Insurance has seen drastic changes over the last several years, a trend that is likely to continue. The landscape has changed immensely, moving from largely private insurance companies to broad reaching governmental reforms that have limited and changed private health insurance options. Today, there are government sponsored options like the Affordable Care Act, federally funded programs such as Medicaid, Medicare and TRICARE, insurance for individual purchase, employer funded insurance, and several more. All of them are different, and come with their own unique advantages and disadvantages. Read on to explore a brief overview of all the above-mentioned health insurance coverage options, as well as a few more that are available today.
Government Sponsored Insurance
The Affordable Care Act (ACA)
In 2010, congress passed a bill called the Affordable Care Act, or the ACA. Often referred to as “Obamacare”, the ACA is a broad reaching move towards healthcare reform in the United States. The reach of the ACA is not limited to healthcare, but has implemented laws into various sectors of our society, including food, drugs, and cosmetics industries.
- The ACA is a very long, very complex legislation. In short, the goal of the ACA is to provide all Americans with affordable, quality health insurance. A few of the other reforms of the ACA are:
- No one will be denied health insurance because of existing or previous health conditions that make you a high-risk individual to insure. The law also made it so private health insurance companies are not able to charge a high-risk individual more than they would someone who is not considered a high risk.
- Children aged 19-26 are able to stay on their parent’s health care plan.
- Preventative treatments are covered.
The law has resulted in the creation of independent, state and federal “Marketplaces”, where one can visit to shop for insurance coverage. While individual plans within the Marketplace will vary, all are required by law to have the following benefits:
- Outpatient Care
- Emergency Care
- Pregnancy, maternity and newborn care
- Mental Health and Substance Abuse treatment options
- Prescription Drug coverage
- Rehabilitative Care
- Laboratory Services
- Preventative treatment services
- Pediatric care, which must include vision and dental coverage
The only requirements for getting a plan on the Marketplace are that you are a legal immigrant or U.S. Citizen, you cannot be in prison, and you cannot have the option of health insurance coverage by your employer.
Upon entering the Marketplace and imputing necessary information, the Marketplace will provide you with a comparison of plans that are available to you. While there are certain times of the year when enrollment is considered “open”, there are also special circumstances that make application and approval possible, such as losing employment and therefore employer funded healthcare. Enrollment is also open at any time if you qualify for Medicaid.
Federally Funded Insurance
There are a few different insurance options that are offered that are funded in part by the federal government. These insurance options cover those who are financially unable to purchase insurance, those who are disabled or elderly, uninsured children and those who serve our country in the military.
-Medicaid- Medicaid is the first of these federally funded insurance options, although it is more accurately described as a state/federal funded coverage. The state raises money for the program via state taxes and if the state’s Medicaid system meets federal requirements, the federal government matches or exceeds the state’s portion of the funds. At an average of 16.8% of a state’s budget, Medicaid is one of the largest components of a state’s tax dollar payouts.
Medicaid was designed to help American’s who have limited financial resources have access to quality health care. Each state is responsible for determining eligibility, and states have the option to not participate at all. However, since the beginning of Medicaid in 1982, every state has participated.
Poverty alone does not guarantee access to Medicaid coverage. One must be a legal resident or U.S. citizen and fall into other categories such as pregnant, disabled, blind, or in need of nursing home care. The best way to determine if you are eligible for Medicaid is to talk to a representative from your state.
-Medicare- Medicare is insurance that funded by the Federal Government with a combination of taxpayer dollars, premium costs and surtaxes that are paid by beneficiaries. This is the only insurance in America that is a true single-payer setup.
To be eligible for Medicare you must:
- Be 65 and older
- If less than 65, have a qualifying disability such as Lou Gehrig’s Disease or End-Stage Renal Disease
- Be a US Citizen or legal immigrant of at least 5 continuous years
Enacted in 1965 by President Lyndon B. Johnson, Medicare was created to ensure that America’s elderly or disabled continue to have access to health insurance coverage after they are no longer covered by an employer. Medicare coverage is complex, at best, and composed of many different parts. Keep reading for a snapshot of what each of these parts are composed of.
Part A- This part of Medicare is also called Hospital Insurance. This will provide you coverage in the event of a hospital stay, a skilled nursing facility stay, or if you need hospice care. The Affordable Care Act requires that all citizens have at least a minimum amount of insurance coverage, and Part A meets this requirement. To avoid penalties, one should sign up for this coverage in the window of 3 months before their 65th birthday and the 3 months following.
Part B- This part is medical insurance, and will cover any visits to a doctor or other health related needs such as laboratory services, diagnostic and preventative care. It will also assist with any medical supplies considered medically necessary.
Part C- Part C is more commonly referred to as Medicare Advantage. Medicare Advantage plans are held by traditional, non-government insurance companies. They are typically used by those who want a lower premium cost, or want coverage for services not provided by a traditional Medicare plan. These services often include vision, dental, prescription drug and sometimes nursing home or assisted living costs. Occasionally these plans will even cover chiropractic costs. While Medicare Advantage plans are held to the same standards as are Parts A and B, the disadvantage to these plans is that you are often limited as to the doctors and facilities considered in-network, and may need to seek pre-approval or referrals before seeing a specialist.
Part D- Part D provides prescription drug coverage, and was designed to lessen the financial burden that can often accompany prescription drugs, whether generic or name brand. Part D is open to anyone who has Medicare Parts A and B, and also anyone who has a Medicare Advantage plan that does not include prescription drug coverage. Between premiums and copays, the cost of Part D itself can be quite high. So before enrolling it is a good idea to figure out what your annual prescription costs are as opposed to the cost of being on a Part D plan.
-TRICARE- TRICARE is insurance that is available to military personnel, those who have retired from the military and their respective dependents. This insurance is funded by the Military Health System, a component of the Department of Defense with a $50 Billion budget. The Department of Defense handles this insurance itself, with the mission of ensuring that military personnel are kept healthy and strong, ready to carry out their role in the military. It also seeks to ease military member’s minds with the knowledge that their family’s health is adequately cared for. They also strive to ensure that their medical professionals are equipped with all the necessary means of keeping service members safe and cared for should they be injured in the line of duty.
TRICARE also assists its beneficiaries with any prescription drug costs and provides a cap on any out of pocket charges a family would have to pay in order to ensure that no military family falls victim to medically related financial hardships. This cap does not include copays or any cost sharing expenses.
-CHIP (Children’s Health Insurance Program) – This is insurance that is offered through the US Department of Health for children in families that make too much money to qualify for Medicaid, yet still struggle to pay for health insurance. CHIP is funded through cigarette taxes and matching state and federal funds. At its implementation in 1997 during the Clinton administration, it was the largest expansion of Federally funded insurance. While each state has a lot of flexibility concerning who is eligible for the insurance, they also must be in compliance with federal regulations. The goal of SCHIP is to have no child left uninsured, and is available to families with incomes at 200% less than the poverty line.
Often as a part of an employee benefits package is the inclusion of employer provided health insurance. In the typical set up, the employer pays a large portion of any health care premium costs, and the employee covers the rest. Most, if not all employers offer some form of health insurance to full time employees. While to employees it often feels like they are not making as much money as they could be because of health insurance deductions, it is important to remember that plans offered by employers typically are better plans than those that are federally funded.
The costs of these plans are also deducted pre-taxable income, making your tax burden lighter since you are paying taxes on less of your actual income.
Costs for these plans have risen drastically since the implementation of the ACA, some by as much as 78%. Employees are often the ones who end up paying more for these rising costs, however that hasn’t changed the numbers of those who are enrolled drastically. This may be due to the fact that those who are uninsured face financial penalties under the ACA. Companies who have over 50 employees are also financially motivated to continue to provide coverage for their employees, as those who fail to do so can face fines of up to $2000 per uninsured employee.
Despite the rising costs of this insurance, employees who struggle with handling the costs cannot look to the Healthcare exchange to look for alternative plans, as if your employer offers health insurance you are ineligible for a plan through the Marketplace.
Individually Purchased Insurance
When insurance is purchased by an individual, without the help of a federally funded program or employer assistance, they are responsible for the entire cost of the plan. With higher out of pocket costs, copays and deductibles, it is no wonder that the Census Bureau reports that only 9% of American’s purchase insurance this way, and it usually is only plans that cover major medical. Major medical will cover catastrophic health events, and sometimes certain approved preventative health measures.
This form of insurance is usually purchased by those that are self-employed and do not have access to other means of insurance. When self-employed, some portion of the cost can be used for a tax deduction, which can make the price a little easier to bear.
The selection of plans for individual purchase is similar to the selection that employers have, however costs are determined by age and health status. Due to the ACA, it is against the law for plans to charge individuals more for their insurance than others due to the presence of health conditions.
Cost Sharing Health Coverage
There are several Christian Healthcare companies that utilize cost sharing to help members better afford their medical expenses. These companies are a legal alternative to purchasing health care coverage through the Affordable Care Act Marketplace, however it is important to know that this is NOT insurance, merely cost sharing.
These plans work by having members pay a monthly amount, usually from the member’s choice of coverage levels.
Members are asked to negotiate self-pay prices with their health care providers when they are seen, and then billed directly for any services rendered. Members then submit their bills to their cost sharing company. The company adds all submitted bills from the month together, and subtracts the member’s contributions. The leftover amount is divided by the members of the plan, and equal payments are made by each member.
The requirements for joining a Christian cost sharing company will vary from company to company, but most require you to:
- Not use tobacco products
- Drink responsibly
- Refrain from illegal drug use
There are rarely restrictions to joining, like age, weight, or health conditions. There are also usually options for opting into catastrophic medical coverage, which will put a cap on what you can expect to have to pay out of pocket. Rarely do these plans have waiting periods, and coverage generally begins from the moment the first contribution is made.
These plans are a good option for those who do not need a doctor often and struggle to afford more traditional forms of insurance, but also want to stay in compliance with Federal laws regarding health care coverage.
While the implementation of the Affordable Care Act has changed the landscape of Health Insurance, there are still several different ways to receive coverage, all with their own pros and cons. This list is also not exhaustive, as there are a great many sub plans available for specific situations. Health insurance is an area in which American’s can expect to see a number of changes in the years ahead, as we work to figure out what is the best way to ensure that all citizens receive quality health care.