Health insurance is an important coverage that helps protect you and your family from the devastating financial effects of unexpected health problems or catastrophic illness and as of January 1, 2014, most Americans are now required by Federal Law to have health insurance or pay a penalty.
The Oklahoma Insurance Department encourages you to work with the insurance professionals in your community to help you determine the appropriate policy for your family or business needs. These insurance professionals can be found on our website under:
You may receive health coverage through an individual insurance policy, through a policy issued to you as a member of an association group, through an employer sponsored health plan or through a government plan (Medicare, SoonerCare (Medicaid), VA, etc.). If your employer sponsored health plan is “self insured” it is not subject to regulation by the Oklahoma Insurance Department but regulated by the Department of Labor. Additional information regarding employer sponsored plans is available below. The three main types of health insurance are:
- Policies that offer traditional health insurance;
- Policies that provide managed care services; and
- Policies that provide limited benefits.
Traditional Health Insurance
With the passage for the Affordable Care Act or Healthcare Reform in 2010, most traditional health insurance plans, often called “fee-for-service,” are most likely now to be found in “Grandfathered Plans”, non-compliant ACA plans or commonly known as “Grandmother Plans” or Medicare Supplement Plans. If your plan is a true “free for service”:
- You can use any doctor or hospital.
- You send your medical bills to the insurance company (the provider may do this for you but is not required).
- You will likely have to pay a deductible to your provider before the policy begins to pay and co-payments to your provider each time you visit your provider or doctor’s office.
- If the policy pays less than the full bill, you most likely will be responsible for paying the balance.
ACA compliant group health and individual policies fall under the category of comprehensive medical policies. These ACA compliant policies are expensive because they are required by Federal law to provide more benefits than many older or pre-ACA policies. An ACA compliant policy pays a percentage of covered expenses (for example, 60%, 70%, 80% or 90%), after you pay the applicable plan deductible and copays. The remaining expense (for example,10%, 20%, 30% or 40%) is coinsurance and is paid by you. Maximum out-of-pocket limits restrict the amount of coinsurance you pay. After the covered person or family reaches their maximum out-of-pocket limit, your plan will pay 100% for that person or family for the rest of that year. Pay particular attention to the plan’s maximum out of pocket limit before you buy a plan particularly if you are not eligible for cost sharing reductions on the federal exchange.
Policies that provide Managed Care Services
ACA compliant policies will often be tied to a provider care network. This affects your choice of doctors and hospitals because not all providers are part of the network. In return for this limited choice, you usually pay less for medical care (i.e., doctor visits, prescriptions, surgery and other covered benefits) than you would with traditional “fee-for-service” health insurance. The managed care network controls health care services in these narrower network options Be sure to review all providers available to you under each type of Managed Care Service network you choose.
If your health care provider is out-of-network, you are responsible for the difference between the allowed amount and the provider’s charge and those amounts will not be applied toward your out-of-pocket limits. It is imperative that you contact your insurer should you have any question regarding a health provider being an in-network or out-of-network provider. Out- of- network providers can be far more costly as they are not subject to your insurer’s provider contract/s or discounted fee for services, however ACA compliant polices must cover emergency services received by an out-of-network provider as if they were in-network.
The types of Managed Care Networks are:
- Preferred Provider Organizations (PPOs) – PPOs offer a provider network to meet the health care needs of an insurance carrier’s insureds. The insurer contracts with a group of health care providers, or with a PPO network, to control the cost of providing benefits to their insureds. These providers charge lower-than-usual fees because they require prompt payment and serve a greater number of patients. Insured’s usually choose who will provide their health care, but pay less in coinsurance with a preferred provider than with a non-preferred provider.
- Health Maintenance Organization (HMO) – HMO members pay a monthly fixed dollar amount (similar to an insurance premium), which gives them access to a wide range of health care services. In many cases, members also pay a predetermined amount, or copayment, for each doctor or emergency room visit and for prescription drugs, rather than paying the provider in full and obtaining a portion of the reimbursement later. Members must use the HMO’s network of providers, which may include the doctors, pharmacies and hospitals under contract with that particular HMO.
- Point of Service plans (POS) – In a POS plan, insured members may choose, at the point of service, whether to receive care from a physician within the plan’s network or to go out of the network for services. The POS plan provides less coverage for health care expenses provided outside the network than for expenses incurred within the network. Also, the POS plan will usually require you to pay deductibles and coinsurance costs for medical care received out of network.
Limited Benefit Coverage Plans
Limited benefit health plans are insurance products with reduced benefits intended to supplement comprehensive health insurance plans, not to be an alternative to them. You may have seen these types of plans marketed as Short Term Limited Duration Insurance, Accident Policy, Cancer Only, Specific Disease or Heart Policies, Hospital Cash or Indemnity plans. They may also be Discounted Plans such as Pharmacy, Dental or Medical Clinic Memberships. These plans are not considered ACA compliant which could result in you paying additional out-of-pocket expenses for uncovered medical services.
