Blog - Page 3 of 4 - Creating the Future of Health Care

Hey Guys,

Today I’m going to teach you about the basic types of health insurance plans available on the market and their key differences. So even when you are thinking about the key health insurance equation (remember this??) you should also be thinking about which health insurance plan structure works best for you.

Let’s start with the basics…

So let’s review these key types of health insurance plans I mentioned plus a few additional types:

HMO (Health Maintenance Organization):

Requires you to designate a Primary Care Provider (PCP) and that PCP must refer you to see specialists. Without a referral, the insurance company will not cover any of the medical services you received and you will have to pay for it all out-of-pocket. (Note- women can typically go see their Ob-Gyn without a PCP referral and the services will be covered but confirm with your insurance in the Summary of Coverage and Benefits). Recall from the “Who is your PCP” blog post that even if you aren’t in an HMO product that requires you to designate and see a PCP, you should do this anyway for your own health outcomes and care coordination.
A narrow network of doctors that you can see. If you go outside the network you will have to pay out-of-pocket for the medical services you received. Note that this concept actually extends beyond just the doctors too so be really careful when you receive any medical services. This can also include anything from ambulances and hospitals to home health providers and durable medical equipment providers (things like wheelchairs, oxygen equipment, breast pumps, etc.)
Less expensive. The cost-sharing component is typically much lower in an HMO but be careful because if you end up going out-of-network by accident your costs could be exponentially larger. There is oftentimes no deductible and low premiums.

PPO (Preferred Provider Organization):

Allows you to see any specialists without a PCP referral.
Tiers of networks- if you see a doctor who is in-network the insurance company will pay a higher percentage of the costs than by seeing a doctor who is out-of-network. The network of doctors in a PPO is typically larger than an HMO.
More expensive. Because this is broadening your network and allowing you to choose which providers you want to see without a recommendation of medical necessity from a doctor (PCP) you will have to pay more for these benefits. This typically includes a deductible, higher premiums, and higher cost-sharing for going out-of-network.

POS (Point of Service):

Requires you to designate a Primary Care Provider (PCP) but you typically don’t need a referral from the PCP to see specialists.
Tiers of networks- if you see a doctor who is in-network the insurance company will pay a higher percentage of the costs than by seeing a doctor who is out-of-network. If you see an out-of-network doctor you typically need to file the claim yourself.
More expensive. Because this is broadening your network and allowing you to choose which providers you want to see without a recommendation of medical necessity from a doctor (PCP) you will have to pay more for these benefits.

EPO (Exclusive Provider Organization):

Allows you to see any specialists without a PCP referral.
A narrow network of doctors that you can see. If you go outside the network you will have to pay out-of-pocket for the medical services you received.
Mid-tier expensive since you can see any in-network doctors without a PCP referral.

CDHP (Consumer Driven Health Plan), also called HDHP (High Deductible Health Plan):

The layout of networks and PCP selection etc. will vary plan to plan.
Incredibly high deductible of at least $1,300 for an individual or $2,600 for a family and typically lower premiums.
Whether this is expensive or not for you and your family will depend on how many medical services you use and the structure of the plan.
Many come with an HSA- Health Savings Account– that allows you or your employer to put pre-tax money into the HSA and use the funds tax-free for qualifying medical expenses.

Here is a summary of each of these types of plans so you can easily compare:

Check out my blog next week where I will discuss CDHP’s in more detail. The CDHP is becoming more popular among employers as they are trying to balance both offering their employees health insurance while also reducing their spending on health care so I want to make sure we discuss in more detail.

See you next week and in the meantime…

Cheers to Health and Happiness!

Ps- This week on social media I will be posting the definitions of key terms we have been reviewing throughout the blog. Be sure to check it out and test yourself to see if you remember the definitions!

Health Insurance

What is the Individual Mandate??

November 30, 2017June 23, 2019 mnechrebecki

Hi Guys,

We’ve got a special edition v-blog here because, as you may have heard, there’s a lot going on over in Washington about repealing the individual mandate in the proposed tax reform bill.

Now, most folks are probably so confused about what the heck they are talking about and what the implications would be. So today I’m going to simplify some concepts and terms so that you can make your own decisions about what you think would be best for yourself, your family, and/or the People.

*Note- it is actually much more complicated than this but I’m going to keep it very simple for now.

First concept you need to understand is called a Risk Pool.

Risk Pool– the group of people that are in the same insurance plan. By being in that specific insurance plan, or risk pool, you are sharing risk across the other folks in the plan. For example, Medicare is a risk pool because it is one group of people that enter into the insurance plan and receive medical services in return. Other risk pools might be your company, if you work for a really large employer that pays for your health insurance, or a commercial insurance product like a BlueCross BlueShield, for example.

Before we continue, let’s learn more about risk pools by clicking on the photo below!

Now that you have a greater understanding of risk pools and how they work let’s talk about the Individual Mandate.

Individual Mandate: the requirement that all individuals purchase health insurance or else pay a small penalty for not having health insurance.

*Note- For the 2017 plan year, the fee is calculated 2 different ways – as a percentage of your household income or per person. You’ll pay whichever is higher when you do your taxes. The fee is 2.5% of household income or $695 per adult + $347.50 per child.

Now, why was the individual mandate built into health reform? In order to combat Adverse Selection, whereby people don’t pay their dues into the system but then when they become sick they purchase and use their health insurance. And don’t forget, all of us get sick at some point in our lives…

Adverse Selection: people who are sick are more likely to purchase health insurance.

So then what effect does removing the individual mandate have?

Cost of Care: when you have less healthy people paying into the system then the cost sharing (premiums, deductibles, etc.) is going to increase for everyone else who is paying into the system.

Let’s use an analogy of an amazing dinner buffet. I live in Los Angeles so I’m going to use delicious Souplantation as my example. Now the Brentwood Souplantation offers their dinner buffet at $11.99 per person for all you can eat. What a great deal! But what happens if people like me who only eat a small salad, soup, and dessert stop coming to Souplantation and people who are severely obese and eat five plates of food start coming to Souplantation? In order to cover their costs, Souplantation is going to have to increase their prices for the buffet for everyone who is coming to the restaurant or risk shutting down the restaurant. Now Souplantation might start charging $19.99 per person. But what if they start losing the business of the healthy people who say you know what, I don’t even eat $19.99 worth of food so it’s not worth coming, and Souplantation starts to lose more of the healthy customers it needs. This leads to…

Market Instability: the inability of health insurance companies to predict their risk pools’ enrollment numbers, risk profiles of those enrolling, and the cost of those enrollees.

Let’s continue on with the Souplantation example. Their customers are turning over like crazy! They’ve increased their prices but now they are getting more heavyset folks and they are having difficulties predicting how much food is going to be eaten and sometimes they don’t order enough and they run out of food, etc. You can see what a mess this has turned into! Now what happens? Souplantation decides to shut its doors and find a new location where the clientele is more predictable with a steady mix of customers who eat a lot and customers who eat a little.

So now that the insurance companies have increased prices and/or pulled out of the market as an option for the people, the third area of impact is coverage.

Coverage: The CBO estimates that due to adverse selection, the cost of care and market instability will increase such that an estimated 13 million people will lose coverage because they won’t have an affordable option for themselves and their families.

Who the heck is the CBO??

Congressional Budget Office (CBO): a strictly nonpartisan (doesn’t take political sides) group of economists and budget analysts who provide objective, impartial analyses of Congress’ proposals. CBO does not make policy recommendations, and each report and cost estimate summarizes the methodology underlying the analysis.

Now I hope I have provided enough of the basics for you to better understand what the individual mandate is and how it works so you can think about it for yourself and not necessarily along political lines!

As always, please let me know if you have any questions or comments and I hope you’re having a wonderful week!

Health Insurance

Health Insurance 101- Intro to Benefits

November 26, 2017July 1, 2019 mnechrebecki

Hey Guys and Gals! I’m sure you’ve been waiting in anticipation to learn more about BENEFITS!!

Before we get started, here is the quick recap of the three health insurance essentials so you can see where BENEFITS kicks in.

Three key essentials:

Cost Sharing
Benefits/Coverage
Networks

The gist: you need to find a health insurance plan that includes the BENEFITS, or medical services, that you need with the NETWORK of doctors and hospitals that you want to see with a COST SHARING setup that fits your budget.

Benefits/Coverage: which medical services you can receive that will be covered under the health insurance plan, or in simplified terms, what you get for your $$$.

