Most Americans with health insurance can relate to this scenario: you get the bill from the doctor’s office or the imaging center, you open it and wham!  How did that one procedure end up costing so much? And how come you have to pay that much of it?  Despite having insurance, many of us have policies that require co-pays or co-insurance.  Yet most of us don’t know the difference.

A co-pay is a fixed amount that you pay each time you see a doctor while co-insurance is the percentage of the cost of doctor visits, hospitalizations (and prescription drugs) that you must pay under your insurance policy.  So, if you give birth via c-section and the bill comes out to $10,000, and your co-insurance is 80/20, you’re going to be paying $2,000 yourself, typically referred to as “out of pocket.”

Co-insurance

Co-insurance is common; according to the Kaiser Family Foundation, over half of all Americans with coverage through their employer have co-insurance.  Older Americans and women are more likely to have the highest “out of pocket” costs for care.   They frequently have more trips to the doctor and need more medical care, resulting in more co-payments and co-insurance payments.

This fall, heading into open enrollment, consumers can take steps to limit their financial risk.  Some plans offer a limit on the amount the patient can pay out of pocket.  Several online sites provide calculators to help you understand the real costs of choosing a particular policy, when you consider all the factors.

Come 2014, the new health care reform law will set some limits on the total amount consumers will pay out of pocket, but until then, it is important to continue to read the fine print.

photo credit: Anil Mohabir

An illustration of how Health Care Reform will manage high-risk individuals who were denied coverage. The federal government has stepped in to increase the amount of funding for high-risk pools, but the type of coverage will vary by state.

The great news is that, come 2014, no one will be denied health insurance because of a preexisting condition.   The less-than-good-news, for people shopping for their own insurance who have diabetes, asthma, or even a pregnancy, is that 2014 is still more than three years away.

Under existing law in many states, insurance companies can turn down individuals for a wide variety of preexisting medical conditions.   Some will offer coverage with a preexisting condition exclusion or a waiting period; they won’t cover a medical expense associated with that condition for an extended period of time.

Why Insurance Companies Deny Coverage for Preexisting Conditions

Insurance companies have a very smart reason to take a hard look at preexisting conditions.   In a totally free market, people would have an incentive to buy insurance when they get sick to cover their bills, but not purchase it when they are healthy.  This works fine for the individual, but not for others covered by the same insurance, because the very concept of insurance relies on the company being able to spread risk among healthy (ier) and unhealthy patients.

Health Reform Offers Insurance for All – Regardless of Condition

In 2014, when the new health reform law goes into effect, denial of coverage will no longer be an issue, because the law requires everyone to have insurance.  “Everyone into the pool!”, including the young and healthy helps spread the risk, so that insurers can cover the 67-year-old diabetic without him bankrupting the system.

So what can individuals do from now until 2014 if they have a pre-existing condition and cannot get individual coverage?   Under health reform, many states have already begun to create or expand their ”high risk” pools – an option for people denied coverage.   In other parts of the country, individuals can enroll directly into the government’s new Preexisting Condition Insurance Plan, or they can request a quote for coverage here.

In many cases, coverage for those who are usually denied coverage is not cheap — not even close.  But it is coverage and a bridge to get us to 2014 when there will no longer be “pre-existing” conditions and insurance rates won’t vary based upon one’s health status.

Health insurance reform has helped making an "apples-to-apples" comparison between health plans much easier.

Anyone who has ever tried to buy health insurance as an individual knows it is just not as simple as purchasing other goods and services.  It is easy to compare a Delta flight to New York to a United flight to New York based on price, when both start and end at the same destination.  Both come with a seat, and these days — if you are lucky — probably a soft drink and maybe even some peanuts.

The trick in purchasing health coverage is that it is very difficult to make apples-to-apples comparisons between plans, especially just based on price.  The plan with a cheap monthly premium may actually have a much higher deductible—and end up being much more expensive in the long term.  Two plans may look very similar and be comparably priced; but one may cover maternity care, while the other does not. That can be tough, especially for the consumer who only learns this after she becomes pregnant.

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The Canjet C-FTCZ Boeing 737-800

Planning a vacation to another country this year? Great, do you think you can fit me inside your suitcase and smuggle me along with you? No? Going away on a vacation abroad is a fantastic way to escape the real world for a little while and to learn about other cultures and parts of the world.

Unfortunately, most health insurance carriers won’t cover you while you’re outside of United States soil, so anything that might happen to you while you’re traveling will not only be out of your own pocket, but you might find it harder to get seen for any kind of treatment. Things like travel insurance are essential, and there are other great tips you might find handy for your travels abroad. Consider this post your to-do list when getting ready for a vacation-print it out and hang it next to your suitcase as you pack. Bon voyage!

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Long Term Care Insurance helps cover the costs of care after retirement.

Want to live a long and healthy life? Don’t answer too quickly. According to a new study, the healthier you are, the longer you live. The longer you live, the higher your expected medical care costs. A large part of this equation is the cost of long term care. The majority of baby-boomers believe as they advance into old age, Medicare will cover their long term care needs, including a nursing home stay. It doesn’t, and the annual cost of a nursing home stay is nearly $80,000. (more…)

Health Reform was a big topic this year.  After all, President Barack Obama stood in front of congress more than once to encourage bipartisan support for the measures.  In the end, the country was deeply divided in their opinions about the bill’s veracity, but few can deny that Health Reform – as described in HR 3590 - will have far-reaching effects for millions of Americans (for better or worse).

This list of the 10 Most Costly Conditions was taken from our consumer guide to Health Reform in 2010.

Among the extensive coverage of health reform (Google shows an astounding 4,100,000 results for the phrase “health reform bill”) there is very little in the way of consumer guides.  MedHealthInsurance.com sought to remedy that shortfall by publishing a consumer guide to health reform in conjunction with the Insurance Research Organization.  We hope this guide will help you better understand your options under the new bill, its timeline, and how it will affect you – no matter which walk of life you hail from.