How a plan covers various medical expenses

Finding out about benefits for different types of servicesAvoiding surprises in coverageLegislating pre-existing conditionsConsidering an alternative path

The goal of this post is to help you avert surprises by mak­ing you aware of some of the nuances of plan benefits. Know­ing ahead of time how a plan covers various medical expenses may influence some of your health care decisions. Changes in health care legislation may also affect your benefits.

When you check into how your health insurance plan covers doctor office visits, ask about the difference in coverage between routine visits, such as checkups and wellness services, and visits for illness or injury. Some plans may pay differently, depending on the reason for the visit and whether the provider is in or out of the plan network. Plans may require copay­ments, set annual limits for wellness services, or require that you meet a deductible before they pay anything.

Preventive care covers a wide range of services, all intended to promote and maintain health. Preventive medicine may include the following:

Blood pressure controlDiet and exercise counselingFamily counselingImmunizations for tuberculosis and influenzaMammograms and Pap smearsRegular, routine physicalsRisk management and substance abuse counseling, including education about the dangers of tobacco, alco­hol, drug use, and high-risk sexual behaviorsScreening for cancer, tuberculosis, cholesterol, and AIDSWell-baby checkups

When you have no symptoms, many traditional health insur­ance plans pay little or nothing for preventive care.

HMOs believe that detecting illness early may enhance the likelihood of appropriate and successful treatment. HMOs receive a fixed fee for covered medical expenses. They find that they save money in the long-term by paying for preven­tive care, which catches problems before they require expen­sive treatment. Covered services vary among HMOs, so as always, check the details of your plan.

Most PPOs also cover preventive care.

Health insurance plans vary in the way they treat maternity and childbirth expenses. Some policies provide benefits for pregnancy complications but not for normal deliveries. Many policies won’t pay for certain procedures, such as elective cesarean deliveries or abortions.

In some cases, you may need to add a rider (a document that changes provisions in the original policy) to your basic health insurance policy to get coverage for prenatal care, normal delivery services, and routine, newborn nursery care (at the hospital). Such a plan may have a separate lifetime maximum amount for normal maternity services.

Maternity riders are generally very expensive, with high pre­miums and low caps on coverage. For example, the cost of the rider may be equivalent to 40 percent of the cap. In addi­tion, a maternity rider may provide no benefits the first year, 50 percent of the cap during the second year, and full cover­age after that.

The Newborns’ and Mothers’ Health Protection Act of 1996 (NMHPA) sets the minimum number of days in the hospi­tal after giving birth for which group health plans, insurance companies, and HMOs must provide coverage. This act applies only to those plans that already provide coverage for hospital stays related to childbirth. After a normal, vaginal delivery, most plans must generally provide coverage for at least 48 hours for both the mother and newborn child. Health coverage for a hospital stay after a cesarean delivery must generally be at least 96 hours for both the mother and newborn child. NMHPA’s requirements affect health plans beginning on or after January 1, 1998.

Whether your health insurance plan covers infertility treat­ment may depend on government regulations. State regula­tions governing infertility treatment apply to health insurance that you buy on your own and that your employer buys. ERISA governs employers’ self-insured plans.

If the state you live in has an infertility insurance mandate, you are entitled to infertility coverage, especially if the man­date is a hard mandate or a mandate to provide, meaning that health insurance underwriters must provide coverage. A man­date to offer or soft mandate requires underwriters to offer cov­erage to employees. Employers aren’t obligated to buy the coverage. Table 3-1 gives some examples of hard and soft mandates. See the Web site of the American Society for Reproductive Medicine, www.asrm .com/patient/ insur.html, which lists the statutes for each state.

Table 3-1: Examples of Hard and Soft State Mandates

Hard Mandates                  Soft Mandates

One cycle of in vitro              Coverage of infertility diagnosis

fertilization after several        and treatment, excluding in vitro

conditions have been             fertilization but including gamete

met                                       intrafallopian transfer (GIFT)

Comprehensive infertility Coverage of comprehensive diagnosis and treatment, infertility diagnosis and treatment,

including assisted                 including assisted reproductive-

reproductive-technology technology procedures procedures

Infertility treatment as a         Coverage of infertility diagnosis

preventive health care           and treatment, including in vitro

service benefit (HMOs)         fertilization

Diagnosis and treatment of correctable medical conditions

Some health insurance plans, such as the ones that churches and school districts buy, may also be exempt from state regulation.

ERISA (Employee Retirement Income Security Act) regulates employers’ self-insured plans, which are exempt from state mandates. ERISA has no provision for infertility treatment.

Some of the health insurance plans that cover infertility con­sider infertility a catastrophic event that affects worker pro­ductivity. Some plans that don’t cover infertility may pay for infertility treatments that are permissible under other cov­ered benefits, such as pelvic surgeries.

Unless your insurance plan contract specifically excludes infertility, you should be covered. If your contract does have an exclusion, read the contract carefully to understand what, specifically, is excluded.

Under the Americans with Disabilities Act (ADA), employ­ers must treat persons with disabilities the same as they treat other employees with respect to the terms and conditions of employment, including fringe benefits such as health insur­ance coverage. The United States Supreme Court ruled that reproduction is a major life activity under the ADA. There­fore, infertility is a disability.

Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA), affirms that discrim­ination based on pregnancy, childbirth, or related medical conditions is considered sex discrimination. Because infer­tility is regarded as a medical condition related to pregnancy, employers must provide you with the same benefits such as insurance and time off from work as their other employees.

Some health insurance plans pay 100 percent of covered charges for routine and diagnostic medical tests and X rays, up to an annual dollar limit. For example, the plan may pay the first $100, after which you pay a deductible and coin­surance. With other plans, you may have to pay first: You pay the deductible and coinsurance, and then the plan pays 80 percent (for an in-network provider) or 50 percent (for an

out-of-network provider) of the covered charges.

If you run a high fever or fall out of a tree, you may visit a hospital emergency room. Both of these conditions is an “emergency” to your mind, and accordingly, you expect your health insurance plan to cover the associated charges, accord­ing to the schedule of benefits, a table or list showing the max­imum amounts a plan pays for covered expenses.

However, some plans may pay one benefit for visits to the emergency room for an illness, such as a fever, and another benefit for an accident, such as falling from a tree. Other plans pay the same regardless of the reason for the visit.

Make sure that you clearly understand what your plan pays for a visit to the emergency room, whether for an illness or for an accident. Also check whether the plan requires notice before you visit the emergency room and, if so, what the penalty is for not giving notice.

Health insurance plans may impose a deductible and coin­surance or a daily copayment amount for hospital coverage. In either case, the plans usually limit coverage to the rate for a semi-private hospital room, as defined in the insurance pol­icy. Payment may differ based on whether the hospital is in a plan’s network.

Check your hospital bill carefully: Mistakes are common. Make sure you actually received each service the bill lists.

Coverage for surgeons’ fees for surgical procedures may vary depending on whether the provider is in-network. These rates also apply to surgery-related services, such as anesthesiology, pathology, and radiology.

Find out ahead of time whether both the surgeon and the hospital are members of the plan network.

Some plans pay 100 percent of fees for outpatient surgery, which is probably less expensive than inpatient surgery because you spend your recovery period at home instead of in the hospital.

You may pay a penalty if you don’t get certification (advance authorization) before you enter the hospital or before you undergo outpatient surgery. Check your plan’s provisions.

Insurers usually base their coverage on reasonable and cus­tomary fees for surgical procedures.

Individual states may set their own, stricter obligations on insurers in certain areas, such as shortening the maximum waiting periods and requiring special enrollment periods. Check with your state’s insurance department for these changes. (To find information on your state insurance department, contact the National Association of Insurance Commissioners, listed in the Resource Center.)

HIPAA defines “pre-existing condition” as “a condition (whether physical or mental) regardless of the cause of the condition, for which medical advice, diagnosis, care, or treat­ment was recommended or received.” The definition no longer includes a condition for which a prudent person would have sought treatment.

Health insurers used to have the option to deny a new plan member’s coverage of a pre-existing condition until after a waiting period. They could even refuse coverage for a person with a poor health history or with a specific illness, such as cancer or AIDS.

The HIPAA, which took effect July 1, 1997, changed this situation. All group health plans with two or more partici­pants are subject to this law, whose main purpose is to make health coverage more continuous and more portable for people who change jobs, especially for people who have a pre­existing condition. The following descriptions and explana­tions are some of the highlights of HIPAA.

Insurers can’t deny coverage to eligible employees and their dependents under a group health care plan or insurance pol­icy based on their health condition, medical history, or other evidence of insurability (a statement of proof of a person’s health condition or other health-related information). In addition, insurers may not charge employees higher premi­ums or plan contributions based on these conditions.

Under HIPAA, an insurer may apply a pre-existing condi­tion exclusion or waiting period only if it’s for a condition for which medical advice, diagnosis, care, or treatment was recommended or received during the six-month period before your enrollment date. (If you had a medical condition and didn’t receive medical advice, diagnosis, care, or treatment within the six months before your enrollment date, then the condition is not considered to be pre-existing.) An insurer can apply a maximum waiting period of 12 months after your enrollment date.

For example, if you received treatment for asthma in Octo­ber and plan to enroll in a new policy the following January, the asthma may be considered a pre-existing condition and may be subject to, at most, a 12-month waiting period. (Until the waiting period is over, you pay the medical costs for treating the asthma.)

The waiting period must be reduced by the number of days the individual had previous creditable coverage — coverage under a group health plan (including COBRA; see this post about How to Evaluate Your Health Insurance Plan Options), HMO, individual health insurance policy, Medicaid, or Medicare — without any break in coverage of more than 62 days. Coverage made up only of excepted benefits — benefits provided under a separate policy — such as coverage solely for dental or vision benefits, doesn’t count.

So, for example, if you have seven months of creditable cov­erage, the new plan may impose a five-month waiting period for a pre-existing condition. However, if a previous health plan covered you continuously for five months, and then COBRA covered you for seven months, you receive credit for 12 months of coverage by your new group health plan and avoid a waiting period altogether.

The maximum waiting period differs for late enrollees: 18 months is the maximum waiting period allowed for condi­tions treated within the six months before enrollment. A late enrollee, or entrant, is a plan member or dependent who enrolls in a plan on a date other than

The earliest date on which coverage can become effec­tive under the terms of the planOn a special enrollment date, such as when a change in family status occurs or you experience loss of group cov­erage under another plan

Employees or dependent spouses who are otherwise eligible but not enrolled in a plan aren’t considered late enrollees if they enroll in a group plan within 30 days of one of the following:

A loss of eligibility for group coverage under another plan due to separation, divorce, death, termination of employ­ment, reduction in work hours, termination of employer contribution toward coverage, termination of COBRA, or state-mandated continuation of coverageA change in family status due to marriage, birth of a child, or adoption of a child

Some of the new limits set by HIPAA disallow exclusions for newborns, for children adopted while the employee is cov­ered under the plan, and for pregnancy (including late enrollees).

An applicant may receive credit (creditable coverage) for pre­vious health insurance as long as the coverage didn’t lapse more than 62 days. Group health plans and health insurance issuers are required to provide a certificate of coverage, show­ing the dates that an individual is covered by a group health plan, to document their creditable coverage. By showing this certificate to the new group plan administrator, you can get credit toward a pre-existing exclusion period.

Special enrollment rights permit individuals to enroll with­out having to wait until the plan’s next regular enrollment period. These rights are provided to employees who were eli­gible for and declined enrollment in the plan when first offered because they were covered under another plan, and to individuals upon marriage or upon the birth or adoption of a new dependent.

If you left a job that provided group health insurance cover­age or had coverage under another plan for more than 18 months without a break of more than 62 days, HIPAA makes getting individual insurance (or satisfying a group plan’s pre­existing condition clause) easier for you.

Individuals must meet the following requirements to be eligible for access to individual insurance:

You must have been covered for at least 18 months, most recently under a group health planYour group coverage wasn’t terminated because of fraud on the individual’s partYou aren’t eligible for or have exhausted your COBRA (or similar state provision) benefitsYou aren’t eligible for coverage under another group health plan, Medicare or Medicaid, or any other health insurance coverage

If you haven’t had group coverage and are having difficulty getting insurance on your own, check with your state insur­ance department to see whether your state has a high-risk health insurance pool.

Don’t try to avoid a waiting period by hiding a condition. Insurance companies investigate thoroughly, and they will catch you.

A health insurance policy often includes a pre-admission certification provision. Before you enter the hospital as an inpatient for (non-emergency) surgery or other type of serv­ice, you must apply for pre-certification — advance authori­zation for the hospital stay. Pre-admission certification allows a health insurance plan to determine whether a proposed treatment or service is medically necessary, whether it is cov­ered by the plan, and how long the hospital stay should be, based on established medical criteria. Certification helps a plan limit its costs by weeding out unnecessary procedures and services. Without this certification, a policy may not cover your hospital stay.

With some health insurance plans, you, your doctor or hos­pital, or another health care provider must notify the plan in writing or by telephone before the date of treatment or serv­ice, usually within 72 hours. Expect to provide details such as the following:

DiagnosisRelated symptoms and their durationResults of any physical exam, lab tests, and X raysTreatment planDoctor and facility informationProposed admission date and number of inpatient days requiredDate of proposed surgery or other procedure

The plan subsequently notifies you of its decision. If certain treatments or services aren’t certified, the insurer may reduce benefits by a penalty (see the schedule of benefits).

If you go to the hospital for an emergency, you may still have to notify your health insurer within a specified time to avoid a penalty.

In recent years, the dollar amount that Americans spend on alternative treatments (also referred to as nontraditional, unconventional, and complementary treatments), herbs, vita­mins, and supplements has gone up dramatically. Little by little, health insurance plans have begun to cover some of the following alternative treatments:

AcupunctureBiofeedbackChiropracticHomeopathyMassage therapy