Benefits that are covered in your insurance plan will range from who is providing the service (midwives, physical therapists, chiropractors, etc.) to where the service is provided (in the hospital vs outside the hospital in a clinic, skilled nursing facility, etc.) to how long the service can be provided (length of hospital stay for having a baby).

And where can you find all these details??

Summary of Benefits and Coverage– remember that document we talked about a couple weeks ago? This document, even though it looks incredibly daunting, is your best health insurance friend because it tells you what is covered and what it will cost! It will feel like reading the ingredients on a nutrition label or your prospectus when investing- it’s not exciting and there are going to be terms you won’t know but use Google and ask friends and read it because IT’S IMPORTANT!

Key tip to remember: Your COST SHARING is directly related to the size of your BENEFITS and your NETWORK. If you need or want more BENEFITS to be covered by your health insurance plan, and potentially the option of a larger NETWORK of doctors and hospitals, your COST SHARING will go up accordingly.

Now many of you have been asking me how to best take advantage of your benefits and my recommendation is this: Take advantage of your free annual preventive visit with your doctor. Most of you should have this with your insurance plan (or should select an insurance plan with one) and it’s important you use it!

Any question about BENEFITS? Comment below and as always…

Cheers to Health and Happiness!

Health Insurance

Health Insurance 101: Intro to Networks

November 19, 2017June 23, 2019 mnechrebecki

Hey Guys! Quick recap on what you should already know before we hit the ground running on NETWORKS.

There are three essential components you should know and feel comfortable with when selecting a health insurance plan:

Three key essentials:

Cost Sharing
Benefits/Coverage
Networks

Networks: the doctors and hospitals that will be covered and will “accept” your insurance plan, or in simplified terms, who you can see for less $$$.

Like I said… it’s very important that you review the network of doctors and hospitals included in the health insurance plan to make sure it includes the doctors you want to see.

Let me give you an example that I went through when selecting my dental plan…

My dentist is Dr. Ted and I’ve been going to him for years. Dr. Ted is the BEST dentist around- he’s friendly, he’s funny, he’s motivated by helping people, and heck I’ve never gotten a cavity (knock on wood!) Now when I started a new job and had to select my dental plan I had two options- HMO or PPO. So what did I do? I checked to see if Dr. Ted was in both networks. PPO networks are typically much larger than HMO networks and it turns out that Dr. Ted is in the PPO network but not the HMO network. Conclusion made– I’m selecting the PPO because for me I would rather pay more money for the PPO and get the high-value service from my current dentist who knows my teeth well.

The same applies to any plan you select, whether health insurance, dental, or vision insurance!

Now, this doesn’t limit you from seeing doctors who are “out-of-network”. Most of those doctors will still see you but if you are in an HMO you typically become a cash-paying patient where you have to pay for all services by yourself (“out-of-pocket”- remember that term??) with no help from the insurance plan you are currently paying for. If you are in a PPO the insurance may still cover some of it but it will be much more expensive than seeing an “in-network” provider.

Any questions on NETWORKS? Feel free to comment below and I look forward to seeing you next time when we chat about BENEFITS!

Cheers to Health and Happiness!

Health Insurance

Health Insurance 101: Intro to Cost Sharing

November 13, 2017June 23, 2019 mnechrebecki

Hello Everyone! I’m excited to continue on our Health Insurance 101 journey and get into the nitty-gritty of what you need to know about health insurance!

To give a quick recap, there are three essential components you should know and feel comfortable with when selecting a health insurance plan:

Three key essentials:

Cost Sharing
Benefits/Coverage
Networks

Today we are going to hone in on COST SHARING. Now, what the heck does that healthcare lingo mean??

Cost Sharing: the amount of money you must pay for medical care vs what the insurance company will pay, or in simplified terms, the $$$.

Cost sharing will differ both between health insurance plans (health insurance plan X will cost more for me over the entire year than health insurance plan Y) and within the health insurance plan itself, for example, you may have to pay more for an emergency room visit than a clinic visit. Let me explain in further detail…

Let’s start with some basic definitions of the $$$ terms you need to know:

Deductibles: the amount of money you must pay out-of-pocket before your insurance kicks in and covers any other medical services

Premiums: the monthly payment you make to have health insurance coverage

Copayments: a defined amount you pay per medical encounter

Coinsurance: a percentage of your medical bill that you pay

Out-of-pocket: this means the insurance won’t cover the cost and you pay for everything yourself (i.e. you pull your wallet out of your pocket… get it…)

Summary of Benefits and Coverage: this document lays out your benefits (which we will talk about in another episode) and the cost sharing associated with those benefits. Know and love this document- even though it looks frightening!

