- Children Diagnosed With Cancer: Financial and Insurance Issues
- Covering the costs of cancer treatment
- Private health insurance options
- Types of private health plans for children
- How to manage your child’s health insurance
- Getting answers to insurance-related questions
- Keeping records of your child’s insurance and medical costs
- Handling a health insurance claim denial
- Keeping employer-sponsored health insurance coverage
- Government-funded health plans
- Who regulates insurance plans?
- Options for uninsured children
- What sources are available to help with treatment costs if my child doesn’t have insurance and there’s no public assistance available?
- Financial issues for families: Getting help with living expenses
- To learn more
Types of private health plans for children
There are many different types of health insurance and health service plans. Most insurers work to contain costs by requiring that hospital admissions, tests, treatment, and specialized care be approved ahead of time. This might be called pre-approved, pre-authorized, or pre-certified. Insurers often limit benefits and pass along some of the costs to their enrollees. Families must be ready to deal with many phone calls, lots of paperwork, ongoing follow-up, and careful record keeping. This is a lot to add to your schedule. And it’s even harder when you’re worried about your sick child and all the other problems illness can cause.
Co-payments or co-pays are the amount you must pay at the time of service, usually a flat fee for office visits or other services. Sometimes co-pays are confused with co-insurance, but they’re not the same.
Co-insurance is a percentage of the bill you must pay even after you’ve paid the yearly deductible amount.
The deductible is the amount that you must pay each year for health services before the insurance plan will pay anything.
Types of health insurance plans
Here are very brief descriptions of the most common types of health insurance plans:
Managed care plans
These plans typically coordinate or “manage” the health care of enrollees. There are different types of managed health care plans. Some plans – like health maintenance organizations or HMOs – have a more limited network of providers and hospitals while other models like Preferred Provider Organizations (PPOs) have a wider provider network.
Most managed care plans have lower premiums and co-payments (co-pays) than traditional fee-for-service insurance. Co-insurance may also be less.
Premiums, co-pays, and co-insurance amounts can differ between managed care companies and even between services within the same company. There’s usually no need to file claim forms.
Some managed care plans require members to use a primary care provider who coordinates all of the patient’s care and serves as a “gatekeeper” for care from specialists. The gatekeeper is usually a primary care doctor who’s responsible for the overall medical care of the patient. This doctor organizes and approves medical treatments, tests, specialty referrals, and hospitalizations. For example, if your child needs to see an expert like a lung specialist, you would need a referral from the primary care doctor before the specialist sees the child. Otherwise your plan may not pay.
Under most managed care plans, members must use only the services of certain providers and institutions that have contracts with the plan. Some plans do not require prior approval (also called pre-authorization), but do require that members choose to get their care from a list or network of providers. When parents choose to go outside the network for their child’s care, they generally have to pay more, or even pay for the full service with no help from their health insurance plan.
Many different types of institutions and agencies sponsor managed care plans, not just insurance companies. These include employers, hospitals, labor unions, consumer groups, the government, and others. It helps to know all the ins and outs of the plan and how it will affect your child’s care.
These are the most common types of managed care plans:
- Health maintenance organizations (HMOs): An HMO will usually cover most expenses after a modest co-pay. HMOs often limit your choice of providers to those in their approved provider network. This means you have to check their listing to be sure the doctor you want your child to see is one of their doctors. If not, the bill may not be covered in full, and you may have to change to a different type of health plan to get that doctor’s services covered. Or you might have to switch to one of the approved doctors on their list.
- Point of service plans: A point-of-service plan (POS) is a type of HMO. The primary care doctors in a POS plan usually refer you to other doctors in the plan or network. If your child’s doctor refers you to a doctor who isn’t in the plan (he or she is out of network), the plan will still pay all or most of the bill. But if you choose to take your child to a doctor outside the network, you’ll have to pay co-insurance, even if the service is covered by the plan. Co-insurance is usually a certain percentage of the cost for each service. For example, the insurance company may pay 80% of the bill and you have to pay the other 20%.
