"...humans have studied only about 1% of all of the microbes in any given environment ... despite the fact that over  years have passed since the discovery of microbes, the field of microbiology could be said to be in its infancy relative to other biological disciplines such as zoology, botany and entomology." (Microbiology, Wikipedia)
The Young Person's Guide to Health Insurance
The provisions of the new federal health care law are designed to be phased in over several years, but here are two critical dates you need to know... (CALPIRG & FamiliesUSA)
U.S. PIRG activist Abby Berendt Lavoi tells her health care story at a Capitol press conference.
Speaker of the House Nancy Pelosi signs this year’s health care legislation.
For people in their late teens and twenties, getting health insurance can be a lot like a lottery . . .
If you’re lucky, your parents have a good plan that covers you while you are in school or your employer picks up the tab. If you’re not, your options shrink to two: a plan offering good coverage that you can’t afford, or a plan you can afford that covers little to nothing.
Starting this year, under the new health care law, young people will gain access to new, previously unavailable health insurance options. To make the most of those new choices, you need to learn the facts. This guide is designed to help you do that.
The provisions of the new federal health care law are designed to be phased in over several years, but here are two critical dates you need to know:
September 23, 2010: Young people receive new consumer protections and benefits!
• Stay on Your Parents’ Plan till 26: Insurance plans must start allowing young adults to stay on their parents’ plan until age 26.
• No More Dropped Coverage: No insurer can drop your policy when you get sick because of paperwork errors. You will have the right to appeal any denial of care.
January 1, 2014: Even bigger changes are on the way!
• Pre-Existing Condition Denials Are Banned: Health insurance plans will no longer be able to deny coverage or hike your rates due to a pre-existing condition.
• Gender Discrimination Becomes Illegal: The common insurance company practice of charging women more than men for coverage will be against the law.
• You Can Get the Same Benefits as Members of Congress: Through new state-based health insurance markets called exchanges, millions of individuals and small businesses will pool their buying power and negotiate better deals with insurers, just like Congress and federal employees do today.
• Coverage Gets a Lot More Affordable: If you’re having trouble affording coverage and earn less than $44,000 a year as a single person ($88,000 for a family of four), you will get a tax credit to help you pay the cost of coverage on the exchange.
• But You’ll Have to Do Your Part: To keep health insurance premiums low, it helps if everyone pulls his or her weight and gets covered. Otherwise, only the sicker, more expensive individuals seek insurance. So, in 2014, all who can afford it must buy coverage. People under 30 can purchase a lower-cost, bare-bones plan.
As you return to campus this semester, I want to take a moment to make sure you know about some important new changes that will help ensure you have access to affordable, quality health care. I know you might not spend too much time worrying about getting sick or having an accident, but chances are you or a friend have had to seek medical care because of a health emergency or to treat a chronic condition. Thanks to the health care law—the Affordable Care Act—you can be confident that you will have health insurance when you need it most.
Under the new law, you can remain on your parents’ health insurance plan until you turn 26 or find a job that offers insurance. Graduating from college will not mean losing your health insurance.
The new law makes it illegal for new health insurance plans to charge you a deductible or other fees for important preventive services. This means services like flu shots, nutrition counseling, and help quitting smoking will be covered by insurance plans with no additional charge.
The Affordable Care Act also ends some of the worst insurance company abuses. This year, insurers will be prohibited from imposing lifetime limits on care, and it will be illegal for insurance companies to rescind your coverage when you get sick, just because of a mistake on your application.
All of these changes go into effect on September 23, 2010. It is a big day for young people, and it marks the start of a new, better era for our health care system, when Americans will have more affordable choices and more control over their health care. You can learn more about the reforms you will see under the Affordable Care Act in the pages ahead, or by visiting HealthCare.gov.
Best of luck in the semester ahead.
YOUR COVERAGE OPTIONS
Obtaining coverage for the first time can be confusing. With the new health care law, here are the first places to start:
Call Mom and Dad No, really. It is not a joke.
If you want decent health coverage and you are not yet 26, your first call should be to your parent or guardian. The new health care law requires most health care insurance plans to allow you onto your parent’s or guardian’s coverage until your 26th birthday as long as that parent or guardian has a family plan.
If your parents already are carrying a family plan, they will not be required to pay anything extra to cover you. If they have a plan that only covers themselves or themselves and a spouse, they will have to purchase a family plan at the next open enrollment period. Even then, the cost will likely be far less than paying for their plan and a separate policy for you.
This benefit is available to you even if you have not been covered by your parents’ plan for years.
Under the law, most plans must offer this new benefit for their next plan year following September 23, 2010. That means that some plans may ask you to wait until the next open enrollment period to take advantage of this benefit. Other plans, which pre-date the passage of the new law on March 23, 2010, will not be required to allow young people onto their parents’ plans if the young person has received an offer of coverage from his or her employer. To determine when and whether you may be eligible for your parents’ coverage, you should contact the insurance provider.
Log on and Buy It As complicated as the insurance market can be, sometimes a little comparison shopping can go a long way. The health reform law created a new federal government website — healthcare.gov. It lists insurers broken down by state, with links to the plans’ websites where you can actually apply for and purchase policies.
By October 2010 this website will also feature price information for listed plans and by early 2011 it will begin to provide information about the quality of various plans, including the percentage of your premium dollars that must be spent directly on care, rather than overhead costs and profit.
Find a Great Job with Great Benefits Some might say a job with great health benefits is like a unicorn: you have heard stories about them but no one has ever seen one.
Fortunately, the truth is that more than 176 million Americans receive their health coverage through their employer-provided plans, and most are satisfied with their health insurance. That amounts to over half of America’s population, and you may have a chance to be one of them.
The best employer-provided coverage options are typically available at large firms or government agencies. However, many small businesses are now investing in quality coverage options to attract talent.
So when considering a job, definitely stop by your prospective employer’s human resources or personnel office to see what the health insurance benefits are.
THE BASICS OF HEALTH INSURANCE
If you get sick or are injured in an accident, the costs of treating you can quickly exceed most Americans’ ability to pay. A single visit to the emergency room for an unexpected health situation can run into the thousands or tens of thousands of dollars.
So, for decades Americans have bought health insurance policies that ensure they can get basic health care when they need it without paying out of pocket. Every month, individuals—and in many cases their employers, too—pay a certain amount of money to an insurance company to purchase coverage (also called a health insurance plan or policy). That coverage means that in the event of illness, the insurer agrees to cover some or most of the expenses.
Types of Coverage
• Group Coverage: Health insurance plans provided by a company, government agency, or union. Rather than covering one person or one family, these plans cover large groups of people. Group coverage tends to be less expensive and provide more coverage than separate “individual coverage.” In most cases, employers pay a portion of the cost of the premium.
• Individual Coverage: This is coverage bought by the individual, not the employer, for him or herself and his or her family.
Paying for It
• Premium: The amount charged for insurance, usually quoted as a monthly price. For employer-provided insurance, the premium is usually shared between the employer and the employee.
• Cost-Sharing: In addition to premiums, almost all plans use other ways to share costs for medical expenses between the insurance company and the patient. There are three types of cost sharing: “co-insurance,” “deductibles” and “co-pays.”
• Co-Insurance: This cost-sharing method requires a patient to pick up a certain percentage of the cost of a procedure while the plan covers the rest. For example, a plan with 80/20 hospital coinsurance will cover 80% of the cost of your hospital stay; 20% of the costs will be your responsibility.
• Co-Pay (or co-payment): A flat amount that a patient must pay (usually $5 - $20) at the time of receiving medical services.
• Deductible: The amount of costs which you must pay yourself before your insurance pays anything. For example, a plan with a $1,000 deductible would require you to pay $1,000 before the insurance company would pay any money. Generally, plans with higher deductibles are cheaper, but if catastrophe strikes, you’ll be on the hook for the whole deductible. Low deductible plans avoid these unexpected costs but tend to be more expensive.
Existing Health Care Programs
• Medicaid: A government health care program paid for with state and federal money. Each state has its own Medicaid program with rules for who is eligible for benefits.
• Medicare: A federal government program that provides health insurance to people over age 65 and to some disabled people.
Other Insurance Terms
• Open Enrollment: A period during the year (usually one to four weeks) when people in group plans are permitted to change their coverage.
• Primary Care Doctor: Your “main” doctor, the first doctor you see. Some health insurance plans require you to select a primary care doctor who has the responsibility of recommending and approving any visits to specialist doctors (e.g., cardiologist, obstetrician/gynecologist, etc.).
• Out-of-Network Costs: Most health plans have a two-tiered payment structure. If you use doctors and hospitals in your insurer’s network, the costs are lower than if you use non-network doctors or hospitals. The difference in costs may be substantial. Your insurance company will give you a list of which doctors and hospitals are in your network.