Limited benefit health insurance plans are not typically required to provide the same level of coverage, so they cover fewer types of medical services and expenses than a comprehensive policy. They are not required to cover your pre-existing conditions. These plans typically pay you a flat amount for a specific service, covered item or covered disease or giving you a discount for services, leaving you the rest of the bill to pay yourself. A limited benefit plan may limit the amount of coverage the company will pay per episode of illness or per day, sometimes as low as $50 to $5,000 (not counting co-insurance and deductibles paid out-of-pocket by you). These policies also provide limited surgical, preventative care, testing and emergency benefits upon receipt of the billing. And with low maximum benefit limits called “caps,” it may be possible for you to reach your cap quickly, leaving you responsible for the balance of the bill. Discounted plans still leave you paying for the services yourself.
Buyer beware when purchasing Limited Benefit Plans – understand what you are purchasing!
- Short Term Limited Duration Insurance: In Oklahoma, currently these plans without state mandated benefits may cover you for no more than six (6) months and are non-renewable. Some plans sold in Oklahoma may offer coverage beyond six (6) months which must contain all state mandated benefits. They may exclude pre-existing conditions and even ask health questions on the application; and may have annual and yearly benefit limits. You will want to see the policy exclusions and limitations before buying.
- All applications and policies must contain prominent wording warning consumers these plans are not major medical or comprehensive major medical and do not have the protections that ACA policies would normally provide.
- Accident Only: Pays only when you are treated for accidental injury or if an accident causes death.
- Disability Income: Pays a fixed amount for a specified period of time when you are unable to work because of an accident or illness.
- Hospital Indemnity: Pays a flat amount (such as $100 per day) when you are hospitalized.
- Long-Term Care: Pays to take care of you for an extended time in a nursing home or your own home. For more information, visit www.longtermcare.gov. For information about the Oklahoma Long Term Care Partnership, visit: www.okltcpartnership.org
- Medicare Supplement: Pays some medical expenses not paid by Medicare. (See the Choosing a Medigap Policy)
- Special Need: Pays for health care not covered by typical major medical policies (for example, dental or vision care).
- Specific Disease: Pays only for treatment for a disease or condition specifically named in the policy such as cancer.
- Home Health Care: Pays for health care delivered to you in your home.
Other types of plans:
- Discount Plans – These plans are not considered ACA compliant which could result in you paying a fee or tax if you do not have a comprehensive health insurance plan as your primary plan. – Medical Discount Plans, Prescription Discount Plans, Dental Discount Plans, and Vision Discount Plans are programs where a consumer pays a fee to join a plan in return for discounts on products and services from participating vendors and providers. Often, members who join these plans are issued a card similar to an insurance card identifying them as a member. However, these plans are NOT insurance. Buyer beware!
How do I Purchase Health Coverage?
Individual vs. Group Coverage
There are two basic ways to buy health coverage: as an individual or through a group. How you buy health coverage affects your rights and responsibilities.
Individual Coverage – Comprehensive Major Medical
- You may buy individual health insurance either outside of the Oklahoma federal exchange through an agent, broker or directly from the insurance carrier or from the Oklahoma federal exchange at www.healthcare.gov. When you buy individual health insurance, you contract directly with a health carrier just like insuring your home or car.
- You are the policyholder. However, HMOs call the contract-holder (the person in whose name the contract is written) a subscriber, member or enrollee.
- Your individual policy can cover your entire family (or only certain individuals in your family, like child/ren only, or the one adult who needs coverage) and each covered family member would be an insured.
- Any premium increase affects everyone who has the same kind of policy. Insurance carriers can only rate applicants for insurance on age, tobacco use, zip code and family composition.
- Unless you have made false statements on your application, filed fraudulent claims or failed to pay your premiums on time, the company cannot cancel your policy because of your health, pre-existing conditions or claims.
- Coverage must include specific minimum benefits as stated by the Affordable Care Act and Oklahoma state law
- Rates for fully-insured individual policies are regulated by the Oklahoma Insurance Department. However, individual policies sold in the federal exchange or SHOP are also regulated by CMS.
- The policy must include specific minimum essential benefits required by federal and Oklahoma state law.
Group Coverage can be purchased outside of the exchange through an agent or broker or directly from the carrier. Small employer groups (until the end of 2015, those with 50 or fewer employees) can purchase through an exchange called the SHOP.
A group insurance policy may cover two to thousands of people, but it is still only one policy.
- Your employer or association is the master policyholder; you and your fellow group members are certificate holders.
- Each family member covered under your certificate is an insured.
- The master policyholder (Employer or Association) negotiates the terms of a group policy with the insurance company.
The master policyholder can:
- Reduce or change the benefits and coverage (some exceptions apply to Grandfathered Plans), including determining to cover employees and children only and to cover or exclude spouses.