- Preferred provider organizations: The preferred provider organization (PPO) is a hybrid of fee-for-service and an HMO. Like an HMO, there are only a certain number of doctors and hospitals your child can use to get the most coverage. When your child uses those doctors (sometimes called preferred or network providers), most of the medical bills are covered. When you don’t use these providers, the PPO makes you pay more of the bill out of your own pocket. So you pay more to choose providers that aren’t in the network.
Getting the most from your managed care plan: Sometimes you have to go out of network for your child’s care. You may be able to reduce your costs if you discuss and negotiate costs up front with doctors, clinics, and hospitals when surgery, procedures, or other treatments are planned. You can start with the billing department to find out the usual costs of the treatment your child needs. You may want to contact your insurer to find out what the company will pay and how much you’ll have to pay. You can use this information to find out if the medical facility or clinic will be willing to accept the amount paid by insurance as full payment. If not, ask if they’re willing to discount the portion you have to pay.
Fee-for-service plans are the least restrictive plans that offer the most choice in medical providers. They are also called indemnity or traditional health plans. If you have this type of health insurance, you can choose any doctor who accepts your particular health insurance plan, change doctors any time, and go to any hospital anywhere in the United States.
You pay a monthly fee, called a premium. Each year, you also have to pay a certain dollar amount of the medical costs (known as the deductible) for each family member before your insurance will start to pay. After you have met your child’s deductible, your insurance will pay a set percentage of the medical bills for the rest of the year.
You might have to pay your medical bills yourself and then fill out forms and send them to your insurer to get reimbursed (paid back) for what you’ve already paid. If your doctor “accepts” your insurance, their office will often bill the insurance company for you, and then send you a bill for the amount your insurance didn’t cover. Keep receipts of your child’s drugs and other medical costs, and any payments made by you and your insurance company. This paperwork can help you greatly if there’s a dispute about payments or other problems in the future.
After your stated deductible is met, the insurance company pays a percentage (70% to 80% is common) of the covered costs submitted to them. The percentage they pay is based on what they consider to be “usual, customary, and reasonable” (UCR) charges. The insurance company decides what the UCR charge is. If your child’s doctor charges more than the UCR, you may get a bill for the balance in addition to your usual co-pay percentage. This is called “balance billing.”
Things to consider when shopping for health insurance
For children living with cancer it’s especially important to choose the health insurance plan that best meets their needs. When comparing plans, consider a number of factors, including:
- What are the total benefits covered by the plan?
- What are all of the costs associated with the plan, including premiums, deductibles, co-pays, and co-insurance?
- Are your child’s providers included in the network of doctors and hospitals covered by the plan?
- Does the plan cover the prescription drugs your child takes? For some ideas on how to check this, see the American Cancer Society Cancer Action Network (ACS CAN) document Tips for Choosing a Health Insurance Plan with the Best Prescription Drug Coverage for You.
For more on selecting an insurance plan, see the section called “Options for uninsured children.”
Other things to know about finding health insurance for children
Fake health insurance and other deceptions
There have always been people who look to profit from the needs and hardships of others. Now they’re exploiting the health care law in many different ways. They may advertise on hand-lettered signs, post ads on Internet sites, or go door to door. They may be completely “fly-by-night” or they may have a legitimate-sounding 800 number. But here are the basic approaches to watch for:
A common tactic is to offer a stripped-down insurance policy that doesn’t meet the law’s requirements for covering major illness. These policies are cheap because they make you pay for most of your child’s care. By the time you find out your child has a serious illness it may be too late to get real coverage.
Another way is to offer a medical discount card that gives you minor discounts but leaves the big payments up to you. Sellers might call this “coverage” or “protection,” but it’s neither. Discount cards can be helpful, but they don’t take the place of health insurance.
Some offer completely fake health insurance. The seller takes your money and gives you a worthless piece of paper. They may promise lower rates if you buy now. The seller might say that they’re “required” to offer this great, low-cost coverage by the Affordable Care Act. Sometimes scammers say that it’s government-sponsored insurance or that they work for the government. Or they’ll use a well-known insurance company’s name, even though they don’t work for the company.
