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Maine Works for Youth!
Maine's
Healthy & Ready to Work Initiative
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A Primer on Health
Insurance
This information should help you answer the following
questions:
Health insurance is designed to pay a portion of the costs
of medical care delivered by a doctor, hospital, pharmacy and
other providers of medical services.
Everyone needs to have health care services at some point
throughout their lives. To pay for this care most Americans
use health insurance. According to the Institute of
Medicine's Coverage Matters: Insurance and Health care,
September 2001, the reality is that 40 million people in the
United States are not covered, or cannot obtain health
insurance coverage.
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The cost of obtaining health care today is very high.
Health insurance pays for a large percent of medical expenses
ranging from doctor visits, emergency treatment, hospital
care, and other medical services. With health insurance, you
can be spared expensive medical bills that could wipe out any
savings as well as put you in debt. There is no way to
predict what your medical expenses may be from one year to
the next so having health insurance to pay for the unexpected
accident or serious illness is a necessity.
People who have health insurance are more likely to
receive yearly physicals, thereby catching health problems
before they become more serious. People also are more likely
to seek medical attention when a condition first arises
rather than waiting until they are seriously ill. (Institute
of Medicine [IOM],
2001) Receiving treatment early on may help reduce the
severity of the condition as well as reduce cost in treating
it. Receiving medical care at a physician's office is more
cost effective than at a hospital emergency room or a walk-in
clinic.
While it is important to have health insurance, there is
no law that entitles you to coverage or that says your
employer must provide it. Health insurance coverage is not a
right but it is often a benefit employers may offer to their
employees. Individuals may also purchase health insurance on
their own, and some people are eligible for public health
coverage (Insure.com).
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(The following information has been adapted from Checkup
on health insurance choices produced by the Agency for
Healthcare Research and Quality.)
Most people obtain group health insurance coverage through
their employer. Some employers may cover the full cost of
insurance while most contribute a percentage of the cost and
the employee has the remainder deducted from their paycheck
every pay period. Another option is for the employer to pay
for the employee's coverage and the employee pays for a
spouse and any children for whom they want coverage. An
advantage to employer based health insurance is that all
employees are eligible for coverage as long as they enroll
when they are hired or wait for the anniversary date of the
policy. Pre-existing
condition exclusions are less likely
to impact one's ability to secure coverage.
Many employers do not offer health insurance for a variety
of reasons. If the business is small, or you work part-time
you may not have the option of purchasing a plan through your
employer. In these instances you may be able to purchase
group insurance through membership in a labor union,
professional association, club, or other organization. Be
sure to read all the information carefully. Purchasing health
insurance through group coverage results in lower premiums.
Individual health insurance plans can be purchased,
however the cost is significantly higher that that of group
plans. Maine has "guaranteed-issue" laws for health
insurers who sell individual health plans. These laws mean
they must accept your application for coverage regardless of
your medical or health status. They can impose a pre-existing
condition exclusion period of not more that 12 months (10 for
pregnancy) only if you are not federally eligible for
coverage. Premiums for individual health insurance plans are
based on a community rating and can be different depending on
your age, occupation, smoking status and where you live
within the state. Family size and the type of plan you want
to purchase also effect the amount of premium you will pay.
For information on purchasing individual health
insurance in the State of Maine check out the Maine Bureau of
Insurance's web site at http://www.state.me.us/pfr/ins/indhlth.htm.
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Usually an employer offers only one type of group health
insurance coverage; some larger employers may give you a
choice between two plans. When you are purchasing an
insurance plan you must decide which type of plan best fits
your needs. A single person without health concerns may not
require the same type of coverage as a family with small
children or someone who has a chronic illness.
The following comparison between different health
insurance plans has been adapted from Health insurance basics.
Indemnity Plan or Fee-For-Service (FFS)
While this type of plan offers more flexibility, you will
pay higher premiums and
higher out-of-pocket
expenses.
Advantages of having this plan include:
-
Greater personal control- -you can go to the
doctor or hospital of your choice
-
You can see a specialist without getting a
referral from your primary
care physician or having to seek prior
approval from the insurance company.
Disadvantages of this plan include:
-
Having to pay a deductible
(ranging from $250 -to $1,500 per year) before
the insurance company starts paying portions of
your expenses.
-
The health plan reimburses the doctor for their
portion of the bill (typically about 80%) of the
bill and you have to pay the remaining amount
(20%).
-
Some doctors require you to pay the bill up-front
and then you must submit bills and claims to the
insurance company for reimbursement.
-
FFS plans will only pay for "reasonable
and customary" medical expenses. If your
doctor charges more than the average for your
area you will have to pay the remaining portion
of the bill.