- Increase your share of the premium (some exceptions apply to Grandfathered Plans),
- Switch to another insurance company, or
- Stop providing any coverage!
In a group contract
- Rates for fully-insured employer groups are negotiable with the insurance carrier and are regulated by the Oklahoma Insurance Department. However, fully-insured group plans in the federal exchange or SHOP are regulated by CMS. Self-insured large group plans are regulated by the Department of Labor.
- The contract must include specific minimum benefits required by federal and Oklahoma state law —other benefits are negotiated by the master policyholder.
- The master policyholder does not need consent of certificate holders to change companies or policies, cancel the policy or agree to new premiums or benefits.
Large and small employer group contracts
- May have more generous benefits. However, self-insured plans and association plans may have benefit limits and may not cover some services. You will want to review your benefits carefully.
- Cannot reject an application because of health as long as the application is made during the employer’s eligibility period or Open Enrollment. Currently in Oklahoma, large employer groups are defined as having 51 or more employees. Small employer groups are defined as having 2 through 50 employees.
Other ways you can be covered for Health Care is through a government sponsored program like Medicare, SoonerCare (Medicaid) or VA, etc.
Other Policy Information
- Deductibles: This is the amount of covered health care expenses that must be paid for by the insured before the insurance company will begin paying. Choose deductibles that you can afford to pay should you need to use your insurance.
- Co-Insurance: This is the amount stated in the policy that is the insured’s portion of the claim. For instance, the insurance company may pay 60%, 70%, 80% or 90% of the claim and the insured’s share or co-insurance is 40%, 30%, 20% or 10% of the claim. You will pay the co-insurance amount in addition to the deductible. Once your deductible and coinsurance equal your maximum out-of-pocket, then your plan will pay 100%. The individual and family will have a maximum out of pocket amount for the plan they choose.
- Co-Payments: Some policies provide for a set amount paid by the insured for a particular service, usually an office visit, out-patient visit or hospital admission. In that case, the insured pays their co-pay for the visit and the insurer pays the rest of the bill. Amounts you pay for co-payments may or may not go toward the deductible, depending on the policy.
ACA compliant policies have maximum out-of-pocket limits and unlimited lifetime benefits which limits your liability or exposure (how much of the expenses you have to pay yourself). However, out-of-network charges, except in emergency situations, are your responsibility and you may be balanced billed so you must read your policies very carefully and know that your provider is in network before using their services.
When you use an In-Network provider, your provider will file the claim directly with your insurance carrier. You will receive an Explanation of Benefits of how that bill was paid and what your responsibility is, if any. If there is a dispute, contact your insurance carrier customer service department for a resolution, first. Ask for a resolution time frame. If not completed by that time and the explanation seems unreasonable, contact Consumer Assistance at the Oklahoma Insurance Department for help or assistance in appealing.
If your treatment bill has been denied by your insurance carrier, follow these steps to begin the appeal process:
For policies bought on the Exchange:
For policies bought off the Exchange:
Please refer to the How To Appeal sheet enclosed with your Explanation of Benefits received from your insurance carrier on your denied services. For further help, contact your insurance carrier Customer Service Helpline or the Oklahoma Insurance Department Consumer Assistance Department.
Can an Insurance Company Exclude Pre-Existing Conditions?
With the passage of the Affordable Care Act in 2010, eligible children could not be denied insurance coverage due to poor health or prior treatments and beginning January 1, 2014, all eligible persons applying for insurance could not be denied coverage due to poor health or prior treatments.
Click here to see how pre-existing conditions are now protected. This provision applies to ACA comprehensive medical policies sold on and off the exchange.
If you bought a policy on the federal health exchange and you are receiving premium tax credits, you have certain protections when you are late paying your premium. Please contact www.healthcare.gov at 1-800-318-2596.
If you bought a policy outside of the federal health exchange you should contact the insurance carrier’s customer service department who will give you instructions and your options.
- The insurance policy must include a grace period during which the policy must continue to be in force. The length of time for the grace period depends on the frequency of premium payments. If the premium is paid on an annual basis, the grace period cannot be less than 31 days. If the premium is due on a weekly basis, the grace period cannot be less than 7 days and not less than 10 days for premiums due on a monthly basis.
If you have a policy through the federal health exchange, please click here.
If you have a policy outside of the federal exchange, contact your insurance agent or broker who sold you the policy or your insurance carrier’s customer service department who will give you instructions and your options.
You have certain rights and protections both inside and outside of the exchange. However, when an insurance carrier leaves the marketplace, you must follow the instructions you receive from your insurance carrier and take notice of your deadlines to take action.
You have the option of covering your entire family or not at the time of application or during Open Enrollment.. Read the policy and the schedule page to determine who is insured under the policy.
You will want to refer to your Summary of Benefits and or Policy for your out of pocket limits. Policies can no longer have annual or lifetime limits for essential health benefits. For policies bought through the federal health exchange, please click on the following link: