MONEY Health Care

Why Your New Health Plan Might Not Cover Hospital Stays

Person in hospital bed
Companies that haven't offered health coverage before are the most likely candidates to roll out hospital-free plans now. Blend Images—Alamy

A debate is growing over whether an Obamacare calculator really lets some employers offer health insurance without hospital coverage. Is this a software glitch, or a giant loophole in the law?

Lance Shnider is confident Obamacare regulators knew exactly what they were doing when they created an online calculator that gives a green light to new employer coverage without hospital benefits.

“There’s not a glitch in this system,” said Shnider, president of Voluntary Benefits Agency, an Ohio firm working with some 100 employers to implement such plans. “This is the way the calculator was designed.”

Timothy Jost is pretty sure the whole thing was a mistake.

“There’s got to be a problem with the calculator,” said Jost, a law professor at Washington and Lee University and health-benefits authority. Letting employers avoid health-law penalties by offering plans without hospital benefits “is certainly not what Congress intended,” he said.

As companies prepare to offer medical coverage for 2015, debate has grown over government software that critics say can trap workers in inadequate plans while barring them from subsidies to buy fuller coverage on their own.

At the center of contention is the calculator — an online spreadsheet to certify whether plans meet the Affordable Care Act’s toughest standard for large employers, the “minimum value” test for adequate benefits.

The software is used by large, self-insured employers that pay their own medical claims but often outsource the plan design and administration. Offering a calculator-certified plan shields employers from penalties of up to $3,120 per worker next year.

Many insurance professionals were surprised to learn from a recent Kaiser Health News story that the calculator approves plans lacking hospital benefits and that numerous large, low-wage employers are considering them.

Although insurance sold to individuals and small businesses through the health law’s marketplaces is required to include expensive hospital benefits, plans from large, self-insured employers are not.

Many policy experts, however, believed it would be impossible for coverage without hospitalization to pass the minimum-value standard, which requires insurance to pay for at least 60% of the expected costs of a typical plan.

And because calculator-approved coverage at work bars people from buying subsidized policies in the marketplaces that do offer hospital benefits, consumer advocates see such plans as doubly flawed.

Kaiser Health News asked the Obama administration multiple times to respond to criticism that the calculator is inaccurate, but no one would comment.

Calculator-tested plans lacking hospital benefits can cost half the price of similar coverage that includes them.

While they don’t include inpatient care, the plans offer rich coverage of doctor visits, drugs and even emergency-room treatment with low out-of-pocket costs.

Who will offer such insurance? Large, well-paying employers that have traditionally covered hospitalization are likely to keep doing so, said industry representatives.

“My members all had high-quality plans before the ACA came into existence, and they have these plans for a reason, which is recruitment and retention,” said Gretchen Young, a senior vice president at the ERISA Industry Committee, which represents very large employers such as those in the Fortune 200. “And you’re not going to get very far with employees if you don’t cover hospitalization.”

But companies that haven’t offered substantial medical coverage in the past — and that will be penalized next year for the first time if they don’t meet health-law standards — are very interested, benefits advisors say.

They include retailers, hoteliers, restaurants and other businesses with high worker turnover and lower pay. Temporary staffing agencies are especially keen on calculator-tested plans with no hospital coverage.

“We’ve got many dozens of staffing-firm clients,” said Alden Bianchi, a benefits lawyer with Mintz Levin in Boston. “All of them are using these things.”

Advisors and brokers declined to identify employers sponsoring the plans, citing client confidentiality.

Benefits administrators offering the insurance say it makes sense not only for employers trying to comply with the law at low cost but for workers who typically have had little if any job-based health insurance.

“This is a stepping-stone to bring in employers who have never [offered] coverage and now they’re willing to come forward and do something,” said Bruce Flunker, president of Wisconsin-based EBSO, a benefits firm.

The plans are an upgrade for many workers at retailers, staffing agencies and similar companies, he said.

“OK, if I go to the hospital I don’t have coverage,” he said. “But I don’t have [hospital] coverage now. And what I get is a doctor. I can go to a specialist. I get a script filled at the pharmacy. I get real-life coverage.”