Managed Care
health plans
A.
Health
Maintenance Organizations (HMO).
B.
Preferred Provider Organizations (PPO).
Under this type of plan a "network of providers"
-doctors, dentists, hospitals, pharmacies, etc--from which a
patient receives his/her health care is created. The patient
selects a primary care physician (PCP) and they must see them
for all their medical needs to ensure payment by the health
care plan. The health plan usually pays these providers a set
amount per patient per year for providing services.
Advantages of an HMO include:
Disadvantages of an HMO include:
-
You must choose a primary care physician (PCP)
from their network of providers or they will not
pay for services you receive.
-
You must get a referral from your PCP to see a
specialist. If you do not get a referral you may
end up paying the full amount of the visit.
Advantages of a PPO:
-
Lower monthly premiums.
-
The standard co-payment for a routine office
visit during regular office hours is $10.
-
You may go to any specialist without permission,
as long as that doctor participates in the
network.
Disadvantages of a PPO:
-
You must choose a PCP.
-
If you choose to see a physician outside the
network you will probably need to pay that
physician at the time you get services and then
submit the bill to the insurance company for
reimbursement.
-
You may also have to pay a deductible if you go
outside the network, or pay the difference
between what network doctors vs.
Out-of-Network
doctors charge.
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Health insurance coverage varies by plan but there are a
number of mandated health benefits and health insurance laws
for the State of Maine. You can check with the Maine Bureau
of Insurance for specific information.
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Public health insurance coverage such as Medicaid
(including State Children Health Insurance Program or SCHIP)
and Medicare are available to select groups of people who
meet certain income, age, or disability guidelines.
MaineCare (formerly known as Medicaid or Cub Care) is the
public health insurance program operated in the state of
Maine by the Department of Human Services. The following
information for MaineCare has been adapted from the Maine Equal
Justice Project website.
MaineCare is available to a number of different groups of
people who meet certain income guidelines based on the Federal
Poverty Level (FPL) and specific asset guidelines.
These groups include:
-
Children (age 0-18) with income up to 200% of FPL and
no asset limit.
-
Young adults age 19 - 20 with income up to 150% of
FPL and asset limit of $2000
-
Parents with children under 19 living at home with
income up to 150% of FPL and asset limit of $2000
-
Pregnant Women with income at 200% of FPL and no
asset limit
-
Adults age 21 through 64 who:
-
Have no children or their minor children are
not living in the home and
Are single with monthly income below $739
(2002 FPL) OR are married and living with a
spouse and combined monthly income is less
that $995 (2002 FPL); and
-
Have assets below $2,000 for an individual or
$3,000 for a couple and have savings,
including savings in a retirement plan, worth
less than $8,000 for an individual or $12,000
for a couple. (Many assets, like the home and
a car, do not count).
-
Disabled adults and persons 65 and over with income
up to 100% of FPL and asset limits of $2,000 for
single and $3,000 for married. Working disabled can
also have up to $8,000 ($12,000 if married) in
savings or retirement plan. (Many assets like a home
and car do not count).
Contact the
Department of Human Services office nearest you for
additional information or to get an application for
MaineCare.
Medicare is the nation's largest health insurance program
providing health insurance to:
Medicare has two parts: Hospital Insurance (Part A) and
Medical Insurance (Part B).
Medicare Part A helps pay for inpatient hospital services,
skilled nursing facility services, home health services, and
hospice care.
Medicare Part B helps pay for doctor services, outpatient
hospital services, medical equipment and supplies, and other
health services and supplies.
For more information on eligibility requirements, benefits
and how to enroll in Medicare you can visit their website at http://www.medicare.gov/Basics/Overview.asp
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References
Checkup on
Health Insurance Choices. AHCPR Publication No. 93-0018,
December 1992. Agency for Health Care Policy and Research,
Rockville, MD. Retrieved July 11, 2002 <http://www.ahrq.gov/consumer/insuranc.htm>
Coverage
Matters: Insurance and Health Care. Committee on the
Consequences of Uninsurance, Board on Health Care Services,
Institute of Medicine, National Academy Press, Washington D.C.
September 2001.
Health Insurance
Resource Center (2001). A consumer's glossary of
insurance terms. Retrieved February 28, 2003 <http://www.healthinsurance.org/insterms.html>
Maine Equal Justice
Project (2002). Maine's Medical Assistance programs:
Who's Covered and Who's Not? Retrieved February 28, 2003
<http://www.mejp.org/medicalprograms.htm>.
Insure.com (2003). Health
insurance basics. Retrieved February 28, 2003 <http://www.insure.com/health/basics/html>.
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Updated: 10/10/2007
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