Know Your Health Insurance

By Cheyenne Kent

Seniors looking for bargains in health insurance should be well-informed when shopping around. This will help them avoid future headaches because insurance rarely pays at 100 percent.

As Medicare is the reigning queen for this demographic, every beneficiary should know that Medicare pays out only at 80 percent of what they approve, and Medicare must approve the charges.

That leaves the 20 percent coinsurance for the beneficiary to pay, and it is wise to have a secondary insurance to pick up the remaining charges. Before the policy is signed, ensure it is not a Medicare Advantage Plan. This takes the place of Medicare and this then would become your primary insurance, also called Medicare Part C. This is not a secondary insurance!

These Medicare Advantage Plans are offered by big underwriters such as Blue Cross and Blue Shield, Cigna, Aetna, and United Healthcare. These plans, Medicare.com says, “provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage and must cover medically necessary services. They generally offer additional benefits, and many include Part D prescription drug coverage.”

Medicare Advantage plans come in PPOs and HMOs, and save money by lowering out-of-pocket-costs when compared with original Medicare. These out-of-pocket costs vary by services offered and the policy chosen. The HMO’s costs are lower, however they require referrals or authorizations and normally have different rules. They also usually specify which doctor or provider of service the patient has to go to. These normally pay out at 90 or 80 percent, still leaving the patient with a coinsurance.

Although the additional premiums of a secondary insurance seem a setback, they are good to have in the event of sudden major health issues. This happened to Delmar Lee, of Northwest Las Vegas, who said secondary insurances are very necessary when your age becomes advanced.

Lee, 75, a retiree, was diagnosed with non-Hodgkin’s lymphoma on Jan. 10, 2010. Lee carries both Medicare and AARP, who footed the bill for the research, discovery and chemotherapy of his lymphoma. He said the bills to both insurance companies exceeded eighty-thousand dollars before Medicare approval measures.

“The right insurance can be a lifesaver,” Lee said. “I didn’t have to pay anything extra. I am grateful for the well-qualified doctors and nurses that helped me face my challenges.”

In choosing a secondary insurance, the patient should know that true secondaries will pay whether the primary insurance pays or not, and supplementaries will only pick up a bill if the primary insurance pays. Also, be aware that secondary plans can still have a coinsurance for the subscriber or patient to cover. This means they will pay only a percentage of the coinsurance. By knowing the differences between these plans and how the claims process works, a patient will be able to determine if a secondary insurance will work out for them.

A secondary insurance processes a claim as primary with their own set rate. This is what they will pay for a procedure. They apply the primary insurance payment toward this number. How any insurance pays a claim is on a report they send to the patient and the provider of services. This report is called an Explanation of Benefits or EOB. Secondary insurances will not process a health insurance claim without this EOB. A EOB from a secondary insurance (or the primary insurance, if there is no secondary) serves as the first notification to the patient to pay their provider of service anything that is due.

By far however, the most important thing to know when shopping for health insurance is that the final choice will be the policy. Every health provider has to abide by it. When a patient calls to complain about the unexpected bill that just came in the mail, the billing department will tell them that it is the patient’s responsibility to know the terms and conditions of their own health insurance policy.

Think about the policy sitting on the table waiting for your John Hancock. Know your deductible. Know your coinsurance. Because, when the bill comes in the mail, the signature on the dotted line will leave no doubt that you already agreed to pay!

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