Companies considering such plans include a restaurant chain with 1,000 workers, a trucking firm with 500 employees and dependents, a delicatessen, a fur farm and firms working the oil boom in upper Midwest, Flunker said.

Employer interest in the plans “is definitely picking up pretty quickly,” said Kevin Schlotman, director of benefits at Benovation, an Ohio firm that designs and administers health coverage. “These are organizations that are facing a significant increase in expenses. They’re trying to do their best.”

Because hospital admissions are rare, plans paying for routine care are more valuable to low-wage workers than coverage of expensive surgery and other inpatient costs, say consultants offering them.

Such plans come with deductibles as low as zero for doctor visits and prescriptions and co-pays of only a few dollars, they say. Emergency-room visits cost members in the $250 or $400 range, depending on the plan.

By contrast, health-law-approved insurance with inpatient benefits often includes deductibles — what members pay for all kinds of care before the insurance kicks in — of $6,000 or more.

Generous coverage of routine care is “what these people want,” said Shnider. “They want to be able to go to the doctor. Take care of their kids, go to the emergency room.”

In some cases, employers sponsoring calculator-approved plans without hospital coverage also offer “fixed indemnity” coverage that does pay some hospital reimbursement, advisors say. But the benefits are typically a small fraction of hospital costs, leaving members with the likelihood of large bills if they are admitted.

Concerned for their reputations, larger administrators are wary of managing benefits without hospitalization, even if they do pass the calculator.

“Our self-funded customers hand out insurance cards to their employees with Blue Cross all over it,” said Michael Bertaut, health care economist at BlueCross BlueShield of Louisiana, which has no plans to handle such coverage. “Do we really want someone to present that card at a hospital and get turned away?”

There are two health-law coverage standards that large employers must meet to avoid paying a penalty.

One, for “minimum essential coverage,” merely requires some kind of employer medical plan, no matter how thin, with a potential penalty next year of up to $2,080 per worker. Many low-wage employers are meeting that target with “skinny” plans that cover preventive care and not much else, say brokers and consultants.

The calculator tests the health law’s second, more exacting standard — to offer a “minimum value” plan at affordable cost to workers. Failure to do so triggers the second penalty, of up to $3,120 per worker.

The argument over the calculator is whether plans carving out such a large chunk of benefits — hospitalization — can mathematically cover 60% of expected costs of a standard plan.

They probably can’t, Jost said. The fact that the calculator gives similar, passing scores to plans with hospital benefits and plans costing half as much without hospital benefits suggests that it’s flawed, he said. Plans with similar scores should have similar costs, he said.

On the other hand, others ask, why did the administration make a calculator that allows designers to leave out inpatient coverage? Why didn’t the law and regulations require hospital coverage for self-insured employers — as they do for commercial plans sold through online marketplaces?

“The law and calculator were purposely designed as they are!” Fred Hunt, past president of the Society of Professional Benefit Administrators, said in an email widely circulated among insurance pros. “No ‘glitch’ or unintended loophole.”

“That’s baloney,” said Robert Laszewski, a consultant to large insurers and a critic of the health law. “Nobody said we’re going to have health plans out there that don’t cover hospitalization. That was never the intention… I think they just screwed up.”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

TIME China

This Man Amputated His Own Leg: That’s How Bad China’s Health Care Crisis Is

Hebei farmer Zheng currently in Beijing where he is having prothesis made. July 2014.
Hebei farmer Zheng currently in Beijing where he is having prothesis made. Sim Chi Yin—VII for TIME

The horrifying case of Zheng Yanliang epitomizes the health care crisis in the world's most populous nation

In the early hours of April 14, 2012, Zheng Yanliang cut off his right leg. Racked by pain from arterial thrombosis, but unable to pay for the surgical amputation he needed, the corn farmer severed his limb with a hacksaw and a fruit knife. It took 20 minutes to grind through the bone.

Much is astonishing about Zheng’s ordeal — not least that he survived. Zheng, then 46, had been suffering from excruciating leg pain, when a doctor at a local clinic diagnosed him and explained that blood was barely getting to his lower limbs. The right leg would need to be removed.

