Paying for Care – Health care coverage for Stress

If you’ve paid attention to national news at all lately, you’ve probably heard or read about the call for health-care reform. Many people are experiencing difficulty accessing the care they need, even if they have private insurance from an employer or other source. Nearly across the board, employers are asking workers to contribute more toward their health care, forcing many people to rethink their care, and possibly even put off care that they need. The National Coalition on Health Care, a nonprofit, nonpartisan group of more than 70 organizations working together for better health care for all Americans, reported that employees who are cov­ered by health insurance through their jobs are paying 120 percent more toward copays and deductibles than they were in 2000. The cost to an employer for a single health plan for a family of four averaged $12,700 in 2008. That means that the average health plan costs for a small company with 20 employees would be more than a quarter of a million dollars each year. To offset their costs, employers are asking workers to contribute more and more toward their insurance. The average cost to employees in 2008 was $3,400.

These rapid and significant increases in the cost of health care are squeezing the budgets of employers and individuals, but, hopefully, health-care reform will soon be under way, and services will become more available and equitable. If you are covered by a parent’s insur­ance and can get all the care that you need, consider yourself lucky, because many people do not have that advantage.

Locating and getting access to help for stress-related problems can be particularly challenging, because the problems can be physical, psychological, or both. As you know, exposure to long-term stress can lead to problems ranging from anxiety and depression to colitis, asthma, and sleep disorders. A doctor treating a patient for a stress-related medical problem—migraines, for instance—might recognize that stress is an underlying cause for the condition and recommend that the patient consult with a psychologist or psychiatrist. While your insurance might pay for you to see a doctor about your frequent headaches, it may not provide coverage, or may provide only limited coverage, for psychotherapy.

Another problem is that, while an insurance company normally will cover costs associated with a serious health event, such as a heart attack (which, as you know, can be stress-related), it often is reluctant to cover costs of preventative measures, such as a gym membership, yoga classes, lifestyle assessment, or counseling. It’s ironic that try­ing to find treatment for stress-related disorders can turn out to be so stressful!

Gaining access to mental health care can be especially challenging. Many health-care plans include very limited coverage for counseling or psychotherapy, forcing families to make up the difference between what their insurance covers and the cost of treatment. Psychotherapy fees can cost upward of $75 for a 45-minute session, making the cost prohibitive to many families and individuals.

Hopefully, this situation will improve beginning in January 2010, thanks to a law enacted by former president George W. Bush in 2008. The mental health parity law requires group health plans to provide the same coverage for mental health conditions such as depression, substance abuse, and bipolar disorder as they would for conditions such as heart disease or cancer.

This law won’t benefit everyone, however, as it doesn’t apply to companies with fewer than 50 employees or to people who buy their own insurance. Still, it will benefit some and may help to raise aware­ness of issues associated with mental health and its treatment. Mental health advocates worked hard to get the law put into effect, and it’s considered a victory in the fight to get treatment for mental health on par with that for physical health.

With more than 45 million Americans uninsured, unemployment on the rise, and the number of employer-provided health plans declining, an increasing number of Americans are relying on pub­licly funded care, or simply not getting the care that they should.

Health-care plans for children are available, meaning that no child should be left without care, but the applications can be complicated and too difficult for many people to complete. Experts and groups such as the National Coalition on Health Care are working to figure out how to solve these problems as they anticipate an increasing need for health-care services, particularly in the area of mental heath.

If you’re like most teenagers, you probably don’t spend a lot of time thinking about health insurance. It simply isn’t a topic that’s high on your radar. If you find yourself in a situation where you feel you need treatment that your insurance doesn’t cover and your fam­ily can’t afford to pay for it, however, it may suddenly become an important issue. Let’s take a look at the major programs and types of insurances available.

Employment-based health insurance. This is health insurance that an employer provides as a benefit to employees, and some­times, but not always, their families. The insurance may be pro­vided at no cost to employees, although that is becoming increasingly unusual. Most companies require workers to share some of the costs in the form of copays or deductibles, with requirements vary­ing tremendously from company to company. And it’s important to understand that not all companies offer insurance to employees. In Delaware, for instance, 64.2 percent of all companies provide some level of health-insurance overage for employees, according to the Centers for Disease Control and Prevention. In Montana, however, only 40 percent of all companies offer insurance as a benefit to employees. Larger companies are far more likely to provide insur­ance than smaller ones, and coverage may vary tremendously under this broad umbrella of insurance, depending on the type of policy.

Insurance from one company might come in the form of a Health Maintenance Organization (HMO), for instance, which is a type of health-care coverage that offers care from doctors, hospitals, and other providers with whom the organization has contracted for ser­vices. An HMO generally requires approval for many treatments that would automatically be covered with another type of plan, such as a Preferred Provider Organization (PPO) or a Point of Service (POS). HMOs only cover care provided by approved health-care providers who participate in the HMO’s plan and agree to its guidelines and restrictions. PPOs are managed care organizations that use hospitals, doctors, and other providers who agree with an insurer to provide care at lower costs to the insurer’s clients. PPOs generally are more flexible than HMOs, and usually allow you to choose which health­care providers you wish to use. POSs are sort of combinations of HMOs and PPOs. POSs allow you to see any provider you want, but you’ll pay more out of pocket if the provider isn’t part of the insurer’s network.

Privately purchased health insurance. If someone does not have a job or works for a company that doesn’t provide health insur­ance, or is self-employed, he may need to purchase his own insur­ance. Who gets insurance and how much he’ll have to pay for it varies from state to state. Insurance costs much more in some states than in others, because each state has its own regulations regarding insurance costs. Regulations regarding who can get insurance also vary. In most states, for instance, an applicant can be turned down for insurance based on his health status.

Government-provided health-care coverage. People who don’t have jobs that provide health insurance and can’t afford to buy their own may qualify for Medicaid or the State Children’s Health Insurance Program (SCHIP), which covers anyone who qualifies up to age 18. In 2007, 83 million people were covered by government programs, including 23 million children. Still, more than 8 million children remained without health insurance, according to govern­ment statistics.

If your family is a low-income one and doesn’t have any health insurance, you might qualify for government-provided health-care coverage. Medicaid is a federal program, but it’s state-administered, which means that requirements for eligibility vary from state to state. A big problem occurs when a family’s income is too high to qualify for Medicaid, but they don’t have enough money to cover medical expenses. You can learn more about who is eligible for Med­icaid at www.cms. hhs. gov/medicaid/eligibility or www.cms .hhs. gov/whoiseligible .asp. More information about the SCHIP programs is available at www.cms. hhs .gov/schip or www.insurekidsnow .gov. You also can learn more by calling 1-877-KIDS NOW.

If you are 18 or younger and do not have health insurance, you should know that you often have the right to coverage. Children can be covered by Medicaid in some states; in families where parents don’t qualify for Medicaid but can’t afford to buy health insurance, children should be covered by SCHIP.

No matter what type of insurance you have, or how it’s provided, it’s important to read the terms and applications carefully to see what might be covered and what isn’t. Also, try to determine the terms of payment for services. Most doctors will submit a request for payment to your insurance companies, but some plans require that you make the payment to the doctor and then submit a claim the insurance company for reimbursement. If you must wait for reimbursement, be sure to make arrangements for payment with the doctor’s staff.

Types of insurance coverage that you can choose to meet your particular health insurance needs

Finding coverage for critical illnessTaking a look at long-term careThinking ahead about disability

This post helps prepare you before an accident, the onset of serious illness, or other critical health-related situations may occur by explaining the main points about types of insurance coverage that you can choose to meet your particular health insurance needs. Having this knowledge in advance can lessen the impact of a sudden change in health status.

You may live in an area with a high incidence of a particular disease or condition. Perhaps family history raises concerns about your susceptibility to a critical illness or disease. In these situations, you may want to consider setting up a finan­cial cushion — beyond what your health insurance policy offers — in anticipation of above-average medical expenses.

Some insurance companies offer specified or dread disease policies, most commonly cancer insurance. These policies pay a cash benefit for procedures and treatments that con­ventional medical insurance may not cover. The dread dis­ease plans pay a fixed dollar amount for every day you’re in the hospital or receive treatment on an outpatient basis only if you contract the specific disease or group of diseases that the policy cites.

Don’t think of a dread disease policy as a replacement for gen­eral medical coverage: The policy may limit the amount of benefits it pays. In fact, some states regard dread disease poli­cies as offering little value or protection to the policyholder and have banned or restricted such policies. The cost of a dread disease policy may not be very high because it covers very specific conditions. Even so, weigh the cost of the pol­icy carefully compared to the benefits it pays before you buy.

Think about your family history and lifestyle as you shop for a dread disease policy: These factors may help you get a sense of whether you’re at risk for a particular disease. Start by examining plans carefully, because they often exclude cover­age for problems resulting from the specified disease itself, such as infections, diabetes, and pneumonia. In some cases, you have to wait several years after you buy a policy before the plan will pay for treatments. Always check the fine print for the following:

All-inclusiveness: Benefits should include expenses for items such as hospital stays, medicine, surgery, doctors’ visits, radiation treatment, chemotherapy, and recon­structive surgery after a mastectomy.Additional benefits during a hospital stay: You may find a policy that offers additional benefits after you’ve been in the hospital for more than 90 days. Be warned, however, that research states that the average hospital stay for cancer is only 13 days.Travel expenses: When treatments mean traveling long distances to a hospital, you definitely want a policy that covers your travel expenses — and perhaps travel expenses for a companion.Double coverage pay: Keep an eye out for whether the dread disease insurance plan will pay benefits even though you’re covered under another policy. Also check whether the other policy will pay benefits if you have a dread disease policy.

Most dread disease insurance policies exclude people who have already been diagnosed with the disease.

Insurance companies often pay for bone marrow transplants and stem cell transplants to treat leukemia and lymphoma. However, insurers may not pay for these types of transplants when they’re used to treat other types of cancer, where they’re still considered experimental.

When you’re evaluating a dread disease insurance plan, ask about how the plan pays for experimental procedures.

Some dread disease insurance plans do one or more of the following:

Adjust premium payments based on your lifestyle or family historyPay an initial lump sum and then pay for various costsPay a single lump sum at the time of initial diagnosis and then end the coverage (which helps to lower their premiums)Increase premiums as you age

People are living longer, so they’re more apt to experience serious illnesses or injuries that can temporarily put them out of commission. A critical illness plan covers more than just one condition. When you don’t need disability insurance (because you expect to be back on your feet), critical illness insurance steps in to fill the void.

In general, although benefits vary from plan to plan, critical illness insurance pays you a lump-sum benefit if you suffer one of the covered critical illnesses or injuries.

Catastrophic limit is another way to refer to maximum out-of-pocket. In fact, major medical insurance is sometimes called catastrophic insurance. Major medical insurance may pay over an extended period for hospitalization costs and other health services that exceed the maximums your basic plan provides. See this post about How to Evaluate Your Health Insurance Plan Options  for more information on major medical insurance.

Most insurance plans, whether public or private, don’t cover home health care at all. If they do, the services they cover may be very limited. Some plans, for example, won’t pay for a care provider who is a member of the immediate family.

One way to enhance coverage for catastrophic illness is to pur­chase a catastrophic coverage policy. These policies are designed to pay for hospital and medical expenses that exceed a very high deductible, perhaps $20,000 or more. Such policies may also provide for a fairly high maximum lifetime limit.

Another approach is to add a living insurance rider to a life insurance policy. A living insurance rider provides benefits to the insured — while the insured is still living — in case of a catastrophic illness.

Long-term care insurance policies are special policies that pro­vide coverage for nursing home stays and home health care for a period established when you buy your policy. These policies are also called convalescent care or nursing home insur­ance. The policies are usually indemnity-type policies, mean­ing that they pay an established amount for each day of coverage you spend in a nursing home, regardless of the actual cost you incur.

The goal of home health care can be to maintain, improve, or restore a person’s health. Usually, a doctor orders home health care and writes a plan of care, or instructions for the patient and the caretakers. In addition to registered nurses and licensed practical nurses, many other kinds of care providers may play a role, including the following:

Home health aides and visiting nursesHomemakers from an outside service (housekeeping duties; no medical-related duties)NutritionistsPersonal care attendants (PCAs — meal preparation, bathing, laundry, light housekeeping, and so on)Physical, speech, and occupational therapistsSocial workers

Patients may also need certain pieces of equipment at home, such as hospital beds and accessories, respirators and oxygen tanks, wheelchairs, and walkers. Major medical policies usu­ally cover these expenses.

Nursing homes are characterized by the type of services they provide:

Custodial care homes: These facilities are intended to maintain and support the individual’s current level of health, while trying to prevent any further decline. Peo­ple in custodial care homes usually need a place to live and help with activities of daily living, which non-medically trained professionals can provide. This type of nursing home is the lowest level and least expensive of the three.Intermediate care facilities: These facilities provide planned, continuous programs of nursing care for resi­dents who can’t live alone. These programs are preven­tive and rehabilitative.Skilled nursing facilities (SNFs): A doctor must pre­scribe care for people in these facilities. Registered nurses and other medical personnel provide specialized medical care 24 hours a day.

Major medical coverage may cover the cost of a skilled nurs­ing facility, but not the cost of a custodial care facility.

See the Medicare and Medicaid sections in a later post for more information about catastrophic coverage and long-term care.

Beyond the challenges of suffering pain or discomfort and undergoing treatment, disability may also mean loss of income. To replace this loss, you may be able to draw on var­ious sources of financial compensation, such as the following:

Social Security: For those who are severely disabled and unable to work at allWorkers’ compensation: For work-related illness or injuryCivil service disability: For federal and state govern­ment workersAutomobile insurance: For disability due to an auto­mobile accident

Check with your state insurance department to see whether your state mandates and monitors disability plans. In states that do, your employer automatically deducts premiums from your paycheck. You file claims directly with the state.

If you aren’t eligible for one of these sources, you probably won’t receive compensation for lost income (other than sick-leave benefits from your employer), which is where disabil­ity insurance comes in.

Short-term disability insurance covers only loss from illness or disease; it excludes loss from accident or injury. Employer-sponsored plans may include STD insurance as part of a health insurance plan. Benefits generally pay a certain per­centage of your salary for a certain number of weeks, based on your years of employment.

For short-term disability, experts advise that you not rely on disability insurance — the cost of an STD policy may out­weigh the benefits. In addition to any sick-leave benefits your employer pays, live on your savings or the sale of an invest­ment for a couple of months.

Long-term disability insurance kicks in when short-term disability ends, usually after 52 weeks. Its goal is to lessen the threat of financial disaster. LTD plans pay monthly benefits — from periods of one year up to a lifetime, depending on your plan — when disability prevents you from returning to work. Your plan also specifies when your benefits begin, how much you will receive, and any coverage limitations.

Check with your employer to see whether a group long-term disability policy is available. Some LTD plans offered through employers may be more cost-effective than in individual plans.

Disability insurance replaces only a percentage of your lost wages, usually about 60 percent of your income at the time you buy the plan. This insurance doesn’t cover the cost of reha­bilitation, which is a medical expense. Medicare benefits, which cover medical expenses, take effect in your 25th month of disability.

Deciding whether to buy disability insurance depends on your individual situation. You need to consider several fac­tors, including the following:

How much financial risk are you willing to assume if you’re unable to work for an extended period?How long can you live on your savings and investments?What will it take, in terms of time and effort, to rebuild your savings and investments and recoup lost interest?Can your spouse’s income can make up for your lost wages?

If you decide to buy a disability insurance policy, think about the following:

How the insurer defines “disability”: One insurer may define “disability” as being unable to perform the duties of your customary occupation. Another insurer’s defini­tion may mean that you can engage in no gainful employment at all.When benefits begin: Benefits may begin from one to six months or more after the start of disability. If you can afford the lost income, lower your premiums by choos­ing a later starting date.Whether the policy covers both accident and illness.

Benefits may be taxable depending on who pays the premiums for the disability policy. The following parameters usually hold true, but you should consult your tax professional with any questions:

If you pay the premiums for an individual policy, the benefits you receive aren’t subject to income tax.If your employer pays some or all of the premiums under a group policy, some or all of the benefits may be taxable.