Some fraudsters have gone to great lengths to create websites that mimic official marketplace websites. These sites are designed to fool people into thinking they’re on an official marketplace site. They may offer anything from fake health insurance to a policy that doesn’t cover serious illnesses. Be sure you are on www.healthcare.gov, your state’s official website, or a site they refer you to before entering any personal information.
Identity theft scams
A final way that scammers exploit you is by trying to get your personal and financial information for identity theft. Some might even call and pose as government workers looking to “update” your information, asking for your date of birth, Social Security number, or bank account numbers.
According to the Federal Trade Commission (FTC), federal government employees never call you to update your insurance data. Instead of responding to a call like this, contact your plan directly to see if they called. You can get your plan’s toll-free phone number by going to www.healthcare.gov or calling 1-800-318-2596.
If you get such a call from a scammer, notify the FTC online at www.ftccomplaintassistant.gov or call 1-877-382-4357 (1-877-FTC-HELP).
How to spot scammers
The best way to avoid scammers is to shop for your insurance at www.healthcare.gov or by calling 1-800-318-2596. Scammers may still call, but your insurance choices can be safely made on the marketplace without regard to the scammers’ efforts.
If you want to find out more about non-marketplace plans, watch out for aggressive sales people, very low premiums, and a push for you to sign up right away. Scammers may try to evade your questions, and often don’t have the full policy details in writing. Some offer you coverage only if you join an association, union, or other group. You may not get an insurance card or policy for some time after you sign up, if ever. And when you file a claim, there’s no response or a very slow response; when you call they explain it’s a glitch or processing error – if they answer at all. Here are some tips to help you protect yourself.
- Do not give them money, but especially don’t give them credit card information, birth dates, Social Security numbers, or bank account numbers unless you’re sure of who they are and what you’re getting.
- Ask for the Summary of Benefits and read it carefully (see “How to manage your health insurance” in this section). Read the full policy or have someone read it for you.
- Check out any association you have to join to get insurance – go online, be sure they have a street address, and find out if they have any legitimate activity besides selling insurance.
- Call your state insurance department to be sure the plan is licensed in your state; also ask if the plan has had complaints made against it. (See the “To learn more” section to find your state insurance department.)
- Finally, check with your child’s doctor and pharmacist to be sure they accept the plan.
Treating and managing most cancers costs a lot of money. Some insurance plans offer supplemental coverage called catastrophic coverage with high deductibles and fairly low premiums.
Catastrophic illness insurance is sometimes called a hospital-only or short-term plan. These plans often won’t cover doctor visits, medicines, or routine care, but kick in when your child is hospitalized and has very high expenses. Depending on the policy, expect to pay a few thousand dollars for the deductible alone, some percentage of co-insurance on the rest of the bill, plus the total cost for any items and services not covered by the plan.
Even though they can be called “hospital-only” the plans won’t necessarily cover all or even most of your child’s hospital bill. It’s important to understand exactly what the plan will cover and not rely on a catastrophic plan for your child’s primary coverage. These plans won’t provide the coverage needed to treat a disease like cancer and don’t meet the requirements of the health care law. If this is your child’s only form of coverage, you will likely face a penalty at tax time unless the child is exempt from the requirement to have health insurance. (You can find out about exemptions at www.healthcare.gov/exemptions/.)
Catastrophic coverage plans may be offered in the state health care marketplaces for people with low incomes or those who are exempt from having to get standard health coverage. The marketplace plans have some advantages over catastrophic plans not sold in the marketplace, in that they cover some preventive care. But a person who requests an exemption from buying a regular health plan can’t get help paying the premiums for catastrophic coverage. And when there’s a serious illness, the out-of-pocket costs with catastrophic plans can run very high. This is not a good option for a child with cancer.
Health Savings Accounts
If you have enrolled or plan to enroll in an insurance plan with a high deductible, you may be able to set up a Health Savings Account (HSA). You don’t have to pay federal income taxes on the contributions you make to the HSA as long as the money is used to pay for qualified medical expenses. If you use it for anything else, you’ll be required to pay the tax and a penalty.