Zheng and his wife traveled from their dusty village of Dongzang, in China’s eastern Hebei province, to a public hospital in Beijing. There, they were told to produce about $48,000 in cash as a deposit. Zheng made about $400 in a good month, so he went home. Months passed. Maggots infested his dying limb. By the time he put sawtooth to skin, he says, the pain was so dreadful that he was happy to see his leg gone.

When Zheng’s story hit the headlines last fall, it turned the farmer into a folk hero. Like Zheng, ordinary Chinese are frustrated with China’s health care system: long waits, shoddy service, high costs. “The [Zheng] case epitomizes the sustained failure of the government to provide a solution to the problem of affordability and access,” says Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations, a U.S. think tank.

For the international editions of this week’s magazine, I wrote about China’s efforts to overhaul its ailing health care system (read the full story here). In 2009, Beijing pledged about $173 billion over three years for public health care. They say 95% of Chinese are now insured (and happily note they achieved this level of coverage before the U.S.). The state now reimburses more of each treatment — up to 70% for some serious illnesses.

But stop any person on the street, and they’ll tell you that the scope of the insurance is spotty and costs are too high. Dr. Bernhard Schwartländer, the World Health Organization’s representative in China, says people may be covered but “they need to work on what is covered and how much it costs.”

In a speech to China’s National People’s Congress, delegate Dr. Zhong Nanshan, a respected physician and veteran of the SARS outbreak, argued that China must do more. In less than 10 years, health spending has jumped from 3% to 5% of GDP — a “great effort,” he said, but still less, by GDP, than Afghanistan. Doctors are exhausted and disillusioned and the general public still finds it difficult and expensive to receive care.

Take farmer Zheng. When his local hospital couldn’t treat his leg pain, he went to the city. If he had the deposit, he could have been admitted and the rural insurance scheme may have reimbursed some of the costs of his care — an improvement over years past. But he did not have the deposit. So he took a hacksaw and fruit knife to his leg and risked his life.

For Zheng, help came only after he contacted a local reporter. When people heard his story, donations from party cadres and concerned citizens flooded in. A year and a half after the DIY amputation, his other leg, which was also affected, was removed in a hospital free of charge. He greeted reporters at his home in Dongzang village in the presence of local officials who, while declining to introduce themselves, made a point of reminding Zheng how much the authorities had done to help. Was Zheng satisfied with his treatment? “I’m just a farmer,” he said. “I don’t know about such things.”

When another blood clot landed Zheng in the hospital, reporters were forbidden from asking him questions. In a hallway patrolled by uniformed security personnel, Zheng’s wife told TIME that they need money for hospital bills, prosthetics and rehabilitation. “It’s a very bad situation,” she said. “We are running out of time.”

So is the rest of China.

— With reporting by Gu Yongqiang in Beijing and Changsha.

MONEY

Why You Can’t Wait Until You’re Sick to Buy Insurance

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Q. Let’s say an uninsured person is in a car accident, has emergency surgery, and is hospitalized, and after awaking from surgery asks to purchase insurance right away. Under the health law, would his medical costs be covered since he can’t be denied insurance because of a pre-existing medical condition? An article I saw said the hospital would even enroll people and pay their premiums. Is that correct?

A. It’s unlikely that this hypothetical person would be able to sign up for coverage after being injured, says Judith Solomon, a vice president for health policy at the Center on Budget and Policy Priorities.

“It’s true that you can’t be denied because you have a pre-existing medical condition, but you generally have to sign up during an open enrollment period,” says Solomon. Employers generally offer insurance through an enrollment period in the fall. People buying coverage individually on or off the online marketplaces set up under the health law can sign up during open enrollment starting Nov. 15. But there’s a lag between when a person signs up and when coverage begins.

The reason for open enrollment is clear: If people could sign up anytime, chances are they would wait until they got sick to do so, wreaking havoc on the health insurance market that relies on spreading the insurance risk among sicker and healthier people.

