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Jan. 11, 2025
Health Insurance
Stan, Clarence, Barry, and the Health Chatter team chat about Health Insurance.
Listen along as the team attempts to make sense of a variety of health insurance complexities. This episode is merely an introduction with more detailed episodes to come.
Join the conversation at healthchatterpodcast.com
Brought to you in support of Hue-MAN, who is Creating Healthy Communities through Innovative Partnerships.
More about their work can be found at huemanpartnership.org.
Research
https://www.healthcare.gov/choose-a-plan/plan-types/
- Exclusive Provider Organization (EPO): A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).
- Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
- Point of Service (POS): A type of plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.
- Preferred Provider Organization (PPO): A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.
- Monthly premium x 12 months: The amount you pay to your plan each month to have health insurance.
- Deductibles: How much you'll spend for certain covered health services and prescription drugs before your plan pays anything, except free preventive services. (For example, your plan may charge for an office visit, but you won't pay extra for the preventive service that's part of that visit.)
- Copayments and coinsurance: The amounts you pay your health care provider each time you get care, like $20 for a doctor visit or 30% of hospital charges.
- Out-of-pocket maximum: The most you'll spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services.
HSA vs FSA vs HRA
- FSAs and HSAs both offer tax benefits and have annual contribution limits.
- You must have a HDHP to qualify for an HSA.
- Funds in an HSA roll over year to year. There is no “use it or lose it” rule.
- Many HSAs offer investment options.
- FSAs are "use it or lose it." That means you’ll lose any funds you don’t spend by the end of your plan year unless the plan has a grace period or carryover feature.
- You can use your FSA to cover eligible health care costs at the start of the year. The entire amount is available on day one.
- HSA holders cannot spend more than the funds deposited in their HSA. But they can save receipts for qualified medical expenses and file for reimbursement later, after their balance has grown.
- You can't contribute to an HSA and a traditional FSA in the same year. But HSA holders can also use an LPFSA for dental and vision expenses, and a Dependent Care FSA for childcare costs.
- You can contribute funds to an HSA and FSA. Only your employer can contribute to your HRA.
- Anyone can contribute to your HSA: you, your employer or another person.
- With HRAs, employers may limit which health expenses are eligible and the amount you’re able to roll over from year to year.
How to choose the right plan:
- Most people who get health insurance from their employer, won’t hade many choices to choose from
- Depending on how much you spend on healthcare a year will determine the plan that is best for you.
- For example, some people who have extremely high health care costs, will opt for a high deductible health plan in order to limit their yearly spending to the plan’s out of pocket maximum
- Maybe if you do not spend as much or visit the doctor often, you may choose an HMO or EPO to save the most money.
Medicare
- Federal health insurance for people 65+
- And some people under 65 for those with certain conditions or disabilities
- Has set standards for costs and coverage
- Same standards regardless of state
- Funded through payroll taxes
- Premiums paid by beneficiaries and general revenue from federal government
- Automatic qualification upon meeting criteria (regardless of income or financial status)
- Those covered typically pay part of the costs (i.e. monthly premiums for medical and drug coverage, deductibles, and coinsurance)
- Divided into parts
- Part A → covers hospital insurance
- Typically premium-free for those who have paid into Social Security for at least 10 years
- Part B → provides medical insurance
- Requires monthly premium; covers outpatient services and preventive care
- Part C → offers comprehensive coverage through private insurers (Medicare Advantage)
- Bundles Part A and Part B plus additional benefits like dental & vision
- Part D → covers prescription drugs
Medicaid
- Joint federal and state program that helps cover medical costs for people with limited income and resources
- Funded by federal & state governments
- Federal government matches percentage of state’s expenses
- Each state runs its own program (although federal government has certain standards that all programs need to follow)
- Eligibility/costs/benefits can vary from state to state
- Essential services like hospital visits, doctor appointments, long-term care, and prescription drugs are usually covered
- Eligibility determined based on income, family size, disability status, etc.
- Flexibility
- Offers benefits that Medicare doesn’t cover (ex. nursing home care; personal care services, etc.)
- This makes Medicaid a crucial resources for seniors who require longer-term care
- States have authority to expand Medicaid services and eligibility criteria (especially under the Affordable Care Act)
- Those covered typically don’t pay anything for covered medical expenses except an occasional copay
Dual Eligibility
- Some people qualify for both Medicare & Medicaid and can benefit from both programs to help maximize coverage
- Medicare covers services like hospital visits and outpatient care
- Medicaid covers additional costs like long-term care, dental coverage, and prescriptions not covered by Medicare
- Medicaid can also help pay for medicare premiums and out of pocket costs (i.e. deductibles and copayments)
https://www.cbsnews.com/news/medicare-vs-medicaid-whats-the-difference/
Single Payer
- Public agency takes responsibility for financing healthcare for all residents
- I.e. everyone is covered under the same plan with access to the same resources
- Individuals may still choose where they receive care
- “Medicare for all”
- Funded by combining public funding with taxes (based on ability to pay)
- Advantages
- Addresses inequality (especially for uninsured and underinsured folks)
- Expenses and wasteful spending better controlled through cost control and lower administrative costs
- Research estimates over $500 billion could be saved in administrative costs
- Increased incentive to direct healthcare spending toward public health measures
- Example → targeting funding toward childhood obesity prevention programs in school reduces rates and complications of obesity more effectively and at lower costs compared to paying for doctor visits
- Disadvantages
- Lengthy wait times
- Limited availability of certain services (i.e. elective services and cosmetic procedures)
https://www.health.harvard.edu/blog/single-payer-healthcare-pluses-minuses-means-201606279835
https://pnhp.org/what-is-single-payer/
Employer-Sponsored Health Insurance (ESI)
- Largest source of healthcare coverage for non-elderly US residents
- In 2023, over 60% of people under the age of 65 had employer-sponsored health insurance
- Efficient way of offering coverage to working families, but can result in uneven coverage
- Also beneficial for employers because contributions towards premiums by employers are not subject to income or payroll taxes (provides federal and state subsidy towards ESI costs)
- Employers can purchase a health insurance policy from a state-licensed health insurer OR employer can pay for a healthcare plan directly with its own assets
- Affordable Care Act requires employers with at least 50 full-time employees to offer health benefits which meet minimum standards for value and affordability
- Most employers offer three types of health insurance plans: PPO, HMO, and HDHP-SO
- High Deductible Health Plan with a Savings Options (HDHP-SO)
- Relatively new type of plan
- Pairs a high deductible with either a Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA)
- Represent almost 3 in 10 covered workers (almost a quarter enrolled in HSA-qualified plan)
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