• Pre-Existing Condition: A medical condition (such as asthma, diabetes, pneumonia, or anxiety disorder) that you have at the time you apply for health insurance.
Additional Coverage Options
• What about Pre-Existing Conditions?
Today, many insurance plans refuse to cover individuals with a pre-existing medical condition. The new federal health care law bans this practice for children under 19 this year, and adults in 2014. But if you are a young adult with a pre-existing condition today, that news is little comfort in the short-term.
Fortunately, you are not completely out of options. Starting July 1st, the new health care law established a federal program called the Pre-existing Condition Insurance Program (PCIP). You can't be charged more than a healthy person would be for comparable coverage.
• Additional State Options for Covering Pre-Existing Conditions
Many states have their own programs for people with pre-existing conditions (often referred to as state high-risk pools). These plans are separate and distinct from the federal PCIP. More information about them can be found at www.uspirg.org/health-care/statehighriskpools.
FINDING OUT MORE
This brand new website, authorized by the new health care law, is designed to be the one-stop shop for information on coverage, public and private, across the nation. It already provides links to the major insurers offering individual and small group plans in every state, along with enrollment contacts for federal and state insurance programs.
Sometimes the best place to find more about coverage options is where you spend most of your days—at work. Many employers have a human resources department or at least one person who is used to answering questions about health insurance, even if you are not currently enrolled in a work-based plan. Their expertise is a great place to start.
Your Current Insurance Plan
If you already have insurance, even if it is about to run out, contacting your insurance plan can be another good lead. They may sell insurance plans that will fit your needs.
Your College or University
If you attend a college or university, contact their student health office. Many institutions of higher learning offer bargain-basement coverage options that are very affordable. Though the plans are designed to meet student-sized budgets, they often do so by skimping on coverage or having high deductibles. Keep an eye on the fine print and make sure these plans meet the needs you have.
Finding Coverage When You REALLY Can’t Afford It
For certain families and individuals who just cannot afford coverage for themselves, state Medicaid programs can be a crucial safety net option. If you meet the qualifications, the coverage is a very affordable—no premiums and very low co-pays and deductibles.
The catch is that qualifications vary by state, as every state offers its own version of the Medicaid insurance program. Some states open the door to only a small number of people: children up to age six, parents with children eligible for public assistance, or the elderly in nursing homes without assets. Other states allow parents with children and single adults into the program at much higher income levels.
For those who qualify it is hard to beat this deal, so do not miss out. Check in with your state’s social service department or go to www.cms.gov/MedicaidEligibility for the eligibility rules in your state.
GETTING A FAIR SHAKE FROM YOUR INSURANCE COMPANY:
As you begin your search for health insurance, you should be aware of the rules insurance companies must abide by under the new law. These basic protections are slated to come on line beginning this year.
1. The right to stay on your parents’ family health insurance plan until age 26.
2. The right to coverage that cannot be dropped when an unexpected condition or accident makes your care expensive.
3. The right to an appeal process if coverage for needed care is denied by your insurer.
4. The right to information about the cost of insurance and the quality of insurance benefits so that you can choose the plan that works best for you.
5. The right to choose your own primary care doctor, including an obstetrician/gynecologist or pediatrician.
6. The right to emergency care when and where you need it without huge out-of-network costs.
7. The right to a rebate if your insurer spends less than 80% of your premiums on care.
8. The right to free preventive care in any new insurance policy to keep you healthy and your health care costs down.
9. The right to get your children under 19 covered, even if they have a pre-existing health condition.
You can also contact the federal Department of Health and Human Services at
Delivering on the Promise
The recently passed federal health care reform law will make significant changes in how health insurance and health care work for consumers, businesses, and local and state governments, as well as how insurers and providers operate. But whether Americans experience improved care, lower costs and greater access depends largely on what happens next.
The federal bill provides powerful tools. Many of its provisions go into effect automatically or are enforced through federal agencies. But several of the most important decisions are left up to states. Unless state leaders take advantage of this opportunity and put reform into action, consumers and businesses will continue to face soaring premiums and out-of-pocket costs. While there are federal backstops for state inaction, these are an inadequate substitute for the active engagement of on-the-ground policymakers who are able to adapt the law’s requirements to the unique policy and political landscape of their states.
Beyond formulating laws and regulations, states share responsibility for educating the public about health reform. Some of the new law’s changes take effect this year, and many consumers will not be aware of what new benefits are available to them.
This guide has been written to assist state policymakers and advocates as they engage with the numerous issues and opportunities presented by the new law.