Hospitals may sometimes pay premiums for patients’ existing policies or enroll people up front before they get sick. But in general it’s not possible to purchase coverage after you’ve already been injured and admitted to the hospital, says Solomon.

There is one important exception, however. Enrollment in a state’s Medicaid program for low-income people is open year round. If someone lives in a state that’s expanded Medicaid coverage to people with incomes up to 138% of the poverty level (currently $16,105 for an individual), enrollment would generally be retroactive to the first day of the month that the person applied for coverage. In addition, if someone was eligible for Medicaid during the three months preceding the application, medical care received during that time could be covered as well.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com.

MONEY Health Care

The Real Reason You’re Spending More on Health Care

Getty Images
Getty Images

A new survey finds that health insurance premiums are rising at a modest rate. But workers are facing far higher out-of-pocket costs.

U.S. health insurance premiums are going up only 3% this year, to an average of $16,834 for a family. Workers will pay about 20% of that cost, or $4,823, according to a study released today.

The Kaiser Family Foundation’s 2014 Employer Health Benefits report says that rate increases are slowing from recession highs that ran far above inflation rates. In the past 10 years, healthcare premiums rose a cumulative total of 69%.

However, the big leap in deductibles offsets the good news for consumers.

“If you told the average working person that healthcare costs were at record-low increases, they’d look at you like you were a little bit crazy,” says Kaiser chief executive officer Drew Altman. “Out-of-pocket costs are way up, while their wages are relatively flat.”

While insurers and employers kept premiums in check over the past few years, deductibles are up 47% since 2009. The average deductible now stands at $1,217—at least $1,000 for 41% of workers and $2,000 or more for 18%.

The shift to high deductibles is even starker at companies with fewer than 200 employees. Some 61% of these workers have deductibles of at least $1,000.

“This has a big impact on working people,” says Altman. “It can be a real disincentive to get care.”

Kaiser surveyed 2,052 employers from January through May.

During open enrollment season, when employees choose their healthcare plans for the following calendar year, most do not pay close attention to their choices. A recent study by insurer Aflac shows that 41% of workers spent less than 15 minutes researching their benefits in 2013, and 90% keep the same benefits year after year.

Some companies only offer limited choices or even just one option. Even so, employees need to make other decisions during open enrollment and need the information supplied at that time to make crucial budgeting plans, says Kathryn Paez, principal researcher for the American Institutes for Research.

Among her suggestions:

  • Compare the summary of benefits and coverage for each available plan.
  • Come up with a rough estimate of how many doctor visits you typically have in a year and what medication costs will be.
  • If you foresee any major costs, like for the birth of a child or root canal surgery, consider contributing to a flexible spending account or health savings account for this purpose. For 2015, workers can put up to $2,500 in a flexible spending account and $3,350 in a health savings account for an individual and $6,550 for a family.

 

MONEY Health Care

Early Analysis Finds a Drop in Obamacare Premiums Next Year

A first look at policies sold on the online exchanges shows a small decline in the average cost of coverage for 2015. But consumers should still shop for health insurance with care.

In preliminary but encouraging news for consumers and taxpayers, insurance filings show that average premiums will decline slightly next year in 16 major cities for a benchmark Obamacare plan.

Prices for a benchmark “silver” or mid-priced plan sold through the health law’s online marketplaces aren’t all moving in the same direction, however, a report from the Kaiser Family Foundation (KFF) shows. (Kaiser Health News is an editorially independent program of the foundation.) In Nashville, the premium will rise 8.7%, the largest increase in the study, while in Denver it will fall 15.6%, the largest decrease.

But overall the results, based on available filings, don’t show the double-digit percentage increases that some have anticipated for the second year of marketplace operation. On average, rates will drop 0.8% in the areas studied.

“If you’re the government, this is great news,” said Larry Levitt, KFF senior vice president. “Competition in the marketplaces is helping drive down the cost of the tax credit” that subsidizes coverage for lower-income consumers.

That’s because the credits are based on the cost of the second least-expensive silver plan, known as the benchmark plan. That’s the one KFF studied. The lower the benchmark-plan rates, the lower the cost to taxpayers.

For consumers, the picture is also promising—but more complicated.

