Other things to know about health insurance

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 health care reform 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 there are 3 basic approaches:

One is by offering a stripped-down insurance policy that doesn’t cover major illness. These policies are cheap because they make you pay for most of your own care. By the time you find out you have 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.

The third offers completely fake health insurance. The seller takes your money and gives you a 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.

How to spot scammers

Watch out for aggressive sales people, very low premiums, easy sign up, and a push for you to sign up right away. They don’t require a medical exam or detailed medical history. They 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 and 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.

• Don’t give them money, but especially don’t give them your credit card or bank account numbers unless you know exactly who they are and what you’re getting.
• Read the policy line by line or have someone read it for you.
• Check out any association you have to join — go online, be sure they have a street address, and find out if they have legitimate activity besides selling insurance.
• Call your state insurance department to be sure the plan is licensed in your state, and ask if the plan has had complaints made against it.
• Finally, check with your doctor and pharmacist to be sure they accept the plan. (See the “To learn more” section to find your state insurance department.)

Catastrophic illness or major medical clauses

Treating and managing most cancers costs a lot of money. Some insurance plans provide for extra coverage under a “catastrophic illness” clause. These are policies that cover major medical care needs. The policies usually have very high deductibles and fairly low premiums. They can be good for people with chronic illnesses. Check to see if your plan includes such coverage.

A few people buy only catastrophic illness insurance, sometimes called a hospital-only or short-term plan. The plan often won’t cover doctor visits, medicines, or routine care, but kicks in when you are hospitalized and have very high expenses. Depending on the policy, expect to pay a few thousand dollars for the deductible alone and some percentage of co-insurance on the rest of the bill.

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 if the money is used to pay for qualified medical expenses. If you use it for anything else, you will 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 you had before you joined your medical plan. If you have or have ever had cancer and join a new health insurance plan, you may face a pre-existing condition exclusion period. A pre-existing condition exclusion period means your plan will make you wait before they pay any costs for the pre-existing medical problem. The wait may be as long as a year for insurance you get through an employer.

If you refuse health insurance when it’s first offered and then sign up later, the pre-existing condition exclusion can be up to 18 months after you sign up. And the time can be longer for independent policies and those you don’t get through an employer. In fact, some insurance may not cover certain illnesses at all.

Employer-sponsored plans and pre-existing exclusions: If you get health insurance through your job, Federal law prevents the employer from applying exclusion periods for a pre-existing condition in some situations. For instance, you may be able to avoid the exclusion period if you have had health insurance with a previous employer and have not been without health insurance coverage for more than 63 days. Some states require an employer-based insurance company to cover your pre-existing condition even if you were without insurance for a bit 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.)

Individual policies and pre-existing condition exclusions: If you are joining a plan other than a group coverage plan (including some high-risk pools), the pre-existing condition exclusion period can be many years or even unlimited. If you are getting a plan through someone other than an employer, the insurance provider can impose an elimination rider that would keep that disease, body part, or body system from ever being covered by that policy. It’s important to know these things before you sign up.

Pre-existing condition exclusions on adults to go away in 2014: It’s also important to know that the Affordable Care Act (ACA) passed in 2010 affects pre-existing condition exclusion periods, among many other aspects of health insurance. The ACA does not allow insurance companies to deny coverage for pre-existing conditions (such as diabetes or cancer) in children as of September 2010 and in adults starting in 2014. See the section called “The Affordable Care Act” for more on this.

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 individuals or charge higher premiums for health insurance based on genetic information or the use of genetic services, such as genetic counseling. GINA defines genetic information as any of these:

• A person’s own genetic tests
• The genetic tests of family members
• One or more family members with a genetic disease or disorder

GINA bars group health plans, individual plans, and Medicare supplemental plans from using genetic information to limit enrollment or change premiums. It also forbids these insurers to request or require genetic tests. GINA applies to all health insurance plans (including federally regulated plans, state-regulated plans, and private individual plans).

The law also forbids discrimination by employers based on genetic test results or genetic information. GINA states that employers must not discriminate on the basis of genetic information (no matter how they got the information) in hiring, firing, layoffs, pay, or other personnel actions such as promotions, classifications, or assignments.

Look carefully at health insurance options at work

Look closely and compare plans if you are trying to decide among several insurance or managed care options. Sometimes there’s a chance to look at different types of coverage during open enrollment periods. (During open enrollment you are able to make changes in your coverage. It usually happens once a year). Sometimes it’s possible to add yourself, your spouse, or a child to a work health insurance policy outside the open enrollment period if you’ve had a major change in situation; for instance, if you’ve gotten married or your spouse has been laid off. Check with your health insurance administrator at work about this. This person is usually in the human resources or employee benefits department. If you get insurance through your job (or your spouse/partner’s job), you may want to keep the administrator’s phone number and email address handy.

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. There may be a limit on the total number of days it will pay for in a calendar year, or a cap on the total number of days it will ever pay. The money received from this type of policy can be used however the insured 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.

Critical-illness policies: There are other types of supplemental policies that offer extra money in case a person gets one certain kind of health problem such as cancer, stroke, or an accident. You can’t buy these critical-illness policies after you are diagnosed, and there are often conditions and waiting periods. The limitations on these types of policies mean that for many people with health insurance, they are not worth the expense.

Long-term-care insurance: This is not health insurance, but includes long-term medical and non-medical care given to people who need help performing basics like eating, dressing, walking, toileting, or bathing. Long-term services might be given at home, in community, in assisted living, or in nursing homes. Unpaid family members often provide this kind of care in the home.

Terms of long-term-care insurance policies vary. For instance, most policies don’t start paying until more than 90 days of such care are needed, but some wait up to a year to start covering it. Home care may be covered separately or not covered at all in some policies. Long-term-care insurance can be very expensive. Medicare and most health insurance plans don’t pay for long-term care.

Case managers and financial assistance counselors

Hospitals, clinics, and doctors’ offices often have someone who can help you fill out claims for insurance coverage or reimbursement. A case manager or a financial assistance counselor may be able to help guide you through what can be a complicated process.