States will have the opportunity to create new health insurance exchanges where individuals and small businesses will be able to pool their bargaining power and get information allowing them to choose the best health plan for them. But an exchange should be more than “Expedia for health care.” In giving consumers better choices and offering the help they need in buying coverage, it can act much like the human resources department of a large employer. As a purchasing pool, it can use its purchasing power to drive better quality for patients, and rein in costs.
Key recommendations for states as they create the exchanges include:
* Studying the state’s coverage landscape to ensure the exchange meets its unique needs.
* Offering a powerful, easy-to-use set of tools for consumers, including clear comparisons between plans, quality and cost ratings, and ensuring there are a range of clear, distinct choices, rather than an endless array of confusing products. The exchange should help consumers easily sign up for a plan, and get the benefits to which they are entitled.
* Improving care quality and lowering costs by encouraging payment reforms that deliver better care for consumers. This may be accomplished by actively negotiating with plans on behalf of consumers, stopping excessive premium hikes, setting strong standards and ratings for quality care, and opening eligibility to as many individuals and businesses as possible, allowing them to pool their bargaining power on a single exchange.
* Protecting against the risk of insurers cherry-picking healthy people outside the exchange, which would drive up exchange premiums.
* Ensuring that the exchange’s governance is transparent, accountable, and responsive to consumers’ interests, not those of the insurance industry.
Lowering Costs and Improving Quality
The new law offers a host of opportunities that will allow states to adopt ground-breaking reforms to make their health care systems more efficient and effective. Key strategies include prioritizing primary care via coordinated care teams called “medical homes,” promoting the management of chronic diseases to help patients prevent acute flare-ups of their conditions, bundling payments to hospitals to reward those who provide effective care, and encouraging integrated care models called Accountable Care Organizations.
The specific steps states should take include:
* Adopting these transformative changes in state Medicaid programs;
* Pursuing the grant funding the federal law offers to support these programs;
* Directly implementing these reforms in state employee benefit programs.
New protections extended by the reform law will end many of the worst insurance industry abuses. But many of these protections will require a state role to ensure that they are enforced and deliver the maximum benefit to consumers:
* Young people up to age 26 will now be able to stay on their parents’ coverage. States should encourage insurers to extend this benefit immediately, so that graduating seniors do not lose their coverage, and should ensure that young people applying to rejoin family plans can do so without being discriminated against if they are sick.
* The practice of insurers’ retroactive cancellation of sick enrollees’ coverage will soon be ended. States should further require insurers to get regulatory approval before a patient is dropped.
* The law offers states grant funding to create or strengthen programs to review insurers’ premium increases. States should use these funds to make sure that their programs look at all aspects of an insurers’ business, including the steps they are taking to lower costs and improve quality. They should also make rate filings publically available.
* There is also funding to help states set up new temporary high-risk pools helping those with pre-existing conditions get coverage. States should make sure consumers are informed about these options, ensure the pools are not used as a dumping ground by insurers and employers, and finance them in an equitable fashion.
* Insurers will have to meet new standards for how much they devote to care, as against administrative costs. States should analyze these new standards to see how they mesh with their existing protections, potentially strengthening the federal rules if they would otherwise weaken current state law.
Beyond the Federal Reform
For all the strides taken by the new law, there are many important reforms it does not enact. States should take the opportunity to improve on the law by engaging with these unaddressed issues:
* Promoting greater administrative streamlining and reducing health care paperwork can lower costs for consumers, providers, and insurers.
* Limiting the worst marketing practices of the drug and medical device industries can deliver more affordable medical treatments.
* Encouraging research into the best treatments, and integrating this new knowledge into health IT systems, can reduce medical errors and help doctors.
* Ending the practice of billing consumers directly when hospitals are dissatisfied with the out-of-network reimbursements paid by insurers will protect patients.
* Empowering all payers to negotiate with hospitals en masse will take advantage of consumers’ bargaining power to lower costs.
A State-Level Public Option
The federal reform ultimately did not include a national public option, which would be a strong policy for giving consumers more choices and driving competition in the insurance market. States may wish to pursue this policy within their own borders, but should be aware of issues of size and competitiveness that could affect its viability. They should also make sure that the public option is transparent and accountable, that it works to adopt the latest quality-enhancing and cost-lowering innovations, and that private insurers cannot game the system to weaken it.
