Florida Health Insurance Blog

Misunderstanding health insurance

In viewing the healthcare system it is helpful to step out of it and then view it.  If we compare it to the care, maintenance and insuring of a car or home, then it makes more sense.  Let’s say a person takes a job.  Let’s say the employer in this imaginary example gives their employees a car benefit.  The employer’s car benefit includes providing the employee’s car insurance to cover accidents and the other things auto insurance now covers.  Now, let’s say this employer’s benefit plan also includes a warranty.  The warranty will pay for the repairs the employee’s car will need.  Let’s also say the plan also pays for maintenance costs.  Now finally the employer’s plan will pay your car to have all the nicks and dings taken out of it.   This is what people expect of their health insurance plan.  Health insurance is no longer insurance, it is insurance with a warranty, a preventative maintenance plan and covering old damage. 

The Role of the Government

A way of seeing the role of a government plan is like the role of a big city’s public transit system.  Cities develop around their modes of transportation.   Cities that developed before cars look different than cities that developed around the automobile.  Cities such as New York and Chicago invested in transit systems before automobiles became the primary mode of transportation in the US.  Public transportation means that everyone has access to transit, but does not eliminate other modes.  People can walk, take taxis or drive cars if they choose.  With my healthcare plan, the government’s healthcare option would play a role similar to the role of public transit.  It is there for everyone, but everyone still has choice.  Our cities would not have grown and prospered without having a public transit system and supporting all other forms of transportation as well. 

The government would have a national public HMO that everyone could have.  It would be available to every citizen and legal resident no matter their age, health or financial situation.  The government plan would focus on primary care.  The government public HMO would becomes the payor for healthcare services under $5000 or $10000.  The government only pays up to $5000 or $10000 maximum per person per year, no more.   Each person would select a primary care physician.   There would be emphasis on regular care, checkups, testing, prevention and wellness.  

The plan would be offered at very little or no cost.  There may be a sliding scale based on income.  The idea is that everyone will have access to primary care.  There would be no reason for anyone to put off going to the doctor or going to the emergency room for a non emergency situation.   Some people would continue to use emergency rooms as this has been the habit for a couple of generations.  Controls would need to be implemented so that people would go to their primary care physician when that is the proper medical treatment.  With this plan, there would be no advantage for a person going to the emergency room for a non emergency.

As this is an HMO, costs could be controlled.  People that would prefer to have more freedom, such as not needing to have a primary care physician or need a referral to see a specialist could take private health insurance just like that do now.   In this plan, everyone has access to primary care either with the government public HMO or with their own private health insurance plan.   Private health insurance would be like now, either by being on an employer sponsored group health insurance or on individual health insurance.   

Since the burden of unpaid healthcare and abuse of the emergency room would be lifted off the hospitals, then there would be no passing on these expenses.  Currently, unpaid medical expenses are passed on to those that do pay.  This raises the costs of healthcare and health insurance.  This should lower healthcare costs and health insurance costs or slow the rise of healthcare costs.

Florida Health Insurance and Medicare Website
www.floridahealthinsurance.com
International Health Insurance Website
www.insurance-network.com

You have been working at a job that has an employee benefits including a group health insurance plan.  You might have the insurance plan for yourself, for yourself and your spouse, for yourself and your children or for your entire family.   Then you find that you are losing your group health insurance.

 This could happen for a variety of reasons.  Maybe you lost your job.    Maybe you quit your job to take another job.  The new job either does not offer health insurance or you have to wait before it starts.    You might lose your employer group health insurance because the company you work for decides to discontinue or reduce their employee benefits.  Maybe your hours were reduced and so you no longer qualify for the group health insurance.   Maybe you are getting divorced and you were covered as the spouse on his or her insurance.   Any number things can happen with result being, you have lost your employer group health insurance.  

So, what now?   The easiest situation is the person that is changing jobs and the new job has health insurance and employee benefits.  You just have to wait until the new benefits start.  Often there is a 90 day waiting period before benefits start.  In this situation, where you know you will be getting new benefits at a certain time, there are couple things to consider.   The first is your current health.  If your health is good or if you or a family has health issues helps determine what is the best way to handle the gap in insurance between when the prior employer’s insurance ends and the new employer’s insurance begins.   If there are no problem health issues, then a temporary health insurance plan is a good choice.  You can find those at www.floridahealthinsurance.com/hpa  if you or a family member has some health issues, where a break in coverage or having those conditions would be a problem, and then you need to seriously consider taking COBRA benefits during the gap between plans.

COBRA, the Consolidated Omnibus Budget Reduction Act was passed in 1985.   COBRA is the federal legislation that governs health insurance continuation for employer’s having 20 or more employees.  It applies to most businesses. There are few exceptions to this.    If your employer is governed by COBRA, and you have lost your employer group health insurance and the employer still has their group health insurance plan in force, then COBRA legislation governs what is available to you and for how long. 

The most basic benefit period is 18 months.  This means that you and anyone in your family that was on the group health insurance plan could continue with their health insurance for up to 18 months from the time they lost health insurance.   Other longer benefit periods would apply if the person was disabled or lost their insurance due to divorce.   COBRA is the responsibility of the employer and there are strict guidelines for notification.   The insured has time periods to make a decision and to pay.   It is important to know what these are if COBRA is the only health insurance option.   The COBRA legislation can be found at www.floridahealthinsurance.com/cobra.htm

If you qualify for individual health insurance, then that might be the best option.  The reason is the individual health insurance plans generally cost less than employer group plans.   This comes as a surprise to many people.   Group health insurance plans have to include all eligible employees and family members.   They qualify irrespective of their health.   This is good for people that have health problems that would not qualify for a medically underwritten group health insurance plan.   It does mean that the cost of the group plan has to be higher to cover the costs of guaranteeing insurance to everyone.    Employer group health insurance plans also include many mandated or required benefits.   Every mandated benefit increases the cost of the insurance.

Finally, we have the situation where you have lost your employer health insurance due to the employer going out of business or discontinuing their group health insurance.   In this case COBRA is not an option as there is no longer a group health insurance plan.   If you are insurable, then individual or temporary health insurance is a good choice. If you are uninsurable then you would need to consider a HIPAA guaranteed issue plan, CoverFlorida or if your state has a state high risk pool then see if you qualify for that.   The same applies to people that have left a job from an employer that is not governed by COBRA.

COBRA is for businesses with 20 or more employees.  States have their own legislation to govern insurance continuation for businesses with less than 20 employees.  You should check in your state.  In Florida we have mini-cobra for groups with less than 20 employees.

In summary, your choices are temporary health insurance, COBRA continuation, individual health insurance, HIPAA, CoverFlorida or your state’s high risk pool.   You can find detailed information on all of these options at www.floridahealthinsurance.com