So a basic life scenario with COST SHARING goes something like this…

Every month starting in January I pay a monthly PREMIUM to the health insurance company so that I have health insurance. Let’s say in January I get my annual preventive checkup with my doctor but that has NO COST SHARING (yay!) because it is preventive care that the health insurance covers (check with your insurance to confirm). Then in March I break my foot and have a hospitalization costing $50,000. My DEDUCTIBLE is $5,000 (the amount I must pay before health insurance kicks in) and I also have a $250 COPAYMENT for the Emergency Room (ER) visit and $250 COPAYMENT for the hospitalization. Therefore, I owe $5,500 in medical bills (DEDUCTIBLE + COPAYMENTS) and the insurance will cover the rest. But don’t forget you still also have the cost of your PREMIUM that you pay on a monthly basis! Then I have a follow-up clinic visit with my doctor in April to make sure my foot is doing ok and I have a $20 COPAYMENT for the clinic visit…you get the picture!

Additional key points and recommendations:

As you can see health care and your portion of the cost sharing can be expensive. Make sure you have enough money in your savings to cover any emergencies!
Review your Summary of Benefits and Coverage so you know how much different types of care costs. For example, it is probably more expensive for you to visit the ER than for you to go to an urgent care clinic. It is probably more expensive for you to get a brand-name prescription instead of a generic. Review and know!!
AVOID COINSURANCE! You want to pick plans with copayments instead of coinsurance because you have minimal control over the size of your medical bills.

Let’s take the above example with COINSURANCE instead of COPAYMENTS. Let’s say my COINSURANCE is 20% of my hospital stay. Then I have my $5,000 DEDUCTIBLE plus $10,000 COINSURANCE (20% of $50,000) which leaves me paying $15,000 instead of $5,500. Yikes- AVOID COINSURANCE!

Now that we have gone through all the key Cost Sharing terms and example scenarios, let me know if you have any additional questions about the $$$ and I can be sure to address! Cheers to Health and Happiness!

Health Insurance

The Three Essentials of Health Insurance

November 6, 2017July 1, 2019 mnechrebecki

Hi Everyone!

Today is the special day everyone has been waiting for- to learn the key essentials that you need to know about picking your health insurance plan!

There are three key essentials:

Cost Sharing
Benefits/Coverage
Networks

I’ll touch on each of these briefly here but then we will go into more depth in each of the following episodes so be sure to follow along!

Here are the basics you should know and understand before we move on into the complexities:

Cost Sharing: the amount of money you must pay for medical care vs what the insurance company will pay. Cost sharing will differ both between health insurance plans and within the health insurance plan itself, for example, you may have to pay more for an emergency room visit than a clinic visit. We will get into more details in a separate episode but for now, think the $$$ you have to pay.

Benefits/Coverage: which medical services you can receive that will be covered under the health insurance plan. This ranges from who is providing the service (midwives, physical therapists, chiropractors, etc.) to where the service is provided (in the hospital vs outside the hospital in a clinic, skilled nursing facility, etc.) to how long the service can be provided (length of hospital stay for having a baby). We will get into more details in another episode but for now, think what you get for your $$$.

Networks: the doctors and hospitals that will be covered or who will “accept” the insurance plan. This doesn’t mean you can’t go to someone who is “out of network” but it means your insurance won’t cover it and you will need to pay all the medical bills yourself, what we call in the industry “pay out-of-pocket”. We will get into more details in another episode but for now, think who you can see for less $$$.

So here’s the gist: you need to find a health insurance plan that includes the BENEFITS, or medical services, that you need with the NETWORK of doctors and hospitals that you want to see with a COST SHARING setup that fits your budget.

Any questions on these three essentials of health insurance? Let me know in the comments below! Otherwise, I’ll see you in our next episodes where we delve into each of these in turn!

Cheers to Health and Happiness!