Keeping Insurers Honest
Of all the problems affecting California’s health care system, none is more immediate than the skyrocketing premiums consumers face year after year. Understandably, then, Anthem Blue Cross of California’s recent proposal to hike rates on its customers by up to 39 percent galvanized an angry public.
Anthem had to withdraw that proposal in disgrace when a special audit found that it was based on bad assumptions and mistaken math. But when California’s Department of Insurance commissioned a closer study of their rate proposal, they found that Anthem's proposal was riddled with errors and mistakes. They double-counted the effect of aging on demand for medical services. They overstated cost growth rates. And they made other errors, that, when added all together, meant that Anthem was calling for rate increases that were on average 10 percentage points higher than was actuarially justified.
But egregious as the Anthem example is, it is only the tip of the iceberg. The plain fact is, consumers got lucky. It took a perfect storm – a huge rate increase, media outlets primed to jump on health care stories, national attention primed by the fight over federal reform, an outraged public, and an insurer’s sloppy math – to trigger the additional scrutiny that found Anthem’s mistakes and reversed the hikes. And absent flat-out errors like the ones Anthem made, the Department of Insurance has little power to rein in the insurance companies.
Fortunately, our state has an opportunity to learn from this near-disaster and make sure it doesn't happen again. Legislation pending in Sacramento would protect consumers by empowering regulators to review premium increases before they went into effect. That means proposals based on bad math or that are otherwise unreasonable could be modified to a fairer level. The legislation would also open up these rate filings to public scrutiny, allowing consumers to know exactly where their money is going.
How Reviewing Rate Increases Can Help
A majority of states – at least 30 – have some form of this protection, called “rate review.” And their experience proves that giving regulators the power to reject proposed premium increases that cannot be justified on the facts helps police insurer behavior and lowers costs.
Oregon provides an especially important example. Oregon strengthened its existing rate review process in 2009 to prohibit excessive rate increases, taking aim at unreasonable administrative costs, opening insurers’ rate filings to public scrutiny, and empowering consumers to take part in the process. And these new measures have worked. The 25.3% rate hike recently requested by Regence Blue Cross Blue Shield was instead downgraded to a 16% rise, realizing significant savings for consumers. The new review process also appears to be encouraging insurers to adopt reforms to lower medical costs.
And looking at other states, it is clear that Oregon’s success is not an isolated incident:
* Colorado has seen nearly half of proposed increases lowered since it instituted rate review.
* Indiana and Maryland have both been able to negotiate lower premiums for consumers in half of all increases.
* Iowa regulators have reduced a third of filed proposals, saving consumers an average of 40% off of their premiums in these cases.
* In New Hampshire, an insurer proposed to flat-out double its rates, but rate review helped bring it down to a 12.5% increase.
* Vermont’s rate review system has allowed it to lower or deny 75% of proposed rate increases.
Taken together, the picture is clear – strong rate review systems have a proven track record of lowering costs for consumers.
Not only can rate review rein in unreasonable premium increases, it can also be used to help drive quality-increasing, cost-saving innovations through the health system. For example, Rhode Island law now looks beyond the customary criteria of fiscal soundness and consumer protection, to examine whether insurers are adequately compensating providers and encouraging accessibility, quality and affordability. The state has used this new leverage to put in place a series of standards that include increased payment for primary care providers, coordinated preventive care, and incentives for the adoption of health information technology.
Rate Review Done Right
However, not all rate review systems are created equal. There are certain key policies California should be sure to adopt, in order to ensure the maximum possible protection for consumers, and deliver the greatest possible reductions in health care costs.
* Set a Comprehensive Framework: All premium increases should be reviewed by regulators, and the same rules should apply to all plans.
* Providing Strong Negotiating Authority and Setting Robust Standards: Regulators should have broad authority to reject unreasonable proposals. If regulators can only reject a rate if it violates particular criteria – for example, if the insurer devotes an insufficient portion of premium income to medical care – this will only invite insurers to attempt to game the system. And regulators should set standards for administrative costs and adoption of cost-lowering policies to help decide whether a rate increase is justified.
* Require Transparency: Rate filing proposals should be comprehensive and open to the public, with exclusions for “trade secrets” determined by regulators and kept to a minimum, if not eliminated entirely.
* Creating a Role for Consumers: There should be opportunities for consumers to comment on the impact of rising rates and to trigger increased scrutiny of a particular plan. Consumers should also be allowed to submit comments on particular rate proposals, so that regulators have information on the likely effect of the premium increase.
This guide brought to you by CALPIRG & FamiliesUSA.