The main message: shop around, says Levitt.

The fact that average premiums in selected cities are declining doesn’t mean your rates will fall. Premiums may vary significantly within states. Premiums for plans with different benefit levels—higher platinum and gold and lower bronze—may behave differently than prices for silver plans. And just because your policy was the least expensive in your area for 2014 doesn’t mean it will stay that way for 2015.

Bottom line: There is increased competition as more insurers enter the marketplaces and tune prices to attract customers. But you may need to switch plans to take advantage of that.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

New Ways to Handle the High Costs of Infertility

Empty crib with stork and baby on wall
Onur DAngel—Getty Images

Even with health insurance, couples face daunting expenses when they have trouble conceiving. Now a few organizations are stepping in with creative financing options.

Infertility treatment is a numbers game in some respects: How many treatments will it take to conceive a child? And how much can you afford?

Even as insurance plans are modestly improving their coverage of such treatments, clinics and others are coming up with creative ways to cover the costs to help would-be parents reduce their risk for procedures that can run tens of thousands of dollars. Some even offer a money-back guarantee if patients don’t conceive.

Shady Grove Fertility, a large center with sites in Maryland, eastern Pennsylvania, and Washington, D.C., has a number of programs to help people afford infertility treatment. The center pioneered a “shared-risk” program for in vitro fertilization (IVF) treatment years ago that offered a 100% refund if a couple didn’t have a baby. Now the center offers a similar program for couples who use donor eggs to conceive. Other fertility centers offer versions of these programs.

Both Shady Grove shared-risk programs allow couples to try up to six cycles of IVF or donor eggs for a flat fee. If they don’t have a baby, they get the full amount back; couples can also stop at any point in the process and get a full refund. The program costs twice as much as a single cycle—$20,000 for shared-risk IVF and $30,000 for shared-risk egg donor.

“In reality, patients who get a baby on the first cycle are subsidizing those who don’t get a baby,” says Michael Levy, president and IVF director at Shady Grove. “We see this as an opportunity to give patients security regarding the financial risk that they face.”

Tina and Jimmy Stone opted for the $30,000 shared-risk egg donor program. Tina’s uterus was healthy but her ovaries weren’t producing viable eggs. The Hollywood, Md., couple became pregnant with twins on the third try. The twin boys are now 2, and their daughter, who is adopted, is 8.

“For us, it was worth it,” says Tina, 35, who says the couple financed the shared-risk program through a private personal loan. “It kept our options open if it didn’t work, whereas if you pay per cycle, you’ve paid for nothing if it doesn’t work.”

A report by the ethics committee at the American Society for Reproductive Medicine found that shared-risk programs can be acceptable if patients are fully informed about the criteria for success and program costs, among other things.

Shared-risk and other programs are popular in part because health insurance coverage for infertility treatment, while slowly improving, is still sparse. Fifteen states require insurers to cover infertility treatment to varying degrees, according to Resolve, an infertility advocacy group. Among employers with more than 500 workers, 65% cover a specialist evaluation, 41% cover drug therapy, and 27% cover in vitro fertilization, according to human resources consultant Mercer’s 2013 employer benefits survey. Thirty-two percent of large companies don’t cover infertility services at all.

Glow is one of the most recent companies to offer a program to help address the financial uncertainties around infertility and treatment. The company, which is best known for an app that helps women track ovulation and other pregnancy-related health data, started Glow First last August for couples worried about infertility.

Participants pay $50 monthly for up to 10 months. The money is pooled with contributions from people who also started the program that month. At the end of 10 months, those who haven’t become pregnant split the pot of money; Glow will pay their share to an accredited infertility clinic once they submit their bills for fertility testing or other services.

The program isn’t open to people who’ve already received treatment for infertility.

The first group that began contributing in October 2013 has just ended. Roughly 50 people participated, according to the company. The average age was 34, and the typical participant had been trying to get pregnant for a year. The payout to those who didn’t become pregnant was $1,800.

“This relatively minimal contribution will help to offset those downstream and very high costs” of fertility testing and treatment, says Jennifer Tye, Glow’s head of marketing and partnerships.