Note that an HSA is different from a Flexible Spending Account (FSA); for instance, you can have an FSA even if you don’t have a high-deductible health plan. FSA funds are set up to be used for both medical and child care expenses. But the FSA money you don’t use goes away at the end of each year, while the HSA money is yours until you take it out. For more information about setting up an HSA you can contact your employer, bank, or credit union.
Pre-existing condition exclusions
A pre-existing condition is a health problem that a person had before joining the health plan. Before the new health care law went into effect, health plans could impose a pre-existing condition exclusion period on a person. This means that a child with a pre-existing condition would have to wait a certain amount of time before the plan would pay any health care costs related to that medical problem. The wait could be as long as a year, and some plans refused to cover certain pre-existing conditions such as cancer at all.
The current health law forbids most health plans from refusing to cover pre-existing conditions. They also cannot refuse to cover people with pre-existing conditions. But some health plans, including some grandfathered plans that existed when the law was signed in March 2010, can still have exclusion periods for pre-existing conditions.
Grandfathered employer plans: Federal law has long prevented employers from applying exclusion periods for a pre-existing condition in certain situations, and this law still applies to grandfathered employer plans. You may be able to avoid the exclusion period in a grandfathered plan if your child was covered by health insurance from a previous employer and has not been without health insurance coverage for more than 63 days. Some states require employer plans to cover pre-existing conditions even for people who were without insurance for more than 63 days. You can call the US Department of Labor at 1-866-444-3272 to find out more about your specific situation. (See the section called “The Health Insurance Portability and Accountability Act of 1996” for more information.) Note that employers can sign up new employees for grandfathered plans if the employer has had the plan since 2010, so you may need to ask if your plan is grandfathered.
Grandfathered individual policies: Grandfathered policies in the individual market can still have exclusion periods for people with pre-existing conditions. If you have a grandfathered individual plan, the pre-existing condition exclusion period could last for many years or even be unlimited. Such plans can also continue to impose an elimination rider that keep that disease, body part, or body system from ever being covered by that policy. Grandfathered individual policies can’t sign up new people, so this only applies if you had an older policy that you were able to keep.
Grandfathered plans will be going away: The health care law defines grandfathered plans as those that were being sold when the law began to go into effect in March 2010 and haven’t made significant changes to the coverage they offer or the prices they charge. Because health plans often change their coverage and/or price from year to year, many lose their grandfathered status over time. The total number of grandfathered plans is shrinking, and over time there will be few, if any, grandfathered plans left. If you’ve had your individual insurance plan or your employer has had the same plan since at least 2010, it’s important to find out if it’s a grandfathered plan.
Hospital indemnity policies and other supplemental insurance
Hospital indemnity policies, sometimes called supplemental medical policies, pay a fixed amount for each day a person is in the hospital. Not all indemnity policies cover children, and some that do pay a lower rate for days that children are in the hospital than they do for adults. There may also be a limit on the total number of hospital inpatient days a policy will pay in a calendar year or a cap on the total number of days it will ever pay. The money received from such policies can be used however the insured needs or wishes. It’s often used for medical costs not paid by the insurance company, or the other expenses that families face when one member is ill.
These supplemental plans don’t provide comprehensive coverage to treat a disease like cancer, and they don’t meet the health care law’s requirement to have insurance. So, if this is your child’s only form of coverage, you’ll likely face a penalty at tax time. You could also have to pay huge out-of-pocket costs if your child has a serious illness. This is not a good option as the only coverage for a child with cancer.
National law prohibits discrimination based on genetic testing or test results
The Genetic Information Nondiscrimination Act (GINA) does not allow health insurers to turn down people or charge higher premiums for health insurance based on genetic information or the use of genetic services, such as genetic counseling.
You can learn more about GINA in our document called Genetic Testing: What You Need to Know.
Last Medical Review: 11/13/2014
Last Revised: 01/08/2015