $18.     A third limit is not so much a limit as an incentive: some plans from Blue Cross/Blue Shield provide you financial incentives to choose specific “participating physicians” or Preferred Provider Organizations (PPOs). In other words, certain physicians or groups of physicians agree to lower their fees, thereby also reducing the cost to you. In general, however, the group plans offered by both commercial insurance companies and Blue Cross/Blue Shield allow you considerable freedom of choice: you can choose your own physician and hospital.     A fourth limit: most group plans limit—or cap—total lifetime payments at $1 million or $2 million.     Most insurers periodically renew their policies with employers. Most policies are conditionally renewable, meaning that insurers can refuse an employer’s request to renew the policy only if the insurer refuses to renew all similar policies in that state. This means that an employer cannot be refused a renewed policy because some employees have HIV infection. They may, however, increase the rates charged for coverage of the same services.     In spite of the limits, being enrolled in a group plan through your place of employment is obviously desirable. Because group plans spread coverage over many people, many of whom make few insurance claims, insurers can afford to cover you without requiring that you give evidence of insurability.     HMOs also offer group plans. HMOs provide comprehensive services for a fixed, prepaid fee. In other words, when you join a group plan offered by an HMO, you pay a flat, fixed fee for all your health care bills, regardless of how much health care you actually get. The good news about HMOs is that they finance nearly all medical care. In particular, Kaiser, the largest HMO in the United States, provides a comprehensive program of services for people with HIV infection.     The bad news about HMOs is that, unlike commercial insurance companies and Blue Cross/Blue Shield, HMOs allow little choice in physicians or hospitals. Because competition among HMOs for employer contracts is fierce, costs must be kept low. Consequently, the HMO must carefully regulate hospital admissions, expensive drugs, and expensive procedures and must preapprove any consultation or procedure done outside the resources of the HMO. If your physician refers you to a specialist outside your HMO, for instance, the HMO may rigorously review the referral and often deny payment. As a result, many participants lack confidence in the quality of the health care providers and are disappointed in the range of services the HMO provides. Do not be persuaded by HMOs’ advertisements that emphasize the services offered; in practice, many HMOs choose saving money over offering services.     You can find out the details of group plans by reading the policy or by talking to the claims and benefits office of the insurer that offers the policy. For details about group plans offered by HMOs, often the best source of information are the other people who use the HMO, especially those whose health care needs are complicated.*203\191\2*

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