There are other ways to manage the cost of infertility treatment. In addition to shared-risk programs, many fertility clinics offer other discounts and financing options to help couples afford treatment. Other companies also offer financing and/or infertility insurance to help cover the costs for couples who are working with a surrogate to have a baby, for example, or for IVF treatments.

“I think it can be confusing for people,” says Barbara Collura, president and CEO of Resolve. “There’s no one place to go to learn all the different financing options.”

Most fertility clinics have someone on staff who will sit down and and talk with prospective patients about the costs they’ll be responsible for and financing options that are available, says Collura.

“Exhaust all the obvious choices with your insurance and whatever financing programs the clinic might participate with,” says Collura. “Then do research to fill in.”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

Why a Trip to the ER Could Cost You More Than You Expect

If a holiday weekend mishap sends you to the emergency room, watch your wallet. You shouldn't owe more if the hospital is outside your insurance network. But that could change if you're admitted.

When you need emergency care, chances are you aren’t going to pause to figure out whether the nearest hospital is in your health insurer’s network. Nor should you. That’s why the health law prohibits insurers from charging higher copayments or coinsurance for out-of-network emergency care. The law also prohibits plans from requiring pre-approval to visit an emergency department that is out of your provider network. (Plans that are grandfathered under the law don’t have to abide by these provisions.)

That’s all well and good. But there are some potential trouble spots that could leave you on the hook for substantially higher charges than you might expect.

Although the law protects patients from higher out-of-network cost sharing in the emergency room, if they’re admitted to the hospital, patients may owe out-of-network rates for the hospital stay, says Angela Gardner, an associate professor of emergency medicine at the University of Texas Southwestern in Dallas who is the former president of the American College of Emergency Physicians.

“Even if the admission is warranted, you are subject to those charges,” she says.

If you live in a state that permits balance billing by out-of-network providers, your financial exposure could be even greater. In a balance-billing situation, a hospital may try to collect from the patient the difference between what the hospital billed and what the health plan paid for care. Such practices aren’t generally allowed if a consumer visits an in-network provider.

Consumers shouldn’t expect that the hospital will inform them of potential out-of-network coverage issues, so they need to inquire, says Gardner.

“At least being informed and knowing what you’re getting into can set you up to handle it with your insurer,” she says.

And while you’re at it check into being transferred to an in-network facility if it’s feasible.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Insurance

Why Millennials Resist Any Kind of Insurance

Young adults are the most underinsured generation of our time, which makes sense—up to a point.

Millennials are the most underinsured generation alive today—which makes a certain amount of sense. They have relatively few assets or dependents to protect. Still, the gaps in coverage are striking and offer further evidence that this generation has been unusually slow to launch.

Roughly one in four adults aged 18 to 29 do not have health insurance, twice the rate of all other adults, according to a survey from InsuranceQuotes.com, a financial website. (Other surveys have found lower uninsured rates, but this age group is still the most likely to go without.) Millennials are also far less likely to have auto, life, homeowners, renters, and disability coverage.

Young adults have always been slow to buy insurance. They often feel invincible when it comes to potential health or financial setbacks. But something additional appears to be at work here. This generation has famously overprotective parents who awarded them trophies just for showing up. Millennials may view moving back home or calling Mom and Dad for a bailout as their personal no-cost, all-purpose insurance plan.

Millions of young adults routinely boomerang home after college or get other family financial support. The trend is so broad that psychologists have given this new life phase a name: emerging adulthood, a period that lasts to age 28 or 30. MONEY explores this trend, and its costs, in the September issue reaching homes this week. Remarkably, the parents of boomerang kids don’t seem to mind providing the extended support.

A quarter of parents supporting an adult child say they have taken on additional debt; 13% have delayed a life event, such as taking a dream vacation; and 7% have delayed retirement, the National Endowment for Financial Education found. Yet 80% of such parents in a Bank of America Merrill Lynch survey say helping is “the right thing to do,” and 60% are willing to work longer, 40% to go back to work, and 36% to live with less if that’s what it takes to help their adult kids.

