Millions of people who have been without health insurance are finally able to get Medicare from the provision of Affordable Care Act—under the law, everyone must have some kind of health coverage, or pay a small fine—the system remains just as complex and unforgiving as it was before. That puts one at risk of being left without adequate coverage when needed. To avoid unnecessary fees, penalties, and just plain bad deals, here is a list of health-insurance don’ts.
Misunderstanding the difference between “preventative” and “diagnostic” care
Although the ACA promotes providing Americans with affordable preventive care in a number of ways, that doesn’t mean one should expect every “preventative” service—such as cancer screenings, vaccinations, and the like—to be offered to him/her at no or little cost.
Even when no co-payments or other charges are associated with this type of service, though, there are times when it leads to additional care that’s considered diagnostic rather than preventative. That’s the kind of care one be charged for, the individual should be sure to ask his/her physician or specialist upfront about the costs that are likely to be tied to any future or follow-up visits.
Picking a plan based solely on low premiums
There is no free lunch in health insurance, but there is a menu of payment options to choose from. One can pay for his/her care up front, in the form of a higher premium, or later, in the form of a higher co-payment, a bigger deductible, or both. Neither form of payment is inherently better; it depends on your personal situation and preferences.
For instance, if one is in generally good health and have an adequate financial cushion, he/she might save money with a lower insurance premium and higher cost-sharing. But if he/she has an ongoing medical needs, he/she might do better with a higher premium and lower cost-sharing. Of course, he/she takes a risk if he/she picks a plan with a very high deductible and co-pay and then can’t afford his/her share of expenses if he/she happens to get sick.
Assuming because one is healthy he/she don’t need health insurance
If one gets sick and then decide to buy health insurance from plans made available as part of the Affordable Care Act, he/she might not be able to, at least not right away. He/she will only be allowed to purchase individual health insurance during the initial open enrollment period. The best place to buy is one’s state’s Health Insurance Marketplace, a new kind of virtual insurance agency where one can compare plans and possibly qualify for income-based subsidies.
In certain circumstances, one can be allowed to purchase individual insurance outside the open enrollment period. Losing insurance because of a change in employment, or moving away from your one’s plan’s service area, are examples of such “qualifying events.” But suddenly needing expensive health care because one is sick is not.
Neglecting to ask or figure out if a particular physician or specialist is “in network” or not.
Thanks to all of the different provider types that exist today–Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are two such entities, but there are others, too—figuring out which doctors or specialists are part of one’s health plan’s “network” isn’t always easy.
That’s the sort of information one would want to have down pat before he/she ever set foot into a hospital or physician’s office, though, due to the differing impacts in-network and out-of-network care can have on one’s wallet.
So, if an individual’s goal is to steer clear of medical bills that shock, surprise, or worse, his/her best bet is to contact both his/her insurance company and the healthcare provider(s) in question to ensure the latter will be covered well in advance of his/her appointment.
Picking the wrong Medicare drug plan
Only 5 percent of Medicare beneficiaries who choose a stand-alone Part D drug plan is covered by the plan cheapest for them, according to a study in the October 2012 issue of Health Affairs. The average beneficiary paid $368 more in premiums and drug costs than he would have if he had chosen the cheapest plan for his specific assortment of prescriptions. And more than a fifth overspent by at least $500 a year.
The biggest mistake people make is picking a plan that pays for generic drugs in the coverage gap known as the doughnut hole, according to study authors Chao Zhou and Yuting Zhang from the University of Pittsburgh. People wound up paying hundreds of dollars more for that feature than they got back in benefits.
It also pays to review one’s Medicare Advantage options every year. He/she may be able to find a plan with a higher quality rating at a lower cost. That’s especially important nowadays because Medicare gives plans with higher-quality ratings (that is, with four or five stars) more money to spend on their members—in the form of lower premiums or more services—than it gives lower-rated plans.
A flexible spending account lets one set aside money tax-free from his/her paycheck to pay for medical expenses not covered by insurance, such as deductibles and co-payments, as well as dental care, eyeglasses, and contact lenses, and some alternative treatments.
Contributing to an FSA will also reduce one’s taxes. The higher the tax bracket, the greater the benefit.
Those advantages remain despite two changes in FSAs due to the health-reform law. One can no longer use money in his/her FSA to pay for over-the-counter drugs unless he/she gets a prescription for them from his/her doctor. And the maximum amount he/she can set aside is capped each year. Previously, employers set the cap, typically up to $5,000. Keep in mind that FSA funds don’t carry over year to year, so one must use the total amount he/she set aside or lose it.
Carelessly going out of network
One of the big selling points of a preferred provider organization (PPO) over a health maintenance organization (HMO) is that if one has a PPO, he/she can opt to get his/her care from doctors or hospitals that don’t participate in the plan’s network, whereas with HMOs he/she can’t.
The only time that won’t work is when one receives non-network care involuntarily, such as during a trip to an emergency room of an in-network hospital where the doctor taking care of him/her isn’t in the network, or when he/she has surgery and the anesthesiologist doesn’t participate in the plan.
Strictly speaking, he/she has no legal recourse but to pay those bills. Yet in practice, polite but persistent complaints to the provider or the insurer can often succeed in reducing the price.
Missing the Medicare sign-up deadline
If one is already retired or plan to retire at 65, Medicare enrollment is a no-brainer: he/she can Sign up during the month he/she turns 65 or the three months before or after.
Where people get in trouble is when they, or a spouse, continue working past their 65th birthday.
Once an individual (or his/her spouse) stops working and he/she loses his/her insurance—even if he/she can continue with the employer plan through COBRA or some other retiree benefit—the individual must switch to Medicare as his/her primary insurance. He/she needs to sign up within eight months after he/she stops working. If he/she don’t and his/her private plan finds out, it can refuse to pay for his/her health care.
It gets worse. If the individual doesn’t sign up for Medicare when he/ she should, he/she will be hit with a permanent 10 percent premium surcharge for every year he/she should have been on Medicare but were not.
Being too eager to pay your bills It probably seems strange to suggest that “paying your bills too quickly” could ever be considered a mistake, but that’s basically the case when it comes to health insurance.
What should one do instead of paying his/her healthcare bills as soon as they arrive on his/her doorstep (or shortly thereafter)? According to the Kaiser Family Foundation’s Karen Pollitz (via WebMD), he/she should wait to send in payment until after he/she received an explanation of benefits, or EOB, from the insurance company.
Assumptions and Presumptuous Mistakes are quite expensive. As much as life is valuable and one needs full enjoyment of life, these costly mistakes should be made away speedily.