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Understanding Health Insurance Coverage Under the New Law

Autumn 2013

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Enrollment started October 1, 2013, in the new health insurance plans created by the Affordable Care Act. Coverage under the plans will be effective January 1, 2014. Several recent columns have explored this major change in health insurance. People without coverage or who need to consider changing coverage should start the process at www.healthcare.gov. People living in California should start at www.coveredca.com.

People living with HIV in California and who qualify for the ADAP program will be able to have their portion of the health insurance premiums paid by the OA-HIPP program, so there will be no premiums to be paid by the insured person. See www.cdph.ca.gov/programs/aids/Pages/tOAHIPPindiv.aspx for more information on the OA-HIPP program. It is recommended, however, that you wait a few weeks before signing up for a program as the website currently does not identify which doctors participate in which plans and the plans have not yet published their prescription formularies. It is important for PLWHA to find a plan their HIV doctor is part of and that the drug formulary of the plan covers their medications, especially the non-ADAP medications. Remember, however, the deadline for signing up for a January 1, 2014 effective date is December 15, 2013.

Now that health insurance is becoming available to people who had been unable to purchase it due to their medical history, it would be a good time to review just what health insurance is, the types of coverage available, and some of the terms people getting health insurance should know.

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In an effort to simplify comparison of various health insurance plans, the health exchanges through which the plans will be purchased have standardized plans as much as possible. Under the Affordable Care Act (ACA) health exchanges there are only three types of plans, all of which are considered "Managed Care Plans":


Health Maintenance Organizations (HMO)

Under an HMO plan, all medical services are provided by medical providers, doctors, hospitals, laboratories, etc. who are part of the HMO network. By joining the network, the providers have agreed to limit their medical costs and follow the medical protocols of the HMO.

Once enrolled, the insured member chooses a primary care physician (PCP) and that physician coordinates all of the care of the member, determining what tests and procedures are necessary and deciding when the member needs to be referred to a specialist. Under an HMO, the PCP must authorize all care; the member cannot see specialist without a referral by the PCP.

To further complicate this issue, most HMOs, rather than contracting with individual doctors and hospitals, contract with large medical practice organizations which in turn subcontract with hospitals and other providers. The result is that care under the HMO is provided by multiple groups of providers who operate separately from one another, while still under the HMO.

Upon signing up for a primary care physician, the member is also signing up for the medical practice organization the PCP is a part of and can only refer the member to other providers within that one organization. Even though the HMO itself has contracted with many other organizations, the member's health care will only come from the organization of which the PCP is part.

The only exception to this type of HMO is called a staff model, where all providers are employees or contract directly with the HMO. Kaiser Permanente is the largest example of a staff model HMO.

The main features about HMOs are:

  • The member must use a provider within his or her network in order to have the medical charges covered; and,
  • All care must be provided, authorized, or referred by the primary care physician, frequently called The Gatekeeper for obvious reasons.


Exclusive Provider Organization (EPO)

An EPO is very similar to an HMO with one major exception. Although the member must use network providers, an EPO does not require all care to go through a primary care physician. A member can determine when a specialist is needed and make the appointment directly as long as the specialist is also in the network. Again, the choice is limited to those providers within the medical organization the member has chosen when enrolling.

However, like an HMO, no benefits are paid if the member uses a provider outside the plan's network.


Preferred Provider Organization (PPO)

A PPO will also have a network of providers like an HMO or an EPO. Like an EPO, It will not require using a primary care physician as gatekeeper.

Unlike both an HMO and EPO, some coverage will be provided if the member uses a provider that is totally outside the plan's network. Benefits paid by the plan will be much higher if provided by network providers, with out-of-network providers paid at a much lower rate. This encourages using providers in the network.

Because some coverage is provided outside the network to providers who do not contract with the plan, PPOs tend to have more expensive premiums than HMOs or EPOs.

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This article was provided by Being Alive. It is a part of the publication Being Alive Newsletter. Visit Being Alive's website to find out more about their activities, publications and services.
 
See Also
U.S. Health Care Reform

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