“Millennials have had very supportive parents throughout their life,” says Laura Adams, senior insurance analyst at InsuranceQuotes.com. “When you don’t have a fear of the unknown, a fear of life’s what-ifs, you are not likely to think about insurance.”

Yet young people overlook certain types of insurance at their peril—even though these policies may be relatively inexpensive. Most striking is how many skip health insurance, even though the Affordable Care Act mandates coverage and allows children up to age 26 to remain on a parent’s plan. Millions more young people now have health coverage as a result, recent studies have found, and their uninsured rate has dropped. But, still, as many as one in four still go without.

This may be classic pushback against a law young adults see as unfair. They understand that their insurance premiums subsidize the health benefits of older Americans who are far more likely to need care. Yet if Mom and Dad won’t pick up the bill, a visit to the ER can cost $1,000 or more for even a simple ailment. Things get much more expensive for broken bones and other treatments that even the young may need. Among other findings:

  • 64% of millennials have auto insurance, compared to 84% of older generations. Many millennials may have decided to skip car ownership. But if you rent a car or borrow one from your roommate, you have liability. It probably pays to have your own policy, which might cost $30 a month.
  • 10% of millennials have homeowners insurance, compared to more than half of those aged 30 to 49 and 75% of those 65 and older. Fewer millennials own a house, for sure. But this generation isn’t buying renters insurance either: only 12% have it. Renters insurance is cheap: $10 to $15 a month, and it comes in handy not only when someone steals your bike from the storage area but also if Fido bites a neighbor.
  • 13% of millennials have disability insurance, compared with 37% of those 30 to 49. This kind of coverage costs around $30 a month and may seem unnecessary. Yet one in three working adults will miss at least three months of work at least once in their life due to illness, Adams says, adding, “Anyone can throw out their back.”
  • 36% of millennials have life insurance, compared with 60% of those 30 to 49. Again, this coverage is relatively cheap: around $20 a month for $500,000 of term life. If you have no dependents you might skip it. But if you have debt that Mom and Dad co-signed, you should have enough coverage to retire the debt. It’s only fair, given your parents’ years of extended financial support.

 

 

MONEY Health Care

How Some Insurers Still Avoid Covering Contraception

Locked up birth control pills
Nicholas Eveleigh—Getty Images

Under health reform, your birth control should be fully paid for by insurance. But even before the Supreme Court gave more employers an out, some insurers have been pushing back.

How much leeway do employers and insurers have in deciding whether they’ll cover contraceptives without charge and in determining which methods make the cut?

Not much, as it turns out, but that hasn’t stopped some from trying.

Kaiser Health News readers still write in regularly describing battles they’re waging to get the birth control coverage they’re entitled to.

In one of those messages recently, a woman said her insurer denied free coverage for the NuvaRing. This small plastic device, which is inserted into the vagina, works for three weeks at a time by releasing hormones similar to those used by birth control pills. She said her insurer told her she would be responsible for her contraceptive expenses unless she chooses an oral generic birth control pill. The NuvaRing costs between $15 and $80 a month, according to Planned Parenthood.

Under the health law, health plans have to cover the full range of FDA-approved birth control methods without any cost sharing by women, unless the plan falls into a limited number of categories that are excluded, either because it’s grandfathered under the law or it’s for is a religious employer or house of worship. Following the recent Supreme Court decision in the Hobby Lobby case, some private employers that have religious objections to providing birth control coverage as a free preventive benefit will also be excused from the requirement.

In addition, the federal government has given plans some flexibility by allowing them to use “reasonable medical management techniques” to keep their costs under control. So if there is both a generic and a brand-name version of a birth-control pill available, for example, a plan could decide to cover only the generic version without cost to the patient.

As for the NuvaRing, even though they may use the same hormones, the pill and the ring are different methods of birth control. As an official from the federal Department of Health and Human Services said in an email, “The pill, the ring and the patch are different types of hormonal methods … It is not permissible to cover only the pill, but not the ring or the patch.”

Guidance from the federal government clearly states that the full range of FDA-approved methods of birth control must be covered as a preventive benefit without cost sharing. That includes birth control pills, the ring or patch, intrauterine devices and sterilization, among others.

But despite federal guidance, “we’ve seen this happen, plenty,” says Adam Sonfield, a senior public policy associate at the Guttmacher Institute, a reproductive health research and education organization. “Clearly insurance companies think things are ambiguous enough that they can get away with it.”

If you are denied coverage, your defense is to appeal the decision, and get your state insurance department involved.

“The state has the right and responsibility to enforce this law,” says Sonfield.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

More on the Affordable Care Act and contraception coverage:

 

 

 

 

 

MONEY Health Care

What It Really Means When Your Doctor Says He Doesn’t Take Insurance

A denial may not be as straightforward as it seems. Here's what your doctor's policy could be—and what that could mean for your medical bills.

Some doctors really mean it when they say they do not take health insurance. For others, it is more of a nuanced statement.

Consumers trying to decipher the difference have to ask a lot of questions to figure out how to manage their bills.

Here are the three key scenarios facing consumers:

1. “I do not take your insurance, but I will work with you on the price.”

A growing number of doctors simply are not taking contracts with insurance companies, although the concentration varies by region and by specialty. That leaves patients to pay the market rate the doctor charges, and then submit a receipt to get reimbursement for out-of-network coverage, if they have it.

In some cases, the pickings can be slim for in-network docs. For example, 45% of psychiatrists do not participate in insurance networks, according to JAMA Psychiatry.

“The burden of getting the forms right and getting all the paperwork is placed on the physician,” says Dinah Miller, a psychiatrist who practices in Baltimore and co-authors a blog called Shrink Rap. “If you’re seeing eight or nine patients a day, and several bounce, it’s a lot of uncompensated time.”

Primary care physicians are opting out, too. Some are moving to a concierge model, in which patients pay a subscription fee like $150 a month to see their doctor.

Membership in the Association of American Physicians and Surgeons, a conservative-libertarian group of private-pay doctors, increases by about 10% a year, says Jane Orient, executive director of the organization, which has 5,000 members.

Many doctors who say they don’t take insurance will make deals with patients on an individual basis. One key negotiating tip is to know what your in-network rate would be, typically a discount of about 40%, suggests Joe Mondy, a spokesman for insurer Cigna.

You can get this information through your provider’s online tools or by calling the customer service line. But Mondy says to be aware that the private provider is not bound to accept that price.

2. “I will submit the receipt for you, see what I get from the insurance company and work with you on the difference.”

This process is typically referred to as balance billing. It is largely frowned upon for in-network charges, and even restricted in some states. But it still goes on in the private-pay world, and often results in a confusing morass of paperwork.

Even insurance executives find themselves negotiating the fray. Chris Reidl, director of product for national accounts at insurer Aetna, paid an up-front fee to one doctor and then submitted the bill to the insurance company. When the insurance company reimbursed the doctor for the visit, the office refunded the fee she had paid.

Consumers need to be on top of this process and pour over their benefits statements to track the various payments. They also need to keep after their doctors’ offices to get their money back.

3. “I will try to negotiate a better rate with your insurance company.”

Some providers have back-channel communications with insurance companies, trying to get a better reimbursement so their patients end up paying less out of pocket.

Amy Gordon, a lawyer focusing on benefits issues at McDermott, Will & Emery in Chicago, facilitates some of these discussions, trying to get everyone on the same page.

Gordon gives the example of a chiropractor who has a number of patients on one employer’s plan. The going rate for a visit is $200, and the out-of-network reimbursement offered is $50. The provider has to choose whether to charge the patients the remainder or discount it.

“Being out $150 for one person is bad, but being out that much for 10 people is worse,” she says. So the provider tries to get more from the insurance company, and the insurance company tries to get the provider to join its network. The insurer and the doctor may end up settling on an $80 reimbursement, and the patients only have to pay the equivalent of a $20 co-pay.

“A lot of this can be avoided with planning, and finding if there is an acceptable in-network provider,” Gordon says. “If you still want to go out of network, you can ask the insurance company to give you an estimate of what they would pay, and then you can at least make a